All Forum Posts by: Matthew Ryan

@Michael Wolffs - We've set up a single asset fund and are in the process of a multi-asset fund. Unfortunately we didn't close on the deal for the single asset. Generally speaking, it's expensive. You double your legal costs because you now have two entities. So that costs has to be carried somewhere (most likely investors). OZ Capital is fickle if you haven't tried to recruit it already so you really need to be "in it", IMO, for the long haul. Finding the OZ related projects is another story. So it's certainly a steep pivot if you've just been syndicating MF value-add. If you're a core developer not a much but you may, again, have issues finding the patient capital that wants to be in a deal for ten years. 

@Natalie Hahn - 

Looking for someone that is great for high quality remodeling but won't break the bank. - I hate to be the bearer of bad news but you can't have one and expect the other. 

With regard to the Oakland hills reno - Do you have foundation issues and that's the reason for mentioning the steep decline? I might be able to refer you to an integrated architect/GC but would need to know more about the project first. As far as reno costs, it really varies from anywhere from $185/foot up to $275 per foot. Depending mostly on needed foundation work,complexity of layout, desired finishes and whether it requires planning approval. 

@Lauren B. - Got it. Well in any case that you find yourself putting a substantial amount (100% of the assigned value of the building) into the project then you may want to look into recruiting capital for OZ's but otherwise, best of luck to you. 

@Andrew Gorgey - As always, like to pop in and let you know Opportunity Zones are also a great alternative to 1031 exchanges with some more favorable terms. Both have advantages/disadvantages to them but all in all, both good options. Especially if you find yourself attempting a 1031 exchange and not hitting your 45 day window. 

@Neel Jain - We barely have an inventory problem. Still one of the lowest ranking cities for supply delivery. NYC and Denver, last I saw, were #1 and #2. 

@Lauren B. - You can cycle assets in a true "Fund" structure so long as you do it in a 12 month period. Sounds like you're at the point that you need an attorneys help. You can only go so far in this realm until you truly need a qualified legal professional, with experience setting up an OZ Fund, to help you. I can tell you if you don't have a lot of experience in development then it's mostly likely not going to be a profitable pursuit; especially if you're looking to raise outside money. Investors are especially leery of new fund managers popping up trying to tak advantage of the provision. 

@Robert Collins - Other big pro I forgot but answered yesterday on another forum post is if your part of a partnership, normally all partners would need to complete an exchange since they are all part of the LLP or LLC. In OZ's each individual partner has te option of taking his/her capital gain and re-investing it into a qualified opportunity fund. The only downside of this is the 180 days reinvestment period begins at the end of the tax year for the partnership, not from the date of the recognized gain.

@Jacob Morris - Having spent the last three (almost four years) building a syndication business I can tell you that if I didn't have an extremely strong desire to build a business I would have taken the profits from my original big hit on my first investment and started investing passively 100% of the time. The experience and knowledge you'll accrue are 10x what you'll get by learning on your own because you'll watch how the PROs do it. 

As my father would tell me, "A good copy is better than a poor design". 

If you have the $$$ to spread across 3-4 deals, IMO, do it first. Then decide if doing it on your own is best suited for you. 

@Josh Chappell -  If you do have a cap gain and you're the only one who wants to re-invest out of your partners, Opportunity Zones allow you to do so on an individual basis. You would have to wait until the end of this tax year and would have 180 days from the end of the calendar year or fiscal year end of the business to re-invest. Would want to consult with a CPA before doing so. 

@Robert Collins 

Pros - 

(1) You have longer to re-invest in an exchange or replacement property than 1031 (180 days where-as 1031 you must identify 3 in 45 and close within 180 days on one of the three). @Dave Foster - can correct me if I'm wrong on this one. 

(2) If held for ten years, you pay zero capital gains on any and all equity growth of the investment

(3) You defer your original cap gain until 2026 and can reduce it by 15% if you invest in this tax year. 

Cons - 

(1) You must substantially improve the property. Meaning you buy for $100k and assign $70k to the building, $30k to the land, you must improve the building by $70k. 

(2) You must comply with the OZ Fund regulation which typically requires assistant from a securities attorney and CPA with strong knowledge of OZ's.

(3) If you're recruiting capital to come into your deals, it can be difficult getting someone to invest for a ten year hold. 

I think that's a wrap for now. Hope this helps.