All Forum Posts by: Matthew Ryan

@Mark Elliott Great synopsis. @Kathryn Dunnivant - Hate to say this but this is a topic that would require a knowledgeable legal professional who as actually set-up an OZ fund for someone doing smaller investments such as yours. Most of the ones I've interviewed are assisting larger fund managers (may be out of the $ range) but I would look for them at a conference as well as Indy or Chicago.  

@Adam Rapoport -. We're setting up a "fund" (though a misnomer) now and we've been tracking the legislation for going on two years. That said, I'm still finding out things that I "thought" I knew every time I speak to a legal professional or speak to a colleague. It's a thick topic so the best thing to know is WHY are you interested in them? In the meantime, check out www.eig.org and the US Treasury website for more information. Finding a CPA or Legal prof. who has actually formed a QOF (Qualified Opportunity Fund) is the key but understand, their advice won't be cheap. 

@Natalie Hahn - Great question. I would say look at what you had to put down on the property (initial equity) and then divide your Net Operating Income (income - expenses) by that initial equity down payment. This would give you a return on equity which would help you analyze other deals. If this is a personal residence as @Alison H. asks, then you wouldn't have capital gains on a portion of the profit (can't remember the cap for this). As far as 7 cap deals out there, they are absolutely out there. But cap rate is just one metric and is often overemphasized. I would consider what your income goals are, what type of asset you want to re-invest in and depending on the amount of profit you have, whether you want to actively invest in the future or passively invest (with other sophisticated investors). You can do both. Which would get your more familiar with the process and see how those of us who have to make a living out of this, operate. Additionally, 1031's are great and I've completed on myself. I'd also consider Opportunity Zone investments if the profit you have is in fact from an investment (and not your personal investment). Either way, congratulations on your success and let us know how we can help further. You're on the right track (and in the right place).

@Gaurav Mehta Since you're in California, use this map:

https://cafinance.maps.arcgis.com/apps/webappviewe...

@Brandon Sturgill - Agreed. This idea of community revitalization is a big animal (also part of re-viv's broader investment thesis). The disaggregation of engaged members (people interested in community improvement), public policy makers at the local, state and federal level and the perceptions from the tenants and homeowners (both interested in improvement but scrupulous of speculation) makes this process difficult. We're also not just talking about mobilizing housing; it's education, crime, and safety, infrastructure, urban planning, etc. But it's my thought process that if we don't learn how to effectively do this without massive displacement, we're going to kick the proverbial can down the road as it relates to equitable housing solutions and burdensome infrastructure needs. Energy is Invisible, and the Great Inversion are two books that speak to this problem. I could also bore you more if you have a further interest outside the forum! It sounds like you have some interesting takes on the subject; I'd love to hear some of yours. 

@Brandon Sturgill - Waaaaayyy to early to tell. Local and state gov't's just designated OZ's back in April of last year and the final regulations, which mostly clarify rules for fund managers, aren't out yet or have just come out. I'm a big proponent as we were using the Economic innovations groups distressed community index (predecessor to OZ maps) to identify up and coming markets in or around urban cores. I think Surban (John Burns term) and urban OZ markets will have an impact but some of the more rural areas are suspect and will most likely not see additional investment. That also follows John Burn's theory on household formations. 

@Michael Roy - We are in the East Bay market. You can DM to find out more details.

@Kyle Longacre We have an Opportunity Zones investment int he East Bay market that stabilizes close to your investor's target cap rate. DM for more details. I also invest up in Sac and can tell you it will be hard to find an 8 Cap deal there; even buying Class C. Most of the inventory has been picked over and the deals that are getting gobbled up will not fit your investor's criteria unless he were to move into a different asset type. 

@Frank D. - Some qualifying questions (you can DM if you prefer to):

(1) Are you interested in cash flow, equity growth or both?

(2) Have you ever invested passively with a private placement before? Is this something you've looked into?

(3) Why are you interested in the markets you listed? What about those markets metrics do you like?

(4) Are you only looking for Multi-family? Have you considered other sectors? 

(5) What are your income goals at the moment?

You've clearly done well. Without answers to some of your questions above, I would say find a way to distribute the $$$ across the board. Some % investing passively with a syndicator or fund manager in an investment class you have an interest or would like to learn more about. Take a % to invest actively on your own where you can control your own destiny. Lastly, keep anywhere from 10-50% for dry powder. I've often thought the same thing you have; the market is due for a correction and I should wait for the next big draw down; I thought that 3 years ago. Imagine the amount of $$$ left on the table during that period. You should certainly be scrupulous about where you put your money and keep some capital lined up but don't wait for the next big hit. There's too much opportunity cost associated with this strategy IMO. 

 @NA Wilkerson - Great alternative to a 1031 would be to invest in a qualified opportunity zone fund or one-off investment. If you're looking to invest in Reno I know there are large portions of Reno that are designated OZ's. Contrary to 1031 exchange you'll have 180 days from the date of the closing to invest in a fund or one-off investment. Depending on whether you're looking to invest passively or to work alone will guide the additional steps needed to qualify for the very substantial tax break. A key factor in all of this is if you keep your capital gain in your investment for ten years, you pay zero capital gain at the sale. No 1031 needed. You can DM if you would like more details. I've also included a map of Opportunity Zones in NV for your reference:

http://www.diversifynevada.com/programs/opportunity-zones/