All Forum Posts by: Nashid Ali

@Bradford Behrins yea you're getting the right feedback. I'm seeing midmarket developers raise 6 figure funds. We did one in Baton Rouge. Bc it's Philly, so close to NYC, the appetite for OZ investors is likely closer to the institutional level, $3-5M+.

Have you considered reaching out to other developers or property owners and combining your portfolios to raise a larger fund? I've seen banks happy with 6% annual returns. Their main issue is deal size. So if you can provide the groundwork to create a large offering, you'll have something these larger funds and investors can sink their teeth into.

@John Underwood thanks for the reply and your logic is valid. I will clarify, though I still think your main concerns still hold, the window to invest into OZs is until 2028.

Here's a timeline

2026 - last year to invest in OZ fund

2028 - last year to deploy capital into an OZ project (develop property, business etc)

2047 - last year to recoup benefits

So yes the 10 year holding is where you get the big nut from the tax free profits on your OZ benefits. You have until 2047 to claim those benefits. And Lord forbid you pass any time before then, your kids will inherit those assets without an inclusion event so they would also have until 2047.

Still, I think you're right about the 1031 being a better fit and I definitely agree it's best not to force your money into a holding period you don't want for an OZ deal you otherwise would not do. <-- I see this happening a lot bc of the trend. You are wise to avoid the temptation unless it does make sense for your strategy.

@Bradford Behrins ok I get a lot of inbound in the OZ space. I've been pretty busy in Pittsburgh so I haven't had a chance to follow up on Philly leads.

you just want to connect with an OZ investor in Philly to learn more about the practical landscape? this could help us both. it's a shame I know more about Cleveland OZs than Philly.

I'll follow up with contacts and see what I can gather. lmk if you have any OZ questions, I am a lawyer. I would caution anyone saying they are a legal expert in OZs bc the law is still so new. we haven't even gone through a full regulatory cycle

@Brendan Phelan is there a date? more info

@Bradford Behrins @Ted S. did anything ever come of this? I'm in pgh

@Derek Cespedes did anything ever come of us this?

hey @Ryan Cooper did you end up doing any more digging into OZs? as much as I love OZs, I have to agree with @Jaysen Medhurst. You want to have both flexibility and experience in OZ investing. Specifically when it comes to compliance. Given that you're an engineer, I know you understand systems, mechanics, and coding. The OZ Tax Program is called a program for a reason. There's a lot of functions and loops that, imo, are somewhat exclusionary in their difficulty. The layperson will have a hard time navigating some of the compliance like the difference between the working capital safe harbor provisions and the typical 6 month window to deploy capital. 

I don't say this to discourage you at all, more so to encourage and give you a realistic outlook. Do what you're doing. Post, ask questions, find a team with experience to balance some of your ideas and opportunities. Do those 3 things and I think you'll at least start a foundation to develop your complex as an OZ project, or as a very sound real estate play. 

nice. congrats :) many more!

hey @John Underwood, enjoyed the post. can you elaborate more on your thinking re: not enough reason to change your investment strategy? 

I hear something like this often specifically in regards to changing the investment strategy to meet the OZ requirements. i've had a few investors and developers who like flips have concerns about the potential for inclusion events where they could be taxed on their original investment into an oz simply by using their flip strategy to buy and sell property within 3-4 months. so i'm wondering if you have similar concerns re: the conflict between OZ and current strategy. thanks. 

we closed our first deal in Baton Rouge a few weeks ago. it's at 95% capital deployed in an OZ, which is great for the 90% threshold. I think one issue in the OZ space is the ability to invest in and outside of the OZs themselves. I worry that too many practitioners will exploit the flexibility to the detriment of investors. so beware of that imo from the investment standpoint. 

otherwise, merry investing