@Lance Lvovsky Thanks, great clarification! As The Dude would say - “there’s a lot of layers “. However, as the name suggests, I believe for the right individual/s this could be a tremendous vehicle. I’m interested in self certifying my own QOF but have a few questions that I can’t seem to find answers to here on the BP forums:
1. Can I market my QOF to investors and develop a “pool” of money to purchase say a mixed use property in an OZ?
2. Assuming I can do this, let’s for the sake argument say I pool $50,000 from 20 investors and purchase a $500K and perform $500k in renovations. Let’s assume a long-term hold plan of 10 years in order to take advantage of the tax and appreciation benefits, and let’s also assume that the property once reno’d and stabilized provides $100k annual cash flow. How is this income treated? Must it be disbursed to the investors as dividends? And if so, how is it taxed? Can it be used to purchase additional properties? And if so, If future purchases off real estate are within OZ’s, do they also qualify for the tax benefits?
3. Must the original property be retained for the full 10 years? Is there potential to sell the property, 1031 exchange it within the fund to an additional property and continue to realize the text benefits associated?
I’d love to hear from some fellow BP’ers who either have a lot of knowledge on this type of investment vehicle or are interested in learning more. Reach out privately if you’d like to discuss further.
