5 Ways to Make the Most of ‘Opportunity Zones’

5 Ways to Make the Most of ‘Opportunity Zones’


You may be hearing a lot about
Opportunity Zones, also known
as QOZs. And you probably also
assume that Opportunity Zones is for commercial real estate
professionals. And that you need
to be well-informed about
Opportunity Zones. That’s simply not true. I’m Sam Harris, broker,
Opportunity Zone and fund
advisor with Samjen Residential
and Commercial Realty in Tampa. Let’s take five minutes to
understand Opportunity Zones
and how they can impact
your business AND help your
customers. Opportunity Zones were created
as part of the Tax Cuts and Jobs
Act of 2017. The plan enables
investors with private capital
gains invest in low income communities
and rural areas, to help redevelop
these communities and, in the
process, receive a tax advantage. Because of the tax benefits,
more private capital is reaching
Main Street, just as venture
capital made its way to Wall
Street, and these investments
are jolting new life into
communities that were
once overlooked by most
investors and developers. Also, the legislation is
fostering businesses,
economic growth, jobs,
and an influx of new
residents to these areas. There are 8,764
Opportunity Zones
throughout the U.S., there are
Opportunity Zones in every
county and state, with 462
of them in Florida. Look around the state,
and you will see projects
under development everywhere,
especially in Tampa, as it was recently
recognized as one of the
top cities for Opportunity
Zone development. Some of the most notable
Opportunity Zone projects
in Florida is the UnionWest
at Creative Village in Orlando, a huge complex being
developed by the University
of Central Florida. It includes
a 15-story mixed-use building with 644 student
housing beds, 100,000
square feet of academic
space, 11,000 square feet of ground-level retail space
and a 600-space parking
garage. So, I know you’re asking,
“where are the opportunities
for residential real estate
agents?” Opportunity Zones offer
affordable inventory in
revitalized areas that are once
again desirable. In
Opportunity Zones, there is a mix of price
ranges within the same
area. You can work with
customers with multiple
income-levels and those who may not meet
specific guidelines for
financing. Many buyers may
not understand the incentives
involved in either becoming a new
homeowner or moving their
business to the area. Plus,
as homeowners in Opportunity Zones choose
to sell, we may see a price
appreciation of 15 to 20
percent. This gives sellers in these areas more
opportunity to invest in a
new home. Opportunity Zones are an
emerging niche. Here are
ways you can learn more
about them and decide if
they’re the right specialty for you: No. 1: Build a relationship
with the Community
Redevelopment Agency in
your area. This is vital,
because it will give you insight into what new
developments are in the
planning phase. No. 2: Attend community
meetings so you can network
with those that have
properties for sale or may
be looking to develop. And, local city government
and municipalities can partner
with real estate professionals
to find developers or clients who want to buy or develop
that property. No, 3: Relocate your real
estate office to an Opportunity
Zone. This would allow you to
reduce your taxes and provide
additional tax breaks as
an entrepreneur. No, 4: Invest in Opportunity
Zone communities. You will get
a 15 percent reduction if you
keep your money in the Opportunity Fund for seven
years. Keep it in the fund for
an additional three years
(for a total of 10 years), and the capital gains you
earn from your initial
investment will be 100%
tax-free. You can either
continue to keep it in the fund until
2046, cash out or invest
their capital gain into other
property investments. So, it’s similar to a 1031
exchange, except you don’t
have to transfer your profits
into another property. No. 5: Check out the
interactive Opportunity map
on Realtors Property Resource,
or RPR. This tool will allow you
to identify the Opportunity Zones in
your area. Check with your
ocal association about webinars
or courses that are offered in your area or visit our
website to request information
about our training series
called the Business and Industry of Qualified
Opportunity Zones. And No. 6: Get to know
the specialized attorneys
and CPAs in your area. You
want to work with an attorney
and CPA who understand Opportunity
Zones and the laws
associated with them. Also, go
to your local city website and search for “Opportunity
Zones” to find the entire
prospectus on your area’s
Opportunity Zones, projects
that the city would like to see developed,
and how you can engage in
your community to help move
the plans and conversation
forward. Qualified Opportunity Zones
are a boon to the economy,
local development, and real
estate industry. As a residential real estate
practitioner, you’ll quickly
notice that homes in Qualified
Opportunity Zones gain a
marketability boost because of increased
attention. If you’re a commercial
Realtor, you’ll likely see properties
once overlooked that are now excellent
investment properties. These
properties can bring new life,
taxpayers, and residents to communities with the hope
of growing businesses, creating
jobs, raising a family, and investing in
disadvantaged communities.

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