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How Investors Can Ensure Their Opportunity Zone Investment Is A Smart Deal

January 8, 2019

How Investors Can Ensure Their Opportunity Zone Investment Is A Smart Deal

January 3, 2019 | Ellie Perlman | Forbes

While the term “Opportunity Zones” may sound familiar now, it’s a relatively new term, and plenty of investors still know little about what they are and how to use them to their benefit. Whether you're considering your first property investment or your thousandth, it's smart to understand what they are, and whether this is the right program for you.

Opportunity Zones were created as a result of the 2017 Tax Cuts and Jobs Act, and are now in all 50 states as well as Puerto Rico, American Samoa, the Northern Mariana Islands, the Virgin Islands and Guam. By definition, they are distressed areas that now enjoy a federal tax incentive designed to promote long-term investment in those areas that require help rebuilding. Tenants have moved out; buildings and areas are in disrepair. These blighted areas are generally not attractive to commercial institutional investors.

On the other hand, Opportunity Zone investments are attractive to nontraditional investors like high-net-worth individuals, family offices and endowments and others. The core of the program is to encourage investors to reinvest capital gains, which can come from any investment — including stocks, bonds, real estate and partnership interests — into these zones.

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The time (at Blue Vault's 2nd Annual Broker Dealer Educational Summit) proved extremely informative.

Derek Hayes Analyst, Cambridge Investment Research Broker Dealer Educational Summit 2016 May 30, 2016