Tenants in unit 110 reported hearing noises at night coming from the vacant unit above. We had previously learned that a child died in that building a few years before we bought the property.
The unit was clean and rent ready. We had our manager check to make sure the door was locked before she left for the night…but then every few nights the tenants below would hear noises
Our maintenance guy lived on site and got a call next time the noise came.
He went into the upstairs unit (in the dark) and didn’t see anything except a white flash and what sounded like footsteps. He took a grainy photo of the white blurry flash
Now the rumors are spreading around the property. Even the maintenance guy is scared of the ghost. People are thinking about moving out!!
We needed to do something. We had to catch the ghost or our income was going to be in the tank.
The maintenance guy was too scared to go back into the unit. Our manager acted tough but she didn’t want to go in either. The assistant manager was burning candles and saying prayers.
So my partner went in to execute the plan.
He covered every square inch of the floor with baby powder. If it was a ghost then there wouldn’t be any footprints (because ghosts don’t have feet, right?).
A few nights later the tenants heard the noise and our "trap" was put to the test
My partner carefully opened the door so he wouldn’t disturb the powder. I wish I could find the actual photo but there were tiny animal footprints everywhere.
We later posted announcements all over the place that the RACCOON had been caught and that there was no ghost!!
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What types of Real Estate projects can qualify as Opportunity Zone deals?
There are a lot of rules. I’ll give a high level overview…please check all of this with a CPA and/or tax attorney before doing a deal (I am neither)
Thread below.
TLDR:
•Real property
•Located in OZ
•Purchased after 12/31/17 thru QOF or QOZB
•From unrelated party
•Original use must begin with fund or fund must substantially improve within any 30-month period (addition to basis must exceed initial adj basis)
The property needs to be located in an Opportunity Zone. There are more than 8,500 in the US. They are based on Low Income census tracts from the 2010 census data and designated by governors in 2017 novoco.com/resource-cente…
Here is an OZ strategy that I have been brainstorming which I think displays the power of the program.
This is advanced stuff but do it right and there may be a LOT of tax avoided.
I am not a CPA or Tax Attorney. Do your own research!!
Step 1: Start an OZ Fund
This can sound daunting but an OZ fund is an LLC with special language in the operating agreement and IRS guidelines that CPA and tax attorney can help to navigate
Step 2: Get money into your OZ Fund
The 1st IRS guideline is that “eligible gains” need to be the initial capital for the OZ Fund. In a unique quirk…this can be a tiny amount of money ($10?). The rest could come from “non-eligible” funds and be papered as a loan to the OZ fund
The correct terminology is “Captive QOF”. A captive QOF is one that is formed, funded, and managed by the investor.
Thread below on why I think investors should take advantage and GP’s should be setup to take money from QOF’s
1/14
A QOF has compliance requirements to keep tax benefits. Failing to satisfy these requirements at any point could result in penalties ranging from nominal interest charge at the low end to a complete loss of the exclusion from tax on the gain resulting from the sale.
2/14
Being in control of your own captive QOF reduces compliance risk and puts you in control. Invest in OZ real estate directly or into QOZB’s from 3rd party sponsors.
Main rules: make sure the money is placed into OZ assets within 180 days and that 90%+ remains there.
3/14
There is misinformation out there and some of the headlines can be misleading. OZ incentive is a totally different program than 1031. You cannot 1031 into OZ!!
More below ⬇️
The Opportunity Zone program offers investors that pay US taxes (individuals, partnerships, corporations, foreign investors) certain tax benefits for rolling over their realized capital gains into a Qualified Opportunity Fund (QOF)
A QOF is an investment vehicle that files either a partnership or corporate federal income tax return and is organized for the purpose of investing in QOZ property.
Most commonly these are LLC's and can have 1 member or hundreds