You just sold some real estate for a big gain

Congrats! 🎉

But what if you could defer ALL taxes AND get a 360-day investment window?

It's not magic. It's combining the 1031 exchange with Opportunity Zone investing

Here's a strategy👇 Real estate investing 101: Grow your portfolio, minimize taxes.

Two powerful tools: 1031 exchanges and Opportunity Zone investing.

But the real power move? Using them together.

Let's break it down.

I've helped investors defer millions in capital gains taxes.

The secret? Opportunity Zone tax structure

But the window is closing: Dec 31, 2026 is the current deadline

Here's what you need to know👇 Opportunity Zones: the only way the IRS offers taxpayers a step-up in basis without dying

Let's break down why that matters and how you can leverage that for significant tax benefits and investment growth.

Real Estate Brokers, I'll let you in on a secret.

You're marketing Opportunity Zone listings wrong, and it's costing you time and money.

Here's how to fix it and close more deals ⏬ First mistake: Not flagging OZ eligibility on OZ eligible listings.

You're leaving money on the table and missing out on motivated buyers.

Tenant fraud costs us $10k+ per slip-up

When a follower raved last year about a new tech solution, I was skeptical

Turns out, it works

Should I keep it secret? That's not the ReTwit way.

I'm pulling back the curtain on the tool revolutionizing how we screen tenants. More 👇 Since COVID, fraud has become incredibly sophisticated and high-tech.

We're seeing entire composite identities.

ID packages for apartment apps are openly advertised on social media. It's led to a cottage industry of PropTech startups to combat it.

https://x.com/DallasAptGP/status/1820907268960821525

Until recently, I thought the only different types of Capital Gains were short term and long term

That is wrong. There is a lot more to it

Over the past few years, I have learned a lot about Capital Gains from CPA's and tax attorneys

Here is a primer in the thread below: Short-Term Capital Gains (STCG) are profits from selling assets held for one year or less.

They're taxed at your ordinary income rate, which can be high if you're in a higher tax bracket.

John D. Rockefeller mastered the art of trusts

Using them to grow his fortune significantly in a tax-protected manner.

You can use similar strategies to build and safeguard your own legacy.

Here's how⤵️ A "Captive QOF" is your personal Opportunity Zone fund.

You form, fund, and manage it yourself.

This approach offers unique advantages for both investors and fund managers.

Let's explore why:

Last week, I unveiled a mind-blowing tax loophole for eliminating passive capital gains

But if you're raking in profits from stocks, bonds, or crypto, I've got an even simpler strategy that's just as powerful

Prepare to take notes, because this is a game-changer First things first: portfolio income.

This is the money you make from selling stocks, bonds, or crypto. Short-term, long-term, doesn't matter.

If you've got gains, this thread is for you.

You had a capital gain & made an Opportunity Zone investment

How do you tell the IRS about all of this?

Intro to OZ Tax Reporting: Navigating Opportunity Zones (OZ) investing

Key IRS forms 8949 & 8997 are your tax reporting anchors. Let's dive in! IRS Form 8949 Explained

Form 8949 is where you report capital gains/losses & start your OZ journey. It's where the gain you'll defer will show up for years to come

Opportunity Zone investing is HIGHLY tax advantaged

I have spent several years working on real estate investments in this tax structure and I'm sharing the best pieces of the high level strategy right here

In this thread I have several years of experience as an OZ fund manager and developer

I also have my own personal OZ fund

Disclaimer: I am not a CPA or tax attorney. Always consult professionals before taking action.

Founders Square Apartments

1st deal we ever did in Bishop Ridge was long before 'Bishop Ridge' existed

Bought & sold the property before OZ legislation even existed. We were pioneers in this neighborhood in 2014

The story of 50%+ IRR and several million in profit is below The 61-unit property was a dump in 2014...every unit was "substandard"

37,550 rentable square feet, 59,800sf lot, and 1963 construction with a brick facade

The building had an outdated Chiller/Boiler HVAC system and a failing roof

To be a successful "value-add" real estate investor, the first step is buying at the right price

In order to do that, you need a mastery of 5th grade math and a willingness to work hard for 30 minutes

Here are the steps We need to figure out a few numbers which will lead us to a purchase price:

▪️Cost of the improvements needed
▪️Rents achievable after building is improved
▪️Expenses to operate the building after it is improved
▪️Desired Yield

Opportunity Zone Legislation sparked new investment in 3,800+ low income communities in 50 states

The communities averaged below 80th percentile for poverty, median household income, & unemployment

Investment came from 21,000+ individual and 4,000 corporate investors

More ⬇️ I know firsthand (as a real estate developer) about the impact the Opportunity Zone program can have on a neighborhood

We bought this OZ property vacant after all the copper was stolen and fire had occurred

We wouldn't have taken the risk but for OZ legislation

Closed the sale of our biggest deal in December 2021

Deep into 8 figures

Here is some dirt…there were a lot of twists and turns

Started with an HOA and ended without one. This is called a fractured condo deconversion

More below A friendly broker brought us the deal off market in 2017

We knew the strike price and we liked it…a lot

Offered the broker equity to keep it quiet and got it tied up quick

In 2015, I signed an LOI for a 116-unit apartment building on my trunk only 3 hours after it was listed on MLS

18 months later I sold it for life changing money

Here's how I bought it and made it work: I am always on the hunt for the next deal

One of the ways I search is on MLS

I always dream that a residential broker will misprice a big apartment deal

Over $100,000,000,000 of Equity has gone into Opportunity Zone Funds since 2018

Renovating and Developing new Real Estate worth $250B+ in over 4,000 low income census tracts nationwide

Here's a 🧵 on the history and intent of the program Opportunity Zones were conceived in the midst of a deeply uneven recovery that followed the Great Recession

Designed to help meet the needs of communities traditionally deprived of investment dollars

Dave Hoskins threw a heckuva breaking ball

His fastball and curve were also pretty good and he could hit

We remember his story in my family and I thought I would share it

Dave Hoskins was the first African American to play in the Texas League's modern era Dave Hoskins began his professional career in 1942 with the Ethiopian Clowns

In 1944, 3 black players got a tryout with Boston’s 2 clubs, the Red Sox and Braves. Hoskins was one of the players

The other two were Jackie Robinson and Sam Jethroe

I think the classic RE cycle chart is useful for context

But imperfect when you think about strategy for raising & deploying funds

More in thread 🧵 Efficient markets are for textbooks and business school classrooms

Even the S&P 500 (logarithmic) year chart shows STEEP drops and sharp recoveries

Want to be an OZ investor?

Think through 2022 investments

Maybe you are expecting a K-1 showing a capital gain from February 2022 (when the market was white hot)

Instead of paying tax April 15, you can put the money into an OZ fund and defer the tax to April 2027 In addition to the 4 year deferral on the taxes owed now

You'll get mindblowing tax treatment on the new OZ investment

Assuming that you hold it for 10+ years, you'll get to step up the value to market when you sell. No depreciation recapture & no capital gains

Big challenges with Real Estate investment today

▪️Skinny Deals
▪️Taxes on sale profits
▪️Depreciation Recapture

Opportunity Zone investing (& good GPing) solves this & a fund structure can amplify all the benefits

January 1 is a great time to consider this strategy

Thread 👇 Opportunity Zone investing is VERY tax advantaged. It has been called a tax shelter...

I've seen some people have 💡💡moments about this but not enough people “get it” yet

The 10-year basis step up combined with cost seg and bonus depreciation is wild

My daughter told me the other day that I should take less showers to save the planet

I taught her how I fix toilets flaps and busted shower manifolds instead

I love saving water in apartment buildings

Let's translate water savings into dollars in the thread ⬇️ During DD we ask for a year of utility bills

We've seen deals that have average annual usage over 500 gallons/unit/day

After implementing water savings we can lower usage to 160 gallons/unit/day depending on the unit mix, square footage, and age of building

In 2012 it famously came out, Warren Buffett was paying 17.4% in taxes while his secretary was paying 35.8%

Tons of the disparity has to do with Capital Gains and managing tax liabilities

5️⃣ tips on managing Capital Gains taxes

// THREAD // 1️⃣ Start with the easiest

You don't have to do anything

One day you'll die

Your heirs will inherit a "stepped-up" basis in your assets equal to the fair market value of the property on the day of your death

The estate tax is a high class problem for a different thread