Operating Business Opportunity Zone Fund Strategies, with Ashley Tison

Ashley Tison

The second tranche of regulations that were published two months ago clarified many questions regarding opportunity zone businesses. What are some strategies for operating business investment that OZ funds should consider?

M&A attorney Ashley Tison is founder and CEO of the Charlotte, NC-based Ōz group of companies (pronounced OHz). Ōz is an opportunity zone consulting group and manager of a qualified opportunity fund that invests in operating business.

Click the play button below to listen to my conversation with Ashley.

Episode Highlights

  • Why Ōz is setting up their fund’s underlying qualified opportunity zone business (QOZB) as a C corp.
  • Target raise, minimum investment, and expected returns for the Ōz Investment Fund.
  • The ways in which Ōz is making their QOF as accessible as possible.
  • The steps that Ōz is taking to measure and maximize impact.
  • How Ōz is planning to leverage Section 1202 of the Internal Revenue Code to provide additional flexibility to their investors at exit.
  • The types of clients that Ōz Consultants serves, from investors to developers to municipalities.
  • What Opportunity Zones participants can do themselves within their communities.
  • The Ōz sell-in fund model to provide a succession plan, growth plan, recapitalization plan, and social impact plan for QOZBs.

Featured on This Episode

Industry Spotlight: Ōz Consultants

Ōz Consultants

Charlotte, NC-based Ōz Consultants assists accountants, business owners, and investors in sourcing and certifying opportunity zone transactions. In addition, they are preparing to launch their own set of Ōz Investment Funds later this year.

Learn more about Ōz Consultants

About the Opportunity Zones Podcast

Hosted by OpportunityDb.com founder Jimmy Atkinson, the Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in opportunity zones.

Show Transcript

Jimmy: Welcome to the “Opportunity Zones Podcast.” I am your host, Jimmy Atkinson, and today I’m joined by Ashley Tison, founder, and CEO of the OZ Group of companies which includes the OZ Investment Fund and OZ Consultant. Ashley and I met at the Opportunity Zone Expo in Las Vegas just a few weeks ago. And today he joins us from his office in Charlotte, North Carolina. Ashley, welcome to the show.

Ashley: Thanks, Jimmy. Thanks for having me today.

Jimmy: Absolutely. Pleased to be with you. And pleased to learn more about you and what you’re doing over there. So to start us off, let’s just dive right in here. Tell me about your Opportunity Zone fund, the OZ fund. And I understand it invests in operating business, but tell me what differentiates it from most other Opportunity Zone funds available today? And maybe you can tell me why I’m pronouncing it O’s instead of OZ or O-Z?

Ashley: Well, it’s kind of an interesting conversation and an interesting backstory. So when I first found out about Opportunity Zones back in, it was actually almost a little over a year ago, was at the beginning part of May of 2018. I started doing my research and got really excited about the program. And so like, you know, all good entrepreneurs do, jumped into my GoDaddy account and started taking down domain names and was trying to figure out different abbreviations on Opportunity Zone and stumbled on OZ and so took down OZ Investment Fund and some other OZ stuff, including our website now, which is www.ozrollover.com.

And I called my buddy that does trademarks and I said, “Hey, listen, I want to, you know, get this stuff trademarked.” And so he filed the application and it came back and it was not trademarkable as we filed it. And so, a little bit later on, I was having a conversation with somebody and he was talking about a word and I was telling him about Opportunity Zones and OZ. And he’s like, “Well,” he said, “It sounds what people are looking for, in what you’re describing is that they’re looking for true power. And you know what the word for true power in Greek is, right?” And I said, “No.”

And he said, “It’s Ōz.” And I was like, “Yes.” So that became how we got the bar over the O. So I slapped the bar on it, sent it back to the trademark attorney and, you know, lo and behold, we’re in business. So that’s how OZ was birthed. And, you know, I think from the outset, what we’ve tried to do is to come up with creative processes and kind of just set ourselves apart and to set ourselves apart in the concept of not only doing good but also of really knowing our stuff and coming up with creative solutions that we can incorporate into the Opportunity Zone program, but they can deliver a great benefit for our investors and for our clients.

And so that’s what led to the first fund, which is an operating business fund that is set up as a C Corp. And I think that’s probably the most unique piece of it that our qualified Opportunity Zone business is going to function as a C Corporation. The fund itself will be a pass-through entity, but the QOZB will actually be a C Corp. So we can not only take advantage of the multiple arbitrages as we’re funding this company that we’ve identified, which is a great operating partner and who’s, you know, been very successful in their chosen industry.

It’s a company that’s actually outside of Charlotte called Synergy and they are in the construction cladding business and have done a great job of really make an impact in their communities with the investments that they’ve made in previous companies as well. And they have an opportunity to consolidate their industry. They’ve got four potential acquisition targets.

And so we are funding them, we’re actually buying them. And I’m engaging their management team to assist us in going out and acquiring, you know, four of their competitors, to roll them up into kind of one bigger business, which will not only be able to kind of glean the benefit of that multiple arbitrage of buying at a three and selling at a six, but will also be able to do that tax free.

And kind of the benefit and the reason why we went the C Corp route is that instead of taking proceeds and returning it to investors that they’re going to pay taxes on usually in that 39% range, we’re able to pay a 21% C Corp tax, and then reinvest the difference into buying more businesses and to growing…into making a difference in areas that we’re in and in building that asset that we’re ultimately going to exit on the backend of our fund, you know, in 10 to 14 years, either by selling to another private equity group or a strategic partner, or we’ve also looked at the possibility of, you know, doing a public offering ourselves to where we’re able to then turn the benefits of that and the growth of that investment back to our investors’ tax, you know, with no capital gains tax.

Jimmy: Right. You mentioned Synergy and the construction business, which other types of businesses are you targeting in this operating business OZ Fund or Ōz Fund, excuse me?

Ashley: So the first one that we’re doing in the first fund is specifically geared to Synergy and to growing that business specifically. And I think we’ve got, you know, we’ve got the ability and, you know, this kind of goes back to how most people were deploying funds and how your…how we had to approach them at the outset kind of pending, you know, the regs that came out, is that we needed to be able to identify how we were gonna put the money to work.

And I think that that’s an important thing for investors to look at is that their fund manager actually doesn’t just have a plan to say, “Oh, we’re gonna generally buy this in the Opportunity Zones, and we’re gonna find great deals.” But they’ve actually got the ability to put the money to work and put the money to work, you know, as quickly as possible. And so in this fund, we specifically are going to buy Synergy and we’re going to buy maybe four to five of their competitors that we’ve already identified and we’re in negotiations with right now, you know, that we can put investors’ money to work, you know, fairly quickly.

Jimmy: Good. So talk numbers with me for a minute now, Ashley. What’s your target raise for your Opportunity Zone Fund? And how much have you raised so far? What’s the minimum investment if I’m interested in investing with you and what types of returns are you expecting?

Ashley: So it’s a $25 million fund and we are literally just going to market with it. So we actually have not raised any money yet because we’re literally just turning it on to investors. Maybe by the time this thing airs, we will have turned it on to investors. And I’m pretty confident that we will have money in the door. We’ve got from just kind of the general conversations that we’ve had, we’ve got a number of interested parties who are really excited about what we’re doing, and are really excited about being able to put their capital gains dollars to work in this space, this private equity space.

And I think that one of the reasons why they are is namely that they’re really excited about Rick. Rick Sabbath is the guy that that is running Synergy right now and his approach to private equity and how he’s run his companies. But then number two is that they’re excited about it private equity type returns. So we’re literally just under 20% on an IRR basis with 19.69, with a 5.57x projected profit multiplier. So I think we’ve got a really attractive return for investors and a great plan with great folks that are backing up that plan and executing on that plan.

Jimmy: Good. So yeah, we’re recording this episode on June 3, and I expect it’ll probably air around the middle of this month, mid-June. You may or may not have gone to market with this fund by then or you’ll be very close to it. What will be the minimum investment if I’m an investor if I’m interested in investing in the fund?

Ashley: So our minimum investment is $25,000. We try to keep it as low as possible so we could open it up to as a wide array of individuals as possible. I think that most people that are looking at Opportunity Zone deals are usually looking to invest probably 100,000 to 250,000. You know, and we’ve gotten some inquiries from folks who have a lot more than that as well. But it’s a $25,000 minimum, and, you know, a lot of people kind of are, they’re like, “Wow, that’s low, how are you going to handle all those investors?”

And we’ve got a great partnership with the guys at NES Capital who’s functioning as our custodian on this to really beef up that third party compliance and to get investors comfortable about how we’re doing it, and that we have a portal and an investor portal. So we’re able to accommodate kind of the smaller ticket item and be able to roll this out. We wanted to make it as accessible as possible to people.

Jimmy: That’s NES Financial, right?

Ashley: Correct. That’s NES Financial. And, you know, I can’t say enough great things. They’ve been excellent to work with, and, you know, we’re excited about… You know, one of the things that we’re working on with them, too, is, you know, this part of what we’re trying to do at Ōz and what we were really, really excited about within the Opportunity Zone program.

Even before, you know, kind of this buzz started happening in the industry about, you know, measuring impact and measuring other types of things, not just the…you know, how much money you’re going to make, is that we’ve been focused on impact investing, you know, since I set up my Soterian company back in 2005. And so at Ōz, we’ve really made a point of investing time, energy and resources into really making sure that we’re having as much impact as possible, but also that we’re measuring that impact, and that we’re really actively working with the local municipalities in order to maximize that impact.

And then to be able to actually quantify it and put it into our investors portals, you know, in conjunction with NES, so that it’s trackable, and so that it will be a seamless rollout to them, as the reporting requirements come down from HUD and Treasury that have kind of been alluded to, it’s not going to be a problem for us, we’ll just, you know, add an extra column in there about what we want to…you know, what we need to report, and we’ll be able to get that information out.

More than likely we’ll already be reporting on that to folks anyhow, we actually, we’ve got a Harvard Ph.D. in economics on staff, who is helping us to create our impact procedures and our impact resources about how we’re, you know, number one, how we’re evaluating where we’re going to be locating. Number two, working with the municipalities in order to maximize the different grants and job training, workforce development, and local economic development opportunities there are, but then specifically about how we can work together side by side, with municipalities and with other, you know, nonprofit organizations, and folks, to really make a difference in these communities.

And then not just have lip service, that, “Hey, we’re gonna throw a bunch of money at it.” But that we’re actually on the ground, getting things done. And that’s certainly one of the things that we are doing inside of Ōz. You know, we’ve got a commitment that, you know, that we reinvest and that we put 10% of what we make back into the community via giving strategy. So, you know, I like to challenge people to put their money where their mouth is, and we certainly do that on our end as well.

Jimmy: Well, that’s great, I applaud you for that. I applaud you for the effort you’re taking to do some self-reporting before it’s even mandated by Treasury, whether or not it will be mandated by Treasury, or how will we been mandated by Treasury, it’s good to see that some funds and funds like yours, in particular, are kind of stepping up to the plate and making sure that we know to what extent the program is doing, and what the funds are doing within the program, what types of numbers we’re talking about, which census tracts are being affected, and other numbers that will help us measure the success of the program.

Ashley: You know, I think it’s going to be important to be able to do that so that, you know, that this doesn’t get, you know, built as, you know, a further advantage for the rich. You know, the whole point of why they put this into place was to have impact in these areas. And we want to make sure that we’re doing that. And, you know, God bless them for how they were able to structure, what they were able to on a very short timeline, I really applaud them because it’s really made the…number one, it’s gotten the attention of the investment community.

But then number two, you know, they’ve really actually done a great job of, you know, getting people to look at how they can put patient capital to work in these areas. And so, you know, it’s just kind of a added thing that we really want to focus on, is to say, “Okay, in addition to that, how can we also come alongside the stakeholders?” And number one, find out what’s most important, find out how we can, you know, really make a change in that area? And then you know, how we can show that back to not only our investors but kind of the investment community as a whole as well.

Jimmy: Yeah, that’s terrific. And like I said, I applaud you for taking the efforts that you’re doing to do that. Because I want to back up for a second and get your personal story here. Ashley, can you tell me a little bit more about your background? How did you get to where you are today, it looks like we’ve bounced around quite a bit over the years, maybe you can kind of take me through your career path that led to this point?

Ashley: Yeah. It’s kind of an interesting, you know, story and seemingly incongruence that it was like all the God bless a broken road that led me straight to here, right? And so I went to Chapel Hill for law school and got out and work for a big firm and did corporate securities work for that big firm, and then went in-house with a tenant in common sponsor. And we were going crazy and you know, during kind of that big push back in 2005 to 2007, of doing tenant common transactions and we also raised the number of opportunity funds so that we could develop our own properties that we then would take out to our investors.

And when the…you know, when the wheels came off the real estate business, I ultimately went back into doing corporate, M&A securities work, and did kind of the… I really had a passion for helping business owners and entrepreneurs being an entrepreneur myself. And I had set up a consulting company called Soterian that did kind of social impact investing, and also consulting for business owners about how to groom their businesses for sale.

And so I actually did transactional work with a number of different law firms. And then I sold that M&A practice back in 2017 to be able to focus exclusively on doing that, with a goal that we were going to create a fund that found great operators that really kind of matched up with our purpose-driven investment thesis and our desire to have impact, but to have impact in the form of running a really great business that made great profits for all of the stakeholders for its shareholders, for its owners, for the employees, and for everybody involved.

And so I was running that and was in the process of doing that. And I was actually at…said that I was at that CLE when I kind of heard about the Opportunity Zone program. And, you know, it occurred to me, I was like, “Wow, this is like 1031, and private equity got married and had this beautiful baby called Opportunity Zones.” And so that’s what led to us creating the Ōz companies that does a consulting for folks, for business owners, and for municipalities and for other folks who want to learn about it, so that we can help them to get the word out, to help them in whatever way we can to try and take advantage of this program.

That’s one of our main core values is to lead with a giving hand. And so we try to do that by educating and by connecting folks inside of the space. And then as they get to know me, and as I get to know them, a lot of times that will be the kind of the connector of how we ultimately shape a go forward relationship where we’re functioning as a fund manager for a couple of developers that either have their own capital that they’re able to raise, that they’re looking to raise, and that they wanna focus on being a good developer and a good operator. And we’re able to help them by being their fund manager.

So it all kind of came full circle with all of this kind of seemingly disparate things where we were going to be doing this anyhow, and this provided the great tax benefit to how it all came together. So we’re really excited about it.

Jimmy: You’re going to make to your fun now, for a minute, we were talking a little bit earlier about how you’re leveraging Section 1202 of the tax code at the QOZB level of your fund. For those who don’t have their head buried in the tax code, can you tell us more about what Section 1202 is exactly, and how you’re leveraging it, how it might provide you with some additional flexibility at exit?

Ashley: Yeah. So I gotta give a shout out to Blake Christian at HCVT for kind of the thought process on this. And he’s doing some really kind of out-of-the-box, cutting-edge stuff of taking innovative concepts from other areas of the law and plugging them into this. And that’s one of the things that we’re trying to do as well within or inside of our company is to take other things that we’ve had success in doing. And then we’ve seen applied successfully and kind of be a Opportunity Zone innovator, if you will, and to, you know, to come up with some cutting-edge stuff that we hope will ultimately benefit our investors.

And this 1202 piece is one of those. And Section 1202 relates to qualified small business stock and applies to C corporation stock. There’s a couple of requirements, but effectively, if you’re starting a business now, and you have it set up as a C Corp, then if you sell it after five years that you effectively get…there’s a similar tax advantage to the opportunities and for you don’t pay taxes on that sale.

And so what it allows us to do is we are set up inside of our fund at the QOZB level, where we start out as a pass-through entity with the ability to convert. And in our case, we may convert very quickly because we’re going to have lots of revenues coming from the outset because we’re buying an active company. But for companies that have start-up losses, it allows them a little bit of ramp time that they can pass through those losses to their investors.

And then they can convert to a C Corp, which like we just kind of talked about earlier, gives you the benefit of being able to reinvest into Opportunity Zone property. And take advantage of that, you know, that differentiation between the 21% C Corp level tax rate, and then 39% pass-through. But what this allows is a contingency to where you get a really good offer, or you’ve got a really good exit strategy that’s prior to the 10 years. And you want to take advantage of that. And it allows you to be able to do that by kind of putting this Section 1202 piece in there on the frontend.

And so effectively what…and this kind of comes into some other strategies that we’re deploying in the context of how we’re acquiring each and one of our individual portfolio companies, and some stuff that we’re putting in place relative to retention, employee retention, and that kind of thing, is I’m all about mitigating downside risk as much as possible and coming up with contingency plans. And so this is one of those contingency plans that we’re rolling out.

Jimmy: Good, yeah. And that would provide you with some additional flexibility, if you could start selling off these assets after 5 years, instead of 10. Provided that they meet the eligibility requirements of Section 1202, of course. As I thought that was an interesting idea, I hadn’t…I might have heard that one only once or twice before. So it’s relatively unique. Tell me a little bit about the other side of the Ōz Group of Companies, which is the consulting side of your business, the Ōz Consultants.

Tell me what you’re doing there exactly, who you’re working with, and what type of services you offer.

Ashley: Yeah. So it’s kind of soup to nuts on folks that we’ve engaged with, you know, anywhere from single family, rental developers to mini storage developers, to even to municipalities. And, you know, what…like I said, kind of before is our main goal, and our main objective is to try and educate people as much as possible about the opportunity zones, and about the requirements inside of the opportunity zones so that we can allow people to take advantage of them.

And whether that’s somebody that wants to do their own funds, or whether that’s somebody that wants kind of a deeper ongoing relationship with us, we’re really trying to harness and to leverage the knowledge and the expertise and the, you know, the staff and the personnel that we’ve put together, to be able to benefit as many people as possible.

And so, you know, we also have to get paid along the way. And so the consulting piece allows us to be able to do that, instead of trying to figure out how you work some kind of purchase arrangement, that kind of thing, on the frontend, it allows us to work through deals. And for me to be able to educate and just be able to share knowledge and for my team to be able to share knowledge, and to connect people with other people and potential stakeholders and deals and that kind of thing, that, you know, I don’t necessarily know that we would have time or bandwidth to be able to do if we were just functioning as a fund manager. What it also has done is it’s created a great deal flow and deal pipeline for us to where we’re able to get plugged in with great operators and great people inside the industry. And, you know, we’re then able to, you know, for the folks that we kind of mesh with culturally, and they mesh with us culturally, we’re able to make the transition into more of an ongoing relationship.

So it’s been really exciting because, you know, I’ve got…I am a hopeless, hapless entrepreneur at heart. And I love having conversations with folks about lots of different stuff. And it’s allowed me to do that, and it’s allowed me to be able to, you know, to help them kind of go down the next steps of the process as they pursue whatever they’re trying to do within the opportunity zones.

Jimmy: So if I’m a developer with a project in an opportunity zone, particularly if it’s in your region of the country, or if I’m a small business owner with a business inside of an opportunity zone or considering relocating to an opportunity zone, can I come to your consulting group and get some advice on how to structure a fund potentially, or have you guys manage a fund for me? Or what exactly are you providing for those types of individuals?

Ashley: Yeah, exactly. So I think that the biggest key is, is that people, they know generally about the program, and they really need help getting their arms around how we apply the program to their specific situation. And then, you know, how to identify and to source a great professional team to assist them with the process.

And so, like you said, whether that’s a developer, or and to your point, I mean, I’ve helped because I’m in the M&A space and that’s kind of the world that I operate in, we’ve helped a lot of business owners that are exiting businesses figure out how they’re going to deploy that capital, and how they can take advantage of the Opportunity Zone program to really have a drastic impact upon their wealth generation by mitigating, at least deferring the taxes on the gain that they’ve had.

And so, you know, for some, that’s, you know, they want to buy another business and so we help them structure that and we help them put together the framework for how they do that. For some, they want to make investments into other deals. And so obviously, we’ve got our own fund, but then we’re also working with a number of other funds, so that if they’re not necessarily interested in exactly what I’ve got, I direct them to other great operators and fund managers that I know for them to be able to place funds with them.

And then I think the final piece is that, you know, one of the things that we’ve tried to really do is we’ve tried to educate municipalities and to work with them to really get on the frontends of how they take advantage of the program and how they present themselves as being attractive to investment. And, you know, that comes from…you know, so I worked with a county in a town with Madison Street with Erin Gillespie, who I believe was another guest on your podcast.

And, you know, they’re putting together a prospectus for them. And then we come in, and we add kind of the extra sauce of that of, okay, as a fund that is looking to relocate operating businesses, these are the types of things that we want to see in that perspective, these are the types of things that we need to be able to have and resources that would be beneficial for us to be able to rely upon you for.

And so it’s been really neat to see how, you know, kind of all of this stuff has come together and that Opportunity Zone consulting piece has been kind of the vehicle for being able to do that. And then out of that, we’ve got our, you know, our fund that’s come to fruition, and then we are actively, you know, serving as a…we’re helping some developers right now as they walk through the fund management piece. And it’s been neat, it’s been neat to be able to help people.

Jimmy: You know, that sounds great. And yeah, Erin Gillespie was a previous guest on my podcast, she was featured in podcast episode number 14, a community-driven approach to opportunity zone investing. So I encourage everyone to check out that episode after you’ve listened to my conversation with Ashley today.

So it sounds like you can help a lot of different people with their very specific questions about what they can do in the opportunity zone space. I get emails constantly from people asking me questions. It seems like everyone has a very unique situation, I might start passing along some of them to you, if you don’t mind.

Ashley: Sure. And I mean, I think that, you know, one of the things that we can do for those folks right now is to, and I’m a firm believer in this, that, you know, there’s really nothing new under the sun. And I’ve got some, you know, I’m an idea guy, so I generate ideas, that’s what I love to do. But one of the things that I love to do with that is to share those ideas so that other people can run with them. Because that’s what this is all about.

You know, this isn’t about, you know, trying to hoard things and be like, “Ah, this is mine. And yeah, you gotta come through me.” This is about us as a community trying to get this information out there to get people educated about this, so that we can really, really, really drive money to these areas that need it really bad. And so, you know, one of the things that I would say, and I’d say, you know, on this forum is that, you know, people can do this themselves too within their communities.

You know, to get ahold of their stakeholders, you know, your economic development representative, your municipal representative, who’s assisting with, you know, economic development type stuff, as well. And, you know, any kind of organization, whether that’s, you know, housing, that kind of thing, and starting to pull those people together, and or facilitate or get them to assist you with bringing all of those people into a room is invaluable.

And one of the things that I’ve told people, too, is that, you know, there’s lots of people who will come and speak to a group of folks like that. I regularly make this, you know, that I’ll come and speak, if you could put 30 people in a room, that I’ll come and I’ll speak to that room because it’s valuable for me to be able to get this information out there. If anything, just to be able to do good with that.

And so I think that we as a community can start doing things along those lines, to start educating people about this because education eliminates objection. And when people really see that we’re really trying to help, it’s gonna become clear that this isn’t just a play for people to get richer. This is a play for us to really make an impact.

Jimmy: Absolutely. So yeah, please talk to your local community leaders, talk to the mayor’s office, talk to your county officials, get people in a room and call Ashley Tison, Call Erin Gillespie, get them to speak to your group and get them educated, right?

Ashley: Yeah, I better watch out on that offer, right?

Jimmy: Yeah, your phone’s gonna start blowing up now. So you mentioned that you’re an ideas guy, I want to talk to you about an idea that we were talking about a little earlier before we got on the show here. You’re planning a second Ōz fund or Opportunity Zone fund that you referred to me as a sell-in fund that would essentially provide a succession plan, growth plan, recapitalization plan, and social impact plan for small business owners and operating businesses. Can you tell me a little bit more about that idea?

Ashley: So this kind of stems out of what we do at Soterian. So we help…and at Soterian, we help business owners find their why, find their how, and we find their when. And as we have done that with business owners, and we put them through a program as well, where we put them into a mastermind group, we vest them with great professional resources, and we focus on the eight drivers of company value that really make a business attractive to a prospective purchaser.

And they can usually get them an extra turn on cash flow in their valuation and in their multiple that they exit with. And as we’ve gone through that process, and as we’ve worked with the business owners that we have, you know, there’s these subjects that keep coming up that you just mentioned, succession plan, growth capital, and, you know, expansion, the potential to be able to grow through mergers and acquisition.

And so, you know, being the idea guy that I am, as I saw those things kind of consistently popping up, I was like, you know, would it be really fantastic is if we had a fund that could come in and help these folks in whatever position they’re in? If they need a succession plan, and we’ve got a good operator that we can plug into that company, you know, we do that. If they need growth capital, where they’re really excited about continuing the business, but they’ve got an opportunity that they need to seize on, that we provide that. And, or if they want to expand their facilities, they want to expand their operations, they need to grow, then we provide capital for that.

And so that’s what led to this idea of selling funds where we can do all of those things, but in addition to that, what we’re gonna, and this is the theory of it, and we’re working through the details of this right now. And we’re hoping to be live with this soon. But we’re conceptually an owner, we go to an owner, and we say, “Listen, we’d like to purchase your company. And, you know, here’s…” We do evaluation, we do those as part of what we do in our everyday process.
And then we base our multiple on how much and what they’re going to do on a go forward basis.

Ideally, being that they reinvest either all depending on the size of the fund and the size of the company that we’re buying, or a portion of the proceeds back into the fund. And then we provide them with growth capital for being able to grow their business, and we hire them back to do specifically that. And we compliment for the growth. And we’re working on some of the bells and whistles relative to that, but and how we can shift as much of that to, you know, to the backend on the exit as possible.

But we effectively allow business owners to be able to take advantage of what we’re doing with Rick. So Rick and Synergy is the…you know, that’s the basis of this fund. And we’re evaluating right now, whether this is going to be, you know, micro-funds, or kind of be one big fund, but we’re leaning in the direction of it being a big fund so that there’s also the diversification across industries as well, to where, you know, people as they sell into this fund, that they then also glean the benefit of other business owners that are selling in as well.

And ultimately, it becomes its own community, right? A community of these folks that are not only vested with great professional resources backing them up, but most importantly, that have a passion for having a purpose behind their company, and who want to make a difference. And we’re going to help them do that not only by running a great company, and by being a great boss to their employees, and a great employer for their employees, but by showing them how we can move them into these areas, and how we can really, really have change in these areas.

So that’s the big picture concept. You know, stay tuned for details.

Jimmy: Now, that sounds really exciting, and a pretty neat idea. Getting toward the end of our conversation here. But I wanted you to just kind of plead your case one more time here. I know you’re very passionate about the Opportunity Zones program. Can you just describe at a high level what it means to you and why you’re so passionate about it?

Ashley: Yeah, so I mean, it goes back to, I mean, this. And I think that it mirrors my journey, right? And that I had to do some deep soul searching relative to what it was that I wanted to do. And that ultimately stems out of who I am. And I had to look deep to do that. And, you know, I had to make some changes in order to align with that. And that’s what kind of led me through my journey of selling my law firm, and in going into consulting, and going into helping business owners.

And I think that you’ve probably heard this word coming out of my mouth a lot, but there’s a passion to help. And there’s a passion to do right by others. You know, one of my core values and my personal mission statement is to make a difference, to make a difference in my big picture of what I’m here on this earth to do within my life, but also to make a difference in every interaction that I have.

And so Opportunity Zones are a chance for folks who have pent up capital gains to make a difference. And so our fund in our whole company is focused on exactly that. We’re focused on making a difference. And we’re going to do that, and we’re going to make a great profit for investors along the way. But that’s first and foremost what we’re all about, is it we’re about having an impact, both impact in the communities where we’re going into and bringing, not just investment dollars and growth via that, but by bringing programs, by bringing resources, relationships, connections, and really having people that are interested and excited about getting plugged in.

And then we’re also interested in making a difference in the lives of our business owners and the people that we partner with. We obviously want to…you know, we want them to do well by their families, we’re really, really excited about the wealth creation opportunities that this tax legislation creates. But that’s secondary to the true opportunity here. And you know, I know that everybody in the industry is sick of that word, but it really is. It’s an opportunity to make a difference, it’s an opportunity to make a difference in the lives of developers, of builders, of business owners, who want to have impact.

And you know, that’s across the board, right? That’s from just moving literally, just by moving your business into these zones, you have drastic impact, let alone when you couple it up with some really intentional efforts to really figure out what they need, and figure out how you can resource that need via the resources that you already have.

It’s about stewardship, right? About navigating those resources and maximizing them for the benefit, to maximize the benefit for people who are ultimately going to be able to be blessed by that. And so that’s what we’re excited about. And, we’re certainly going to do well by investors, you know, that our numbers, I think, speak for themselves that we’re interested in returning a great number for investors, too, but that’s what our focus is.

Jimmy: Do well while doing good, right?

Ashley: Exactly right. Doing good.

Jimmy: Well, very well put. Before we go, there is a question I posed to a lot of my podcast guests, and they’ve gotten some pretty interesting answers. I like your answer. Now, what’s been the most memorable investment that you’ve made over the course of your career? Is there anything in particular that stands out to you?

Ashley: So it’s actually kind of fun because I think it might have been my first investment, my first, like true investment. It was when I was at the tail end of working at the big firm. And I was really wrestling with this, you know, that this stirring that I had inside of me to make a difference. And obviously, I was making a difference in the lives of my clients and that kind of thing, but I wanted to really be able to do something on the ground. And I am not really sure how I got plugged in with this guy. But he was a commissioner that had to sell people’s homes when they went into a nursing home.

And so he called me with a situation where a woman had gone into a nursing home, and he was having to liquidate her assets in order to make her eligible for Medicare and Medicaid. And she had an adult son who lived in the home where they had had to take her out of, and he kind of told me about the situation, and I said, “Listen,” I said, “You know what?” I was like, “This is actually something I’ve really been interested in doing.”

I said, you know, “I’m going to set up a company to buy that house,” and there was actually a lot next door. I said, “I’m gonna handle it like a wholesale or something on the lot.” I was like, “I’ll take care of him and basically cover that house for him at my cost as a way to be able to bless him and to give back.” And so that birthed Soterian. And, you know, that was the first investment that we made. And he was awesome. He was a great guy, I really enjoyed getting to know him, and I had the fortunate opportunity to be able to bring my kids over and work in his yard and do some other stuff that I hope made a difference.

Unfortunately, he passed recently. And so I ultimately sold his house because it was kind of in the… It’s funny is that I sold it before I knew about Opportunity Zones, and he’s in an opportunity zone. So I hope the gentleman that bought it is knowledgeable about it. But it kind of set the stage for, you know, what I’ve been trying to do within, you know, my investment thesis and investment strategy.

And so kind of out of that, I ended up kind of through similar connections in that real estate community, I ended up buying a mobile home park. And that mobile home park, you know, I’d always heard that mobile home parks are great, you know, they’re great cash flow streams and that kind of thing. And it was. It’s been fantastic out there. But I also learned about, you know, tenant management, and septic tanks, and broken water lines, and really, really mean dogs.

And thankfully, I didn’t have to get any rabies shots. But that mobile home park has been a Ph.D. in, you know, in real estate investing, but it’s been one that’s actually been really neat because I’ve had the opportunity to be able to get to know a lot of the people out there, and to help a couple of them with some different legal issues and to, you know, to just kind of generally try and provide…and, you know, I think mobile home parks kind of get a bad rap.

But, you know, unfortunately, there are some of the few affordable housing that’s left out there. And so I’m actually in the process of exiting that investment as part of this Opportunity Zone program, right? The Opportunity Zones have provided opportunity, where now it’s like, “Oh, yeah, I need to probably go ahead and move that one.” And the folks that I’m exiting it to have their…we’re actually in conversations about them maybe doing an Opportunity Zone fund.

And so, you know, this whole concept and, you know, I guess it’s kind of pay it forward investing, if you will, but I’ve seen it within the concept of doing good, doing good. I have reaped the benefit of sowing that good in spades. And so I’m excited about these folks and what they’re going to do with the park and that they’re actually going to keep it a park and keep it to where it’s an affordable housing alternative for folks. And I’m excited about helping them, you know, figure out how they can navigate the Opportunity Zone play as well.

Jimmy: Well, that sounds great. That’s an impactful story. Thanks for sharing it with us. Ashley, thanks for your time today. I appreciate our conversation here. Before we go, can you tell us where we can go to learn more about you and the Ōz Group of Companies?

Ashley: Yeah, so it’s www.ozrollover.com, that’s not OZ, that’s ozrollover.com but it functions with the same O. And I’m available at atison, and that’s spelled with an I like Tison like Bison @ozrollover.com. And I think that you’re going to put my…I’m a big fan of giving out my cell phone number. And I’d love for people to be able to reach out and touch me and, you know, get ahold of me so that we can continue the conversation.

Jimmy: Good. Well, give us your cell phone number then.

Ashley: How about we put that one in the show notes.

Jimmy: All right. We’ll put that one in the show notes if you want to. If you want to find Ashley’s cell phone number, you got to visit the website. So yeah, I’ll have show notes for this episode on the Opportunity Zones database website. You can find those show notes at opportunitydb.com/podcast. I’ll have links to all of the resources that Ashley and I discussed on today’s show. And I’ll have Ashley cell phone number on there, too, so you can hit him up. Ashley, I really appreciate your time. Again, thank you for joining us today.

Ashley: Thanks, Jimmy. Really appreciate you and what you’re doing within this space. Once again, getting that information out is key. And so thank you for what you’re doing. And thanks again for having me on the program.

Jimmy: You bet. Thank you.


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OZ Pitch Day

March 7, 2024