How are Opportunity Zone funds responding to the ongoing coronavirus pandemic? Find out why one Opportunity Zone fund walked away from $500 million worth of real estate deals last month.

And could the current economic climate present some unique opportunities for investors?

Chris Loeffler is co-founder and CEO of Caliber, a private equity real estate investment firm whose Opportunity Zone fund has thus far raised $70 million.

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

Episode Highlights

• How the ongoing coronavirus pandemic may impact the Opportunity Zone marketplace.
• How Caliber’s founding during the Great Recession makes them well positioned to tackle the challenges of the current economic environment brought on by the coronavirus pandemic.
• The opportunity that the current economic situation may present to investors.
• How Caliber has responded to the pandemic by walking away from $500 million worth of their deals in March.
• How Opportunity Zone investing may change in the wake of the coronavirus pandemic, and why businesses may be well suited to take advantage of the changes. Supply chain re-domestication.
• The tax issue for investors who may have sold stocks over the past few months, and the opportunity that OZ fund investing presents.
• The mindset change that investors should consider adopting when exiting the stock market.
• How the mainstream news media fails to report on a lot of the finer details of the Opportunity Zone initiative, and some of the remaining misconceptions.
• Ways for non-accredited investors to get involved with Opportunity Zone investing.

Featured on This Episode

• Chris Loeffler on LinkedIn
• Caliber
• Opportunity Zones Podcast Episode #32 with Chris Loeffler (June 2019)
• IRS Extends Deadlines for 1031, Opportunity Zone Investors (Bisnow)
• Opportunity Zones: The Missing Public Narrative (Medium)
• How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich (NY Times)
• Opportunity-Zone Funds Are Off to a Slow Start, Lagging Behind Heady Expectations (WSJ)

Industry Spotlight: Caliber

Founded by Chris Loeffler in 2009 in the wake of the financial crisis, Scottsdale, AZ-based Caliber is an asset management and real estate services firm with over $750 million in assets under management and development in commercial, residential, and hospitality real estate in Alaska, Arizona, Colorado, Nevada, Texas, and Utah. Their $500 million Tax Advantaged Opportunity Zone Fund LP was among the first of its kind.

Learn more about Caliber

• Accredited Investors: Visit CaliberCo.com
• Non-Accredited Investors: Visit InvestCaliber.com

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.

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Show Transcript

Jimmy: Welcome to the Opportunity Zones Podcast. I’m your host, Jimmy Atkinson, and today I am joined by Caliber CEO and co-founder, Chris Loeffler. Chris joins me from Scottsdale, Arizona. Chris, thanks for coming on and welcome back to the show.

Chris: Great to be here Jimmy, and thanks for having me back.

Jimmy: Yeah, absolutely. It’s great to be speaking with you again and I’m speaking from my home office today in Fort Worth, Texas. And I suspect you’re speaking from your home office as well under stay at home orders due to the coronavirus pandemic. Is that correct, Chris?

Chris: Yeah, we were able to very quickly about four or five weeks ago transition all of our 80 employees to a remote work environment. And so far our team has been coming together doing the remote happy hours and getting a lot of work done. So we’re still operating successfully as a business just fine. But we’ll all look forward to the day we can go back to the office.

Jimmy: Yeah, definitely. That’s the case for many of us, right? This has been pretty tough times on a lot of us all over the country, all over the world, really. And I’m sure we’ll all be happy when the coronavirus pandemic is over and we can return to normal life. And we’ll speak about coronavirus a little bit more later in the show and specifically how it relates to Opportunity Zones. But first I wanna introduce you a little bit more here, Chris.

You were on the podcast with me last year, actually. You were on one of my June episodes of 2019. We first met each other and sat down for a chat at the SALT Conference in Las Vegas last year. And for those of you who haven’t listened to the show, I would encourage you to go back and listen to that episode with Chris and I. But for those who haven’t had a chance to listen to that yet, Chris, can you tell them a little bit more about Caliber and what makes your fund unique?

Chris: Yeah, so Caliber is in the business of building wealth for high net worth individuals and for the advisors that serve them specifically through real estate private equity funds. We’ve launched over seven discretionary private funds at this point in time in our 12 year history as well as another 15 or so syndicated offerings. And among other things beyond just doing the fun side of the equation, we’re also an active asset manager. We are a real estate developer, general contractor, real estate broker. So in essence, we offer a vertically-integrated platform for individuals who wanna grow their wealth with real estate to come meet the company, get to know the people, understand the strategies that we have currently open in the market and then invest.

So because of that, we about two years ago became one of the largest Opportunity Zones fund sponsors in the Southwest region, focused on Arizona, Colorado, Texas, Nevada, Utah and Idaho. And we invest in what we call middle market real estate. So that’s projects we buy between $5 million in value and $50 million in value across the board, different types of multifamily, office, retail, hotel, industrial, you name it. So ultimately, we’re an investor looking to buy the best possible deal at the best possible project, transform that project to build value along the way, and then sharing the profit with our clients.

Jimmy: Good. Good intro there. Thanks for getting us caught up. Yeah. Caliber has done a great job so far. I know you guys raised a lot of capital pretty quickly out of the gate. That was actually one of the main discussion points of our first episode. I wanna turn our attention now to coronavirus like I mentioned at the top of the show.

The economy’s largely been shut down throughout the vast majority of the United States and the government has responded by introducing and passing actually three different pieces of coronavirus response legislation as of the recording of this episode here in the middle of April, and possibly another huge coronavirus stimulus package on its way here shortly in the next few weeks. I believe over $2 trillion have been spent so far. Chris, how will this pandemic and the government’s response, the stimulus package, how do you anticipate it’s going to affect Opportunity Zones in both the short run and in the long run?

Chris: I think that the best way to answer that for me at least for this entire podcast is to stay focused on the opportunity that will come out of the change that’s occurred in our market. And I do think to a certain degree, it’s a permanent change in how we live our lives. My wife is a nurse. She’s on the front lines of the coronavirus pandemic. We are exceedingly worried about our community and the health and safety of all the people that we employ as well as everybody we know and touch. And so I don’t want anyone listening to this to think that I’m ignoring the risks or the safety that needs to be focused on.

And yet I think the most value I can bring to the table for this conversation is to focus on what comes next. What will occur based on my knowledge and skillset. And to give you an idea of where that comes from, we started Caliber in late 2008. So I built this business starting in the world’s worst recession since the Great Depression. And so a lot of our instincts, my instincts and the company’s entire culture ethos, I was born around operating in a market that just isn’t functioning correctly. And that’s where we find ourselves right back in today. The question is, will it be a two, three-month issue? Will it be a six, nine-month issue? Will it be a 24-month issue? And I don’t think anybody can credibly say what that is gonna look like.

We can look at very specific opportunities that could come out of that. And I’ll sort of range those opportunities from the short term opportunities into the long term opportunities. So in the short term, you’ve got a significant amount of developers who were, as of three months ago, at all time highs, moving projects forward incredibly quickly and Opportunity Zones as an investment category had finally started to take off. We got our final regulations in December and all of a sudden, institutional capital sources, wealth management complexes, etc, said, ”Okay, it’s time to take this thing seriously. We now know what the parameters of the program are. We can finally start recommending this to our clients.” And so if you take that and you combine that with the coronavirus pandemic on the short term, you’re probably gonna see quite a few developers who are in trouble with a project. And as an investor, there’s an opportunity for you to either be snarky in that situation or be a white knight.

Caliber’s choice has always been to be a white knight. So we’re looking for all those developers who got their project 90% complete and just hadn’t completed their funding to come to us and say, ”I still wanna do this deal. It makes sense in the next 10 years, it may not make sense in the next 6 months, but 10 years from now it looks like it’ll be a phenomenal project.” And that’s what our outlook is as an Opportunity Zone investor. And I’m willing to take a discount to my valuation, allow Caliber or a different fund to come in with maybe a smaller amount of equity for a larger amount of ownership than I was expecting in order to get my deal done. And so we’re looking at that over the next 6 to 12 months to be a significant driver of opportunity.

And for those of you who are Opportunity Zone investors, I mean, you know, will the market get back in two months, six months or nine months? I don’t think anyone can tell you, but in 10 years will owning even in a hotel, which has been in the hardest hit category be a good thing to have on a tax advantage basis? Absolutely. And so I think if you look at it on a short term basis, there’s a lot of opportunity there. I’ll pause there, but I’ve got more to say when it comes to operating businesses and other forms of investments that could come out of it.

Jimmy: Yeah. I’m curious to hear your thoughts on that as well. And for you though, Chris, I wanna hear about how this has affected you and your fund in particular in terms of the fundraising specifically. Have you noticed any change in fundraising in the last few weeks here due to the pandemic?

Chris: You know, as they say in the world of investing,”Past is prologue.” You know, the past history doesn’t repeat itself, but it does rhyme. So we’re drawing right now Caliber off of our 2009 experience. And one of those experiences was that no matter what was reported in the news, it was always six months late and typically it’s wrong. I think that the window is a little bit shorter here. But the only way for us to know exactly what’s going on in the market is to stay active in the deal side.

And so, what we did in March was, we took all of the investments we were trying to buy, which was about $500 million worth of projects and we walked away from every contract. And so we had things in contract, we had things in LOI stages. We told all of our people, ”Hey look, we might still wanna do these projects, but for the time being, we can’t see enough information to move forward with them.” And we do expect a handful of those to come back to us in the next three to six months with the, you know, the old, “What price would you do,” that type mantra.

On the flip side, we immediately changed how we were doing deal. And so we started going into the market and instead of spending a lot of time with the real estate brokers who we do still spend time with, we’re now spending time with special servicers, lenders, bankruptcy attorneys, banks, etc. So all the different people that participate in the market when it gets distressed. And that does not mean that I’m predicting another 2008 scenario. It just means that I know in order for us to be able to know that it’s coming and do what’s right for our investors and make the most of it, we have to be engaged in that conversation constantly.

So every week we’re constantly having those phone calls, we’re constantly meeting. We’re constantly discussing what we’re hearing. And if we start to see the market go towards a distressed designation, we will know to spin up our auction machine and our, you know, non-performing note buying platform and that kind of stuff. So Caliber in general has really just been focused on protecting the assets we currently have, which are all pretty in pretty good shape and then preparing the internal infrastructure that’s necessary so that an investor who put a dollar into our fund knows that they’re gonna be buying at the best possible price, especially if the market does adjust.

Jimmy: Oh, that’s fascinating. So you actually walked away from all of your deals in March.

Chris: Yeah.

Jimmy: That’s incredible. So you basically had to rewrite your entire playbook just about, I don’t know, six weeks ago or so. Obviously the pandemic was the catalyst for that. But I wanna hear more about, I wanna hear the story behind the decision and the decision-making process. Could you kind of walk us through the timeline there of what news you received and who you spoke with and when you decided to make that decision to shut down your deal making?

Chris: Yeah, I would say it took about two, three weeks of phone calls. It was probably about 200 to 300 phone calls. I spoke to people as wide ranging as the head of Deutsche Bank’s wealth management group for all of North America and people on the investment banking side at Goldman Sachs all the way to, you know, local developers people, you know, who don’t even have a website that you would never find in a million years if you’re looking for them and getting, kind of gauging everybody’s experience and everybody’s thoughts on not what’s gonna happen tomorrow or the day after that. You gotta go seven layers deep into the bean dip, so to speak to think about what happened after each one of these stages clears.

One of the people I talked to as an example is one of our board members who happens to be the CFO at Premera Blue Cross in Washington state. So sitting in Seattle, he was seeing the very early stages of the first outbreak with the most unfortunate death that happened in that nursing home and was able to give me a lot of insight into exactly, you know, how healthcare was responding, exactly what they thought would happen kind of going forward. And then we keep that information updated. And no matter what it boiled down to time to change our entire thinking back to our kind of 2009, 2010 era activities where the five-year business plan gets put on a shelf, you take the old plan out and you dust it off.

As entrepreneurs, my co-founder and I, you know, moved through the stages of grief very quickly and right into acceptance and started moving on. The only difference is instead of having 2 of us in a room, we now have 80 people. So we needed to make sure that we kept our team in that same lane of thinking that our business is good, we’re not laying people off, but also we are gonna change a lot of what we do and where we spend our time because we have to be prepared if the market does move into a state of distress. If it doesn’t, all we do is turn the switch back on and go right back to the plan we were already on because we were on a good plan for the market that existed at the time.

Jimmy: But certainly you had to pivot and pivot quickly and with a fairly large team there, 80 people, not just you and your one business partner anymore like it was when you first got started in ’08, right?

Chris: Yeah. It’s funny when you’re all sitting in one room, it’s a lot easier to get things done to a certain degree. But now that we have a big team with highly capable professionals, it’s amazing once you get them engaged, what they produce.

Jimmy: That’s great. That’s great. I wanna revisit something you mentioned before that you had more to talk to and that was business investing and how you think that might change in the wake of the coronavirus pandemic and the government’s response. Can you talk to us a little more about that?

Chris: Just as it relates to Opportunity Zones investors. You know, if I look at it from the investor’s chair, what is gonna get you the most benefit out of this program? It’s going to be obviously the tax benefits that are in the statute. But growing the value of your position in an Opportunity Zones fund over a 10-year period of time, both produces the greatest investment return as well as the greatest tax benefit because you pay no taxes on the growth, right? And so in a tight market when real estate development was on fire prior to coronavirus and when businesses were having a fairly easy or the easiest time historically in the last 12 years gaining access to capital, it was hard to get a deal, you know. And if you’re buying at the highs, it’s hard to create value over a 10-year period of time. You might have a stable business, but it might not grow in value nearly as much.

And so if you think about it today and investing in operating companies, what’s happening? There’s a fundamental shift in our country where they’ve put trillions of dollars into supporting small business, which really hasn’t happened, at least in my lifetime. In addition, they’re contemplating trillions of dollars of additional subsidies for things like infrastructure. There’s a massive in shift in mindset around manufacturing in America. All of that is gonna create a lot of opportunity in places that Opportunity Zones already exist like Mesa, Arizona or Tucson or, you know, you name it. I know that the state of Arizona is already starting to build a plan to shift even further, to adding more manufacturing into their domestic economic plan.

So as an Opportunity Zone investor, you have a tremendous ability here because you have a capital gain, you’ve gotta get it into a fund now and you get to invest for at least 10 years. So you can kind of move past the uncertainty of today and tomorrow and move into longer term trends that you have a lot more certainty over that you can invest in and that we’ll be investing in American made manufacturing and infrastructure and schools and hospitals and real estate development and things like that that people will need and do need currently.

Jimmy: Yeah, I think this pandemic, as horrible as it is, I try to see the silver lining there and that is that it may be creating a lot of economic opportunities, supply chain re-domestication as you just were speaking of a little bit and certainly a lot of other opportunities out there as well. I think it’s also created a lot of opportunities for investors who have been selling stocks over the past several months. At the end of last year, certainly, a lot of people were selling stocks and even more so in the past couple of months during the selloffs toward the end of February and beginning of March. A lot of them may not have had a tax plan in place in a lot of cases and yet they have generated substantial capital gains upon selling in most of those cases as the market’s gone up, up, up, over the past decade or so until the downturn during February and March. Chris, what do you make of all that? What do you think is the opportunity there for investors who’ve exited the stock market in recent days here in recent weeks and what are some time sensitive deadlines that they should be aware of?

Chris: Yeah. So in the case of what’s actually happening in the market, you saw a lot of people sell off at the end of the fourth quarter of 2019 and then you saw that fell off continue obviously during the coronavirus pandemic. And all of those people were probably selling for the same reason. They thought that the market might be overpriced and they were right depending on what stage they got out at, right? But along the way, while they were trying to be defensive with their portfolio, they were creating and did create themselves a new problem which is they now have a tax issue And they may or may not know if now is the time to reinvest back into the stock market. A lot of people are predicting another dive or another dump in the market.

And so when you look at it, say you have a million dollar portfolio, if you harvested gains and were able to harvest a $300,000 capital gain, then you can take that 300,000, invest it for the long term into this type of structure where you get a tax benefit, you can invest with more certainty, you can invest in real estate, be non-correlated. It’s an unbelievable opportunity for those investors who essentially forced themselves to sell out of the market because they saw what was coming to redeploy their capital when they’re still uncertain on whether they want to put the rest of their cash back to work or not.

You can keep the 700,000 on the sidelines in cash and wait and see if you wanna come back in the stock market, but put the 300,000 you currently had to work in a tax efficient way and that is super important right now. And a lot of people talk about cash is king right now and it’s good to be in cash. Well, it’s really not if you’re undeployed, especially if you expect that the $2 trillion that they’ve already spent in the probably $5 to $10 trillion that are gonna be spent beyond that are gonna generate inflation.

Ultimately, real estate aside from gold is the best protection against inflation that’s historically existed in the history of the United States. And so people need to start thinking about their money in a less linear format. Like I got out of the market, when do I get back in? Okay, I got out of the market, I can take this piece that I would have to pay taxes on and get it into real estate now and avoid some inflation down the road. And so that main deadline is if you sold stocks is 180 days from the day you realize that capital gain or when they close that sale.

If you happen to have sold out of a partnership to create your short or long term capital gain, you have the ability to invest as long as that sale happened in 2019 up until July 15th of 2020 which is an extension of a deadline that was previously sooner. And so in essence as an investor, you’ve got between the next couple of months if you sold stock and up ’til July 15th to make a decision. And I don’t think we’re gonna have too much more certainty between now and then. But as a fund manager, I can tell you, I do have certainty that I can take advantage and make the best of this market in terms of real estate development and other forms of Opportunity Zone investing.

Jimmy: Yeah. Certainly it’s a great portfolio diversifier, if nothing else, right? And getting that non-correlated asset if you’re investing in real estate, which the majority of Opportunity Zone funds are invested in real estate. I think it creates a very interesting opportunity for investors who have sold their stocks over the past few months. It’s certainly worth looking into anyway.

Chris: And where else can you find the situation where you can effectively double your return on investment? The same level of risk become driven by a tax benefit. As long as you execute well on this strategy, which is not easy to do, you can increase that return on investment significantly without taking on additional risks.

Jimmy: And you’ve got the tax benefit on top in this case as well. Yup. I wanna turn our attention now, Chris, to the article that you published on Medium last month, it was titled, ”Opportunity Zones: The Missing Public Narrative.” You point out a lot of inconsistencies in terms of the mainstream media news coverage of Opportunity Zones. I found it a really interesting piece. I wish everybody would read it honestly. Because a lot of people do just get their news from a couple of major national news sources and they don’t always like the Opportunity Zone program so much. They brand it as a Trump program and they have their own story they wanna tell about it and I think they missed a lot of the key points or ignore a lot of the key points of the story. Maybe you can tell us a little bit more about what you wrote in that piece though. Could you briefly summarize it for us?

Chris: Yeah, absolutely. You know, I don’t blame the news media for being who they are, which is a group of people that needs to generate eyeballs to what makes the story is fallacious as possible. And reporting on a highly complicated tax incentive that affects real estate, it gets pretty boring pretty fast. And so it’s natural that they’re gonna focus on sort of the outliers that make the stories interesting and generate a certain impression to the reader. But it’s those of us who are in the industry, it’s incumbent on us to start going into the details further because people who do have capital gains that wanna avoid paying some tax and wanna take advantage of this program, they’re gonna to be willing to spend time to learn about it. So if I take to, I basically went through five key points.

One of those was coming out of a New York Times article that talks…and “The Wall Street Journal” as well, talking about, you know, despite heady expectations, Opportunity Zone funds are not raising nearly as much capital as they would like. And so I go through a little bit about why that is. Why aren’t we raising as much capital as we would like and how does that change over time? And does that really, was that really a proxy for whether or not this is a good program or not? The main point there, very simple, Opportunity Zones, the law wasn’t essentially final until December. So it’d been two years before we had final regulations.

Well, until you get final regulations, financial advisors and the people that support the majority of high net worth individuals in the country that have these gains are not gonna spend the time educating themselves on how the program works, approving it through their due diligence infrastructure, distributing those approved funds, marketing them, etc. And so we’ve really only had a couple of months now since that had happened that we have a time to actually start marketing to the financial infrastructure. And until you as an investor can go to your advisor and your CPA and say, “What do you think about Opportunity Zones fund” and get an intelligent answer from them, including, “Hey, here’s four funds we’ve already approved that you can invest in,” you’re just not gonna see the same capital flow. I think that’ll change over time.

Opportunity Zones, the second point are interested in investing in projects that would have gotten funded anyway. This is where, you know, the news media has basically trashed a couple, a handful of projects that were, you know, condo towers in Miami that were glass, you know, towers or something like that. Well, I know for a fact that before, while interviewing for that particular article in The Times that there were hundreds of projects presented to them, including at least five of my own, that were perfectly in alignment with the goals of the Opportunity Zone program of economic redevelopment and community development. And they chose to focus on roughly 10 or so projects across the country out of many hundreds that were just getting the benefit because you know, they were building a condo tower.

So I just wanted to make sure that people understood that the ratio between a project like that and a project that’s good and that follows the spirit of the law is significantly higher. Opportunity Zone tax breaks are a result or result of rich and powerful insiders in the Trump White House passing a law to help themselves and their friends. The Trump White House certainly signed the Opportunity Zone law, but the law was originally created by a think tank and then supported by 50 Democrats and 50 Republicans and co-sponsored by a Democrat and Republican. So in essence when you think about the law, it was a bipartisan law from the get-go. It was created entirely outside of the Trump administration.

The Trump administration saw the merits of it and eventually started to tout it as a good law, but that’s not how it was built and that storyline is fundamentally and factually inaccurate. Investors aren’t interested in helping local communities, only themselves. You can see this in the reporting across the board. Yeah, when I talked to investor after investor, one of the first things they asked me about is the impact theme within our fund and how do we track impact and tell us about what we’re doing within the impact side of the fund and the different projects that we’re doing. Explain to me how this is creating economic development and growth. Explain to me how this is helping the community. I have those conversations with investors all the time.

So if that was the truth, then they wouldn’t be asking the question in the first place. And then the lack of clarity in the program is stopping it from moving forward. While it was certainly true that that was the case, that storyline is no longer accurate because as of the end of last year, we now have the clarity that we need. And so you’ll still talk to a CPA or financial advisor today about Opportunity Zones and they’ll say, ”Well yeah, I hear it’s not really fully figured out yet. I’m still kind of just waiting around for someone to let me know that it is.” And I’m here to tell you today that we’ve got it, we know exactly what to do. We know how to invest, we know how to create the tax benefit for the client and we know how to take advantage of the opportunity.

Jimmy: Yeah. Then you know, like I said, I thought it was great article. I’ll be sure to link to it in the show notes for today’s episode, which our listeners can find at opportunitydb.com/podcast. It’s worth a read, although Chris pretty much just recapped it for you, but it’s worth diving into a little bit more. All five points are spot on, Chris. I couldn’t have said it better myself. So thank you. Thank you for writing that piece. It was, it was great to read and I wish more people would read it.

Chris, I wanna talk to you about one more thing before we go today. Opportunity Zone investing is largely created for or largely intended for, you know, wealthy individuals who have large capital gains. Most funds out there are closed off to non-accredited investors. Most funds require that you be an accredited investor even just to receive any information about the fund and certainly if you want to invest in the fund. But Chris, you guys over at Caliber have created an option for non-accredited investors, which I believe just went live or is going live shortly. Can you tell me a little bit more about that?

Chris: Yeah, so you guys are one of the first to know about this. We will make the marketing public towards the end of April, but the offering is actually live and available to invest in if people are interested. Before I tell you about that, I just wanna give you an idea of the Opportunity Zone industry. And so there were about 70 billion in funds announced as of the end of last year, about 7 billion had been raised. Caliber has raised 70 million out of the 7 billion. And if you believe as we believe that Opportunity Zone funds and the program itself will ultimately be found to be a huge benefit to our country and potentially be extended because that’s what we think will happen, then, you know, as a non-accredited investor or maybe somebody who doesn’t have a capital gain, how do you get involved? Well, we certainly can’t bring non-accredited investors into our fund. That’s not how we’re structured. And that’s a securities law issue that exists in our country that will exist for many years to come unless that changes.

But one thing that Caliber did about four years ago is we started building what we call our public company infrastructure. And so the company that owns a proportionate share of the profit of all of our funds as well as owns all the revenues we earn off of our fund management fees or asset management fees or real estate services and all the income streams that come up from that, decided to go down the path of being a public company years and years ago. So we’ve spent millions of dollars and thousands and thousands of hours of preparing for this and the first step in that process is to issue a Reg A+ offering that allows us to raise up to $50 million from all investors, including non-accredited investors, as long as they don’t invest more than 10% of their net worth.

And the offering is to buy stock in Caliber’s global operating company. So and a metaphor to think of here is, you know, the old metaphor in investing. You can either own the gold or you can own the gold mine or you can own the picks and shovels that mine the gold. Well, in this metaphor, Caliber, the operating company does own some real estate. So you do own some gold. You also own the gold mine in the sense that you own the machine that raises capital and that consistently create these funds and deploys them and you own the picks and shovels. So you own the different service lines that we provide to those funds. And one of those being our Opportunity Zone fund.

So if you’re a non-accredited investor and you’re looking to own a percentage of the growth of this industry, one way to do that would be to invest in our stock. To be clear, you’re not investing in Opportunity Zone fund, you’re not getting any tax benefit from making this investment. But the reason why we went down the path of this offering was prior to an institutional listing and an institutional capital raise, which we plan to do after this offering, this gave us a chance to give our tens and tens of thousands of followers and the many hundreds of thousands, if not millions of people out in the world that we think would like to be able to access this type of a growth story, the ability to invest essentially pre-IPO. And so it’s an exciting opportunity for Caliber. I can tell you more whenever you’re ready for me to in terms of how to get access to it, but it’s a way for investors to participate in the growth of this industry and build wealth along the way with us instead of being boxed out just because they don’t fit the accredited industrial guidelines.

Jimmy: Yeah, that’s great. I think it’s great that you offer that as an option for non-accredited investors. And yeah, just to reiterate, you know, you are not owning the Opportunity Zone fund directly and there’s no tax benefit associated with it, but you can invest regular dollars into it, I guess is what you’re saying. It doesn’t have to be capital gains dollars because of that and you get access to the entire machinery and service lines behind what drives the Opportunity Zone fund in the first place?

Chris: As long as you have a minimum of 2,000 to invest. It can be IRA, non-IRA regular fund.

Jimmy: That’s great. Good stuff there, Chris. Well, Chris, it was great talking with you today. Thanks again for the article. Thanks for the conversation. Thanks for your thoughts on the coronavirus pandemic and how you think it will affect Opportunity Zones. I think you’ve given a lot of information for our listeners to think about. And before we go today though, Chris, can you tell our listeners where they can go to learn more about you and Caliber and that non-accredited investor offering you have?

Chris: Yeah. So two different websites for you. If you want information on the non-accredited investor option, just go to investcaliber.com, investcaliber.com. And if you’re interested in the Opportunity Zone fund directly, you can go to caliberfunds.co, caliberfunds.co. Last but not least, if you just wanna get to know the company, our main website is caliberco.com. And in all cases you can reach us and you can reach me directly just by putting in a contact form. It’ll filter to me very quickly. I’m very active in talking with investors and spending time with our clients because I believe that a well-educated client that understands our business will typically invest and have a great experience. And so I like to spend a lot of time on the front end with our people.

Jimmy: Excellent. I think that’s very important. And for our listeners out there today, I’ll have show notes on the Opportunity Zones Database website for this episode. You can find those show notes at opportunitydb.com/podcast, and there you will find links to all of the resources that Chris and I discussed on today’s show. I’ll be sure to link to Chris’s article on Medium, which we discussed as well as the websites that Chris just listed on how you can learn more about both offerings that he has. Chris, again, thanks for joining me today. It’s been great.

Chris: Thank you very much.