Ground-Up Opportunity Zone Hotel Investing Strategy, With Michael Ealy

Acquiring distressed hotel properties during the peak of the pandemic has proved profitable for value-add investors. The next opportunity may lie in ground-up hotel development deals.

Michael Ealy, CEO of Nassau Investments, joins the show to explain how he used real estate investments to go “From Broke to Millions,” and why he’s now spearheading a new ground-up hotel project in an Opportunity Zone in Sarasota, FL.

Episode Highlights

  • A high-level review of how the Opportunity Zone tax incentive works for investors in Qualified Opportunity Funds.
  • Mike’s background and how he used real estate to go “From Broke to Millions.”
  • Mike’s value-add strategy for non-OZ hotel assets.
  • Details on SOTA, a new ground-up hotel deal in an Opportunity Zone in Sarasota, FL.
  • How interest rate hikes have posed a challenge for real estate investors in 2023.

Guest: Michael Ealy, Nassau Investments

About The Opportunity Zones Podcast

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

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Show Transcript

Jimmy: Welcome to the “Opportunity Zones Podcast.” I’m Jimmy Atkinson. Today, I’m joined by Michael Ealy, president of Nassau Investments. Mike, it’s great to see you. Great to meet you today. Thanks for hopping on with me. How are you?

Mike: I’m great, Jimmy. Thanks for having me, brother. It’s great to be here, man.

Jimmy: Absolutely, Mike. Great to have you here. Always good to meet somebody else in the land of Opportunity Zones, doing some Opportunity Zone development deals. You’re a new contact of mine. I’m literally just meeting you today for the first time, as of a few minutes ago. Some of my audience might be familiar with you, and Nassau Investments, and some of the projects that you have underway. But for those of us in our audience of high-net-worth investors, family offices, advisors, everybody plugged into the OpportunityDb network who may be unfamiliar with you, Mike, can you give us a little background on who you are, where you came from, your background, and Nassau Investments.

Mike: Yeah. So, Mike Healy out of Cincinnati. We’ve done over $300 million in assets, inclusive of apartments, hotels, warehouse, land. And now we’re working on this deal in Sarasota, which is a ground-up construction, over $120 million, which is in a Opportunity Zone. And it’s funny. Lately, a lot of projects that I’ve had are in these Opportunity Zones. So, we’re just leveraging those. But, for me, it wasn’t always like that. When I first started in real estate, I failed miserably. But I like to say failure is nothing but a pile of mistakes that we stand on, and through those mistakes, I learned the, what things not to do, as so many people say, “Did you fail a lot?” And, I just said, “No, I really just found 10,000 ways of how not to do it. And so, we’re working on this wonderful project down in Sarasota, and then we potentially have another one with land we have here in Uptown Cincinnati, where we can do some affordable housing as well.

Jimmy: Very good. You learn on the job by doing, right? You gotta get your 10,000 hours under your belt. There’s only so much you can learn from reading a bunch of books.

Mike: Yeah, sometimes I wish we could avoid the 10,000 hours.

Jimmy: It’s unavoidable. In my experience, that’s what I’ve come to learn, at least. The books can teach you a lot. Videos can teach you a lot, but you gotta just learn by doing sometimes. So, Mike, I wanna talk with you about your Opportunity Zone strategy, what you’re doing in Sarasota, Florida, in particular. But first, I just wanted to kind of recap…

Mike: Yeah, please.

Jimmy: …what Opportunity Zones are, for my audience.

Mike: I know, because everybody would really like to learn about these OZs, and what that’s really about.

Jimmy: Exactly. So, and for your audience as well, Mike, who may be unfamiliar with Opportunity Zones, essentially, it’s a tax incentive, a federal tax incentive that was created at the end of 2017. It’s a place-based incentive, so, there are over 8700 Opportunity Zones, all over the country, set at the census tract level. And if you invest into one or more Opportunity Zone locations, as long as you go through a Qualified Opportunity Fund that complies with the legislation and some of the IRS regulations, as an investor who rolls over a capital gain that you may have triggered from the sale of real estate, sale of stock, sale of privately-held business, any type of capital gain, take that capital gain within 180 days, roll it over into a Qualified Opportunity Fund, you get the following benefits. One, you get to defer recognition of that capital gain until December 31 of 2026, essentially an interest-free loan from Uncle Sam. So, no tax bill due until April 15th of 2027. You’ll sometimes hear people refer to the ’26 date, or sometimes to the ’27 date, when the actual tax bill is due, right? Secondly, you get to, as long as you hold that Qualified Opportunity Fund investment, that invests in assets within these 8700-plus Opportunity Zones all over the country, as long as you hold it for at least 10 years, you get to exit that investment completely tax-free. So, if you have a $1 million gain…

Mike: Can you say that again?

Jimmy: Completely tax-free, Mike. Isn’t it great? I think it’s the greatest tax incentive ever created. It’s essentially a unlimited tax-free growth investment vehicle. It’s akin to a Super Roth IRA. So, I’ll give you an example. If you invest $1 million into an Opportunity Zone Fund, let’s say it 2.5X’s over 10 years.

Mike: Right.

Jimmy: So, you come out with $2.5 million, right? That’s a $1.5 million capital gain that you would normally owe…

Mike: Yeah. That’s right.

Jimmy: …a whole bunch of money to Uncle Sam, right?

Yeah. Yeah. What is that, 30% 45%?

Jimmy: It’s yeah, yeah. Something somewhere in that range, it could be.

Mike: Well, that depends on what it is, like, yeah, but still.

Jimmy: Could depend on your state rate as well. Many of the states around the country also comply with the program, right. But you can avoid yourself six-figure tax bill, at least, in this example.

Mike: That’s right. Absolutely.

Jimmy: By the way, one bonus that also gets passed along to investors is that if it’s a real estate project in particular, and the real estate project takes depreciation, normally, at the end of a holding period, after you’ve taken depreciation for 10-plus years on any sort of real estate investment, the IRS will tax you on depreciation recapture.

Mike: That’s right. That recapture.

Jimmy: Like, all that depreciation you took, eventually, that tax bill comes home to roost. With an Opportunity Zone investment, however, there is no depreciation recaptures. You can take that depreciation all along the way, and in fact, right now, under the Tax Cuts and Jobs Act, there’s some bonus depreciation.

Mike: Oh, my gosh.

Jimmy: We won’t get into the specifics of that. But you can depreciate, you essentially depreciate that asset on a accelerated schedule, and really reduce [crosstalk 00:06:33]

Mike: That’s, I was just gonna say that. Like, can you just imagine you do a cost seg, you accelerate it…

Jimmy: Yep.

Mike: …and you take it at 5, 7… Oh, my gosh. This is beautiful.

Jimmy: It is. It absolutely is. So, we did an episode on cost segregation, bonus accelerated depreciation. I did that with the folks over at Plante Moran, Jeremy Sompels and Valerie Grunduski, a little while back. I think it was, I don’t know, at least 6 or 12 months ago. I’ll link to it in the show notes for this episode. We won’t get into the details there, but suffice it to say, it can really help reduce your tax bill even further, and there’s no depreciation recapture when you do go to sell. If you’re a real estate investor, you probably have heard that term, “depreciation recapture,” before, but if it’s new to you, just suffice it to say, it’s yet another huge bonus savings on your taxes. So, Mike, that’s a little bit about Opportunity Zones. I told you I’d give you my 60-second elevator pitch. I think it was probably more like four or five minutes, [crosstalk 00:07:27] but…

Mike: [crosstalk 00:07:28] One more. Why do you think people… And I know [inaudible 00:07:34] you’re supposed to be interviewing me, but…

Jimmy: That’s all right.

Mike: …why do you think they like this over a 1031? Like, well, what’s better, or what’s, you know, what are some of the benefits versus the 1031, versus the Opportunity Zone?

Jimmy: Well, there’s a lot of similarities, obviously. There’s, it’s, both are great capital gains deferral mechanisms, but there’s a couple of key differences. One is, and this actually is in favor of the 1031 exchange, so I’ll kind of do the reverse answer to your question. The 1031 exchange, in some ways, is more flexible, because it’s not place-based. You can invest anywhere. You’re not locked into these 8700-plus census tracts. Whereas an Opportunity Zone, you have to invest in one of these locations, right? Okay. So, that’s one of the downsides. But the benefits are, of, to capture the full benefit of the 1031 exchange, you have to wait until you die. Essentially, the full benefit is for your heirs. Upon death is when your investment gets stepped up to fair market value, right? With an Opportunity Zone investment, you don’t have to pass away. You just have to wait that 10-year period.

Mike: That’s right.

Jimmy: So, that’s one huge benefit.

Mike: [inaudible 00:08:51]

Jimmy: Another benefit is, frankly, it’s just a little bit easier to do, especially if you just wanna be a passive LP investor. You just accrue your gain, and then you write a check to a Qualified Opportunity Fund manager, and you really don’t have to think about much for the next 10-plus years. There’s one additional form you have to file with your tax return. Just pass it on to your CPA. They’ll handle that. Whereas with a 1031, you have to jump through some hoops. You have to work with a qualified intermediary. You have to… There’s a certain time frame for identifying, you know, one or two or three different properties. The transaction up front is a little bit clunkier, and more burdensome, I think, for the investor. By the way, another key difference is, and this one is really important to understand, a Qualified Opportunity Fund investment has a special place along the risk-return spectrum. It is a riskier type of investment, that is going to typically produce, or expect to produce, a higher return. And what do I mean by that? Well, in order to be an Opportunity Zone Fund, in order to be a qualifying investment, it has to be either substantial improvement, so, very heavy value-add, or ground-up construction, and that does just incur more risk. A 1031 exchange, typically, you’re exchanging into a property that may not need as much work. Maybe it’s already cash-flowing. Right? So, that’s another distinct difference there.

Mike: Big difference. Yep. Uh-huh. Oh, that’s perfect.

Jimmy: So, Mike, I’m curious, and we’ve gone through kind of the pros and cons of OZs, we’ve gone through the basics. What drew you to Opportunity Zones in the first place?

Mike: No, I mean, quite frankly, the word says it all. It was the opportunity. But, let’s say, the key thing is I provide a service. Yes, I love real estate. I love deals. But overall, I’m providing a service. I’m helping investors get to their investment destination, you know. And it just so, and, you know, I act as a bridge, and it just so happens that I have multiple vehicles. And that’s, like, coaching, apartments, and hotels. And so, we saw an asset that would be beneficial for our investors, or any particular investors. I mean, it’s in the Sun Belt, that it takes up, you know, where 50% of the population is, down in the Sun Belt. It’s growing. It’s a very strong market. It’s a destination area. And they provide, you know, high returns. And so, we saw this project, said, “Let’s go for it.” And, but one of the things in our due diligence we found out was the Opportunity Zone. And all these things that you shared, I mean, people will hold it. We’ll do cost seg, we’ll do accelerated. And these people can stay in these deals. This is an asset, we’ll call a trophy asset, that you really don’t wanna sell. So, this would be an ideal property, where people can wipe out that capital gains, hold a Class A asset, in prime downtown Sarasota, which, this project, you know, you can see the bay, where, soon as you walk out, you’re literally in the life of downtown Sarasota, with the restaurants and pedestrians and business.

And so, you know, that’s why we want it. And, you know, it’s great returns. And so, we really felt that this, and not only that, it’s a transformation project for Sarasota. Literally, it’ll be a connector for continuing downtown to further out of that neighborhood. So, you know, I just really, really believed in this project, and I knew it would be great returns. And it’s, you know, it’s kind of hard to do. I know may pushing it a little bit, but it reminds me of owning sports teams, right? You remember when, like, sports teams get in, and, you know, they bought the sports team for $100 million, $200 million, and now it’s worth a billion dollars-plus? Now, I’m not saying this hotel and building’s gonna be… But I see projections like that for a project, because of the area and the growth, and how Sarasota’s grown, and how people are flocking to the Florida area.

Jimmy: It sounds, you make it sound incredible. I wanna dig in there a little bit more in a minute. Hoping we can kind of back up, zoom out a little bit. I wanna hear a little bit more about Nassau investments, and in particular, what’s your overall investment thesis? What’s your strategy? Where are you building? You have a portfolio of hotels already. Can you tell our audience what you’ve already developed, or what’s in the works? Give us a little sneak peek at your portfolio of hotels already.

Mike: Yeah. So, we, you know, I bought some hotels during COVID. So, overall, I’m a value-add guy. You know, because, look, I shared earlier that I fail, and that’s because I was over-leveraged. I paid, kind of, at retail. And I was in a area where we didn’t have high appreciation. In Ohio, it’s kind of the last place everybody goes. Like Mark Twain always said, “Look, when the world ends, I’m moving to Ohio, because I already know what’s gonna happen there,” right? And so, I liked, you know…because I like to get deals where we can create value, right? I don’t wanna get a marginal deal, because that’s what hurt me back, you know, 20 years ago. And so, no matter what I wanna do, we want a forced appreciation, whether that’s pushing rents up, or creating more revenue for the hotel, and if we can do some construction, to push the values up, that’s what we wanna do. I’m not the guy that wants to get into a turnkey vehicle asset and hope that it appreciates over time. And because, you know, like, California, New York, those places can do that, but you got low margins, and then if we go through a market shift, where they get crushed…

Well, when I do deals, we go through a market shift, yeah, I’m upset, but I’m not mad because we had so much loan-to-value, like, you know, let’s say a small deal of, you know, $10 million, and, you know, we bought it for $6 million, $7 million. And so, when the market changed, you know, if we can’t get $10 million, I think we’re gonna be okay at $8 million. You know, so that’s why we like to do deals like this, with a lot of margins, or where we can create it. And so, I’ve done that through multi-families, of, where we did numerous deals where we would buy kind of low-income areas, and literally, we come revamped. And I will say we were able to catch the wave. Like, when a lot of people were losing things during the Great Recession, I started buying. And we watched the wave. We saw rents literally jump from $300 in the last, you know, those five, six years, to $900 to $1000. And so, that’s how we won. And, you know, we were in these for, you know, I mean, I know these are crazy numbers, but literally, we were buying stuff for $4000, $13,000 $20,000, you know, $20,000 a door, being all in for $25,000, and then selling for $60,000 and $70,000 a door. So, we had a lot of great wins. And so, we wanted to accelerate, and that’s how we got into hotels, and we’re kind of coming through at the end of our first cycle of these set of hotels as well.

Jimmy: No, that’s great. You bought at the bottom of the market, those residential doors, probably, what, you were buying those in probably ’09 or ’10?

Mike: Absolute… So, I’ve always been buying single-families.

Jimmy: Got it. Okay.

Mike: But then, it was fortunate. There was a company here. They were called The Model Group, which is now, I forgot, Bricks… Bricks something. But they had the, one of the largest portfolios of low-income housing. So, I ended up working with them as a Realtor/broker, and I got to see the back of the office, back of the house. And I saw all the developments they were doing. I saw how they did the low-income tax credits. And, from them, they gave me a opportunity. They gave me my first 28-unit deal, that was a low-income tax credit. And I knocked it out of the park, and that was the beginning of me kind of being these low-income areas, and learning how to manage.

Jimmy: So, you bought at the bottom. That’s good context. And you bought at the bottom of the market, those single-families, and then, fast-forward 10 years later, you see what’s going on with hotels. Hotels are getting killed, because they have to shut down during COVID. Is that when you started buying up hotels, about 2020, or ’21?

Mike: Yeah. So, yeah, [inaudible 00:18:22] I think Courtyard was the first one.

Jimmy: Okay.

Mike: And, you know, I said, I had this goal, I was gonna buy a whole bunch, but we ended up only buying four. I like to create BHAGs, Big, Hairy, Audacious Goals.

Jimmy: Sure.

Mike: And we said, “We’re gonna buy 100 units, 100 hotels,” and we only got 4. So, I don’t know if that was a failure, but I like that failure.

Jimmy: Hey, four is better than zero.

Mike: I can live with…

Jimmy: You [crosstalk 00:18:47] something, right?

Mike: And so, when we got that, I will say, going through that cycle, I really, really like extended-stay hotels. That kind of matches my personality. It matches my thought process, because, you know, extended-stay is basically apartment that you can rent, just a smaller footprint. And, man, I’ve learned, really understood the sales on how to put heads in the beds, and connecting with a lot of economic drivers in the neighborhood. And so, because of that, we’ve been able to really, you know, create a lot of revenue and occupancy for those deals. And so, you know, we’re starting to get offers, unsolicited. So, I’m like, “You know what? Let’s have at.” [crosstalk 00:19:40]

Jimmy: You’re doing something right, it sounds like. So, as you buy, couple good things you’re doing. You’re buying at the bottom of the market for these different sectors, and then you’re also, I guess you’re buying assets that are a little bit worn, need a little bit of work, so you’re cleaning them up, maybe a fresh coat of paint, new carpets, the like, and then you’re able to increase the rent, or the daily rate, in the case of the hotels.

Mike: Absolutely.

Jimmy: Is that pretty much it? Is that the gist of it?

Mike: Yeah. Nothing different than buying an apartment. I mean, an apartment, you wanna push the rents up. Well, how you gonna do it? You gonna renovate it. You’re gonna put new carpet, flooring, kitchen. With hotels, same thing. Now, fortunately, if not, you may be doing a heavy lift or a light lift, because they have what they call soft goods and the hard goods, right? So, soft goods, when you gotta do a PIP, a renovation property improvement, that’s typically when you’re just replacing the blinds, the shades, the lining, carpet, things like that. But if you got the harder one, the bigger one, that’s when you’re going to [inaudible 00:20:41] like headboards, desk, chairs, things like that. So, you know, ideally, if, when we get into another deal besides Sarasota, you know, I would like to do soft renovations. I think that’s okay. I did a very labor-intensive one with the Courtyard. We got it done. I won’t say it was fun. But it’s done, and, yeah, I kind of like those lighter lifts.

Jimmy: Sure. Who doesn’t, right?

Mike: Yeah.

Jimmy: Well, then, now, Sarasota, though, that’s a different beast, because this is not a value-add strategy. This is a ground-up construction.

Mike: Absolutely.

Jimmy: This is a little bit of a new type of project for you, if I’m not mistaken. You touched on why you like this project, why you like the location in Sarasota. What more can you tell us about it, and how different is it doing ground-up construction versus value-add?

Mike: You know, ground-up construction is much more challenging. It’s a financial commitment. It’s a time commitment. I mean, you know, before you even break ground, we potentially have, I don’t know two, three years of pre-construction, for a project of this size. I think if we start looking at this project in ’20, you know, 2020, ’21, somewhere around there, I didn’t close on the land till ’22. And then we bought…we closed on our entitlements, finalized that, in spring of ’23. Like, kind of at the end of January ’22, and in 2023. So, you know, it is time-consuming. And it’s a lot of parties. It’s a lot of pieces that go with this. But we have an amazing team. I got my partner, Rodrigo. He’s from Bolivia. He’s developed over 18 towers in Bolivia. And he moved to the States and we got together. We got Cass Construction, which is one of the largest construction companies down in Florida, like, over 8000 apartment units and hotel keys each. We got Hoyt Architects, and Andre Kikoski, out of New York, who did the…what is that? I forgot the…The Crossings out there. So, really, really high-level, really skilled teams, like, and, you know, this is gonna change the way people do luxury living in Sarasota. I mean, it is truly a transformation. Every space was created to fulfill people’s desires. Like I said, like, this is a piece of opulence. And it’s gonna be an amazing project. And we’ve been selling condos. We already sold six of them, and now we’re going into our main season. So, you know, we can look at potentially breaking ground. We could be ready to break ground here in March, April. But I think we’re gonna wait just a little bit for more sales, and interest rates are gonna be dropping as well, so we wanna take advantage of that as well, so…

Jimmy: Sure. Well, you mentioned interest rates. That leads me to my next question, which is, what have been some of the biggest challenges of raising capital for this investment, for actually getting it started, and has the current interest rate climate caused you to pump the brakes at all? We had an unprecedented rise in interest rates over the last 18 months. How has that impacted you guys?

Mike: You know, so, when we first started, you know, it was before all this, like, interest rates were, like, 4%, even 2%. So, when we started the project…

Jimmy: Yeah. I remember.

Mike: Yeah. Not a problem.

Jimmy: Not a problem at all.

Mike: But, then, you know, I started noticing… It was in ’23. We’re just kind of looking around. I saw equity groups just literally jump up, like, I had people like, “Okay, I’ll give you some money.” And, but, you know, instead of that 8%, 9%, you know, they jumped to 12% and 13%, and I was like, “Whoa, what are you doing?” Said, “Okay, I can do that up here, or as mezz or something.” And, you know, those are ways to work it, but… And we had such great margins on the deal, it can work, if we have to. But, you know, that’s one of the things where we, like, “You know what? Let’s kind of pump the brakes in.” And the reason for that is, we pump the brakes, like, we continue and wait for the rates to drop. Now, I don’t think we’re gonna get a substantial drop, but we’ll get a nice drop. And two things happens there. One, we…and by waiting for rates to drop, instead of spending that on interest, that comes back to us. So that’s more profit. And then on top of that, we have condo, we’ll have more condo sales, and because of our condo sales, that goes in deposits, and in Florida, we’re allowed to leverage those deposits to do the construction. So, guess what? Instead of going out and raising more capital, I wouldn’t necessarily call it free, but we got capital that we don’t have to pay interest on, right? We don’t have to, capital that we have to pay debt on. So that makes that project even more profitable. So, you know, those are kind of the things that we’re working on, and to really have success in this project.

Jimmy: That’s interesting. [inaudible 00:26:37] been mentioning the condos. What’s the breakdown for this hotel? Some of it’s permanent residences, condos. It’s park condo, part hotel tower. Is that right? What’s the breakdown, though?

Mike: Yeah. So, we got, let’s see, 35 condos, a 120-key hotel, 4500 square feet of retail. We’re gonna have a high-end luxury kitchen, with a branded chef, and a parking garage right in the midst of that. So, [inaudible 00:27:09] three sections of this. So, you have the condo component… Well, start off, the retail, garage in the middle, hotel here, and then condo on top.

Jimmy: All right. Awesome. Well, if you’re watching us on YouTube, you can see that next to Michael, he’s got, framed, “From Broke to Millions.” Michael, you’re the author of that book, “From Broke to Millions.” Can you tell me and my audience a little bit about it, and where we can go to get the book?

Mike: Yeah. So, you can get the book. You go to frombroketomillions.com. But literally, I detail my story, how I went from broke to millions. I started off with a two-family, and literally, I didn’t have any money. I had bad credit. And I learned these techniques on how to do no-money-down deals, and I bought that, and I was living rent-free. Now, people today call that “house hacking.” So, back then, I’d just say, “I’m living free.” And so, from there, I started acquiring more real estate. But I was using these techniques where I over-leveraged, so I lost everything, like, three years later. Literally, everything was in foreclosure. And then but, my God sister, I never forget. I was ashamed, I was embarrassed, but she showed me these techniques where I could do short sales. And from that, when I lost everything, as, a detail of the story, I’d become homeless, but I then used these same techniques to help build my wealth to over a million dollars in, like, five years or less.

So, literally, I went from homeless to millions. And I share with people how I was able to do that, how I’ve raised money. How did…the good in the deal, the bad in the deal. How to raise capital. How to analyze the deal. And we really educate people, because what I really want people to do is find success in whatever they do. You know, because when I started, they really wasn’t any groups. There wasn’t podcasts like this. The only way you got on a show is if you paid a lot of money, or you got on a major production. And nobody can hear everybody’s voice, and everybody has, truly has a story to share, that can uplift somebody and take them to another level. And so, I just wanted a way that I could share information with people so that they could grow, and that they can obtain just a dream, whether they want to acquire 2 units or 1000 units, I wanted them to know that it was possible for them.

Jimmy: So, who’s the book for? Who should get it, and how can they get it?

Mike: Yeah. So, go to frombroketomillions.com. Whether you’re a beginner or experienced, whether you want 2 units to live free or 1000 units, this book is for you, and it will help you take you to the next level. Multiple people that read this book, I got one of my students, Tim Vest, I mean, literally he went from the C-Suite, he left his job… We have multiple people leave their job, matter of fact. He left his job. He was not doing well in other projects. We shared him these systems, and now he owns over 1500 units. He did that in three years. We had a…what was she? A anesthesiologist, Riverbank. She left her job, is doing deals from Alaska to all over. We got people in Canada. Literally, he went through a divorce, lost everything. Now he’s got over 600 units. So, you know, we’re helping people all over, from not just in the U.S., but in other countries as well.

Jimmy: Awesome. That’s inspiring, Mike. And congrats on the book. And yeah, please do head over to frombroketomillions.com to learn more and to get your copy if you’re interested. Mike, just curious, we’ve been talking about Opportunity Zones throughout the course of today’s episode. Just wanted to step back and ask you a really high-level question. What broader trends do you have your eye on with regards to Opportunity Zones, or in particular, Opportunity Zone development deals?

Mike: Yeah, I’m just really sitting back. It’s just, I wish I could say I had this big thing about OZs [inaudible 00:31:32] and I really didn’t, it just something that kind of fell on my lap. It was just opportunity. I just happened to acquire the right pieces of property, and not even looking for it. Like, I just knew these areas were areas that was gonna be redeveloped. And so, I bought it. You know, people were losing some of their profits, so I bought it. And now, in those areas, like the one in Uptown, they’re redeveloping that whole strip. Like, the university and the hospital are putting literally a billion dollars on this street, of development. And I’m right next to it. And I’m like, “Well, why not?” But I was like, “Hey, how can we really benefit, where everybody wins?” And they say, “Hey, if you do some affordable housing, we’ll give you some grant money.” I was like, “Well, that makes it pretty fun.” And then, “We’ll also help you with a line of credit, because we need affordable housing.” And then they said, “And by the way, we’re in an Opportunity Zone.” And I was like, “Well, what else is there to go?” So, people can…we’re helping people, we’re putting people in homes, we’re getting enough subsidies to help, and then, and investors benefit all the way. Like, now, that’s a service that I love doing. And we’ll be doing the same thing in Sarasota. I mean, we’d leverage this Opportunity Zone, multiple people will be employed, investors are winning, and we’re creating multiple stories that help not just transform financially and architecturally, but spiritually, and for families and people in the community.

Jimmy: That’s great, Mike. I agree. Opportunity Zones doing a lot of great work, and one other thing you pointed out that I kind of caught on to was it’s possible to stack a lot of different types of equity and tax credit and subsidies within Opportunity Zones oftentimes. So, if you’re a developer, or you’re a fund manager, and you’re trying to get something done with Opportunity Zones, you know, also look at those other different types of subsidies, affordable housing, or historic tax credits, or local tax abatements, local subsidies, different types of grants. There’s all sorts of ways to get your projects capitalized.

Mike: I don’t think you missed anything yet, man.

Jimmy: Absolutely. Absolutely. Mike, this has been great. Really appreciate you joining me today. If any member of our audience, high-net-worth investors or advisors, want to get in touch with you, to learn more about your Sarasota project or anything else you got going on at Nassau Investments, where can they go to learn more?

Mike: Yeah. You can go to Nassau Invest. That’s www.N-A-S-S-A-U, invests, I-N-V-E-S-T-S.com. You can go there. Or, you can just [inaudible 00:34:38] go to LinkedIn. You can go to LinkedIn, and find me there as well, Mike Ealy, or it’s under Michael Ealy, under LinkedIn. I’m out of Cincinnati, Ohio, and, but there’s my website as well, posted there. So, if you’re interested in joining our investment group, hey, just click on the link and sign into the portal. Or if you just wanna get some education, we got plenty of training, whether wanna be a active or passive investor, we’re here to assist you, just like Jimmy, you are, as well. I mean, this is amazing program that you have, and sharing all about these Opportunity Zones. So, I thank you and applaud you for everything that you’ve been doing.

Jimmy: Awesome. Thanks for the kind words, and thank you, Mike, for joining us today. As always, we’ll have show notes for today’s episode. If you wanna view those show notes, we’ll have links to all of the resources that Mike and I discussed on today’s show. Just head on over to opportunitydb.com/podcast, and please be sure to subscribe to us on YouTube, or your favorite podcast listening app, to always get the latest episodes. Mike, again, it’s been a pleasure. Thanks so much for joining me today.

Mike: Thank you so much. Peace.

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OZ Pitch Day

March 7, 2024