OZ Pitch Day - June 13, 2024
Opportunity Zones In 2024
Opportunity Zones have greatly exceeded initial expectations as we enter Year 6 of the tax incentive program.
To kick off the new year, OpportunityDb founder Jimmy Atkinson recaps the current state of the Opportunity Zone marketplace, and what may lie in store for the Opportunity Zone industry in 2024.
Episode Highlights
- A brief recap of Opportunity Zones, from inception thru year-end 2023.
- Why 2023 was a down year for Opportunity Zone equity raising, and how the industry may be poised for a turnaround year in 2024.
- Some of our favorite resources for Opportunity Zone investors, including the OpportunityDb QOF Directory, OZ Pitch Day, and OZ Insiders.
- How to invest in Opportunity Zones in 2024.
- Key dates for Opportunity Zone investors in 2024.
Featured On This Episode
- 2023 Year in Review Key Capital Markets Trends (S&P Global Market Intelligence)
- Commercial Real Estate Investment Volume Continues to Fall (CBRE)
- Novogradac Survey Data (OpportunityDb)
- New House Bill Would Extend and Improve Opportunity Zones (OpportunityDb)
- Directory of Qualified Opportunity Funds (OpportunityDb)
- OZ Pitch Day
- OZ Insiders
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
Welcome to the “Opportunity Zones Podcast.” I’m Jimmy Atkinson, and in today’s episode, I wanna give you my thoughts on the state of the Opportunity Zones industry and marketplace, as we start the new year, 2024. Plus, I’ll present a recording of an OZ Insiders webinar that I hosted on January 4th, titled “How to Invest in Opportunity Zones in 2024.”
First, let’s dive into the state of Opportunity Zones, as we begin the new year. A quick recap of Opportunity Zones, now, for anybody new, or anybody who could use a refresher, 2024 will mark year six for Opportunity Zones. That’s right, year six. OZs came into law as part of the 2017 Tax Cuts and Jobs Act. Now, investment didn’t really begin until the following July, of 2018. That’s when the map of Opportunity Zones was finalized by the Treasury Department. So, OZs turned 6 years old this summer. Fast-forward a few years, we got the final regulations from IRS, about four years ago, so we now have a much more mature marketplace. There’s hundreds of funds that are raising capital for Opportunity Zones, a lot of money has poured into the program already, and we’re finally seeing the fruits of this tax incentive. Buildings are going online, businesses are actually up and running, and it’s no longer just a bunch of numbers on a page, or a pro forma or pitch deck, with crazy projections. Stuff is actually getting built. Stuff is actually happening.
But, Opportunity Zones, it is a perishable tax incentive. The expiration is going to start, or the sun-setting, will start at the end of 2026. In order to be eligible for the full tax benefit of Opportunity Zones, you actually needed to invest in Opportunity Zones prior to the end of 2019. Some provisions have expired already. The biggest provision, the exclusion of capital gains taxation on the back end, after a 10-year hold, plus the elimination of depreciation recapture, still very much alive for any new investments that occur for gains that are triggered before the end of 2026, as long as they’re rolled over into a Qualified Opportunity Fund within 180 days of gain recognition. So, now we, you know, with recognition required by the end of 2026, we really have less than three years to go. You have less than three years to trigger a gain, in order for it to be qualified as a Qualified Opportunity Fund investment.
Now, of course, I mentioned a minute ago, in order to get the full tax benefit, you need to have been invested before the end of 2019. There was a 15% basis step-up that expired at the end of that year. At the end of 2021, a 10% basis step-up expired. But for years 2022 through the end of 2026, actually into 2027, you still have access to the biggest and best tax incentive that there is, which is no capital gains taxation on the subsequent Opportunity Zone investment, so long as you hold the investment for at least 10 years. Also in 2023, we did get extension and reform legislation reintroduced. That happened in September 2023, in the House. I’m gonna touch on that in just a moment.
Overall, looking at the entirety of the program, since inception, Opportunity Zones, in my mind, and in the minds of many others, have been far more successful than anyone had initially predicted. Now, the Treasury Department, when the program was first being rolled out, projected that it would become a $100 billion program. I think I can confidently say now that well over $100 billion in equity has already been raised so far. Some projections put it closer to $150 billion, but somewhere in that $100 billion to $150 billion range, I believe, is where we are in terms of the amount of equity that’s been raised by Qualified Opportunity Funds so far. It’s by far, I think, the greatest tax incentive ever created, but it’s also, by far, the largest economic development program in U.S. history.
By the way, if any of this is going over your head, if you’re new to Opportunity Zones, if you haven’t listened to a lot of my podcasts, or maybe this is the first time you’re listening to any of my podcasts, or watching any of my podcasts, you’d like to learn more, we have free resources available on our website, at opportunitydb.com, the Opportunity Zones database. We have our free beginner’s guide. If you’d like to download that, just head on over to opportunitydb.com/download.
Getting back to equity-raising volume. Good news is, as a whole, the program has surpassed all expectations to date. Bad news is, 2023 was a pretty down year, by any measurement. Not nearly as strong as 2021 or 2022. The economy was in a little bit of turmoil. We had high recession. We had interest rates going way up. M&A transaction volume was sharply down. According to S&P Global Insights, total M&A transaction volume was down 32% year over year. Real estate transaction volume was even worse. It was also down very sharply. According to CBRE, U.S. commercial real estate investment volume fell by 54% year over year, and as a result, there were just far fewer capital gains realized for Opportunity Zone investment. According to Novogradac… Novogradac compiles data on OZ equity-raising, on a rolling basis, and they present the data every quarter. Quarter four, Q4 data for 2023 is not yet available, but if you compare the first three quarters of 2022 to the same period in 2023, the first three quarters of both those years, equity-raising by Opportunity Zone Funds was down 62% year over year. It frankly just wasn’t a great year for OZ equity-raising.
Now, there is some good news on the horizon. The S&P 500 was up nearly 25% in 2023, at end of the year, just a fraction of a percentage point away from an all-time high. Basically, the stock market was way up last year. I believe, now more than ever before, Opportunity Zones are a very attractive option for stock market investors with highly appreciated equity portfolios. Look, if your stock market portfolio was way up over the last year, you may be overweight in stocks. This is the same story I telling a couple years ago, by the way, after the COVID-19 recovery. I’m telling the same story again here at the beginning of 2024. It’s just a bit of a different time, but the fact of the matter remains, if you haven’t rebalanced your stock portfolio in some time, now might be a very good opportunity for you to rebalance. You’re probably overweight in stocks. Take some chips off the table, and I think Opportunity Zones present a really compelling option for that stock market investor with highly-appreciated, low-basis stock gains. And, unlike, real estate investors, who could do a 1031, stock market investors don’t really have that option. I think Opportunity Zones make a great landing spot for stock, for certain stock market investors.
The other good piece of good news is the economy appears to have not crashed into a recession in 2023, which went against a lot of pundits, including myself. I thought we would probably be in a recession by now, but looks like, at least at the moment, we’ve avoided one. Interest rates are likely to come down later this year, which could also drive additional transaction volume in real estate. We may see that transaction volume in the real estate industry pick up considerably in 2024 and beyond, if rates are to come down a little bit. All of this to say, I think 2024 is a really pivotal year for Opportunity Zones. There are gains out there, and the realization of those gains, I think, should be on the way, in much greater volume than what we saw in 2023.
Now, a few minutes ago, I mentioned Opportunity Zone reform legislation. Want to briefly touch on that. The Opportunity Zones Improvement, Transparency, and Extension Act would extend Opportunity Zone tax policy by an additional two years, essentially pushing back that deferral date, or that deadline, from year-end 2026 to year-end 2028. Now, unfortunately, it’s been introduced in the Congress a couple of times now. It hasn’t passed yet. We’ve gotten through the end of 2023, and 2024, being a presidential election year, I don’t think it’s likely to happen that this legislation’s gonna get packaged into a big tax extension bill anytime in 2024. I hope I’m wrong. I hope it gets passed the minute I press go on this podcast, or maybe something will happen in a lame duck session of Congress. But I think what’s much more realistic is that this comes together at some point in 2025. That could be disappointing to a lot of you out there. It’s disappointing to me as well. Fact of the matter is, Congress has bigger agenda items on hand than Opportunity Zones, and even then, just general tax legislation, apparently. But the groundwork, at least, has been laid by Congress, in the form of this bill, and now the industry really just needs a tax legislation bill to become the vehicle for it, so it gets pushed through.
Much of the Tax Cuts and Jobs Act that President Donald Trump signed into law at the end of 2017 is actually expiring at the end of 2025. Some stuff is expiring in ’25, some in ’26. Opportunity Zones is a very small part of that TCJA, and that is one provision that’s expiring at the end of 2026. But, I think there’s gonna be some urgency from some parties in Congress to get those TCJA provisions extended, renewed in some way, before they expire at the end of 2025. So, I really think year-end 2025 would be a much more realistic timeline and time for a tax-legislative vehicle to come through, to possibly be a vehicle for Opportunity Zones to ride inside, and finally, fingers crossed, we’ll get that Opportunity Zone provision extended and reformed sometime in 2025. I’m hopeful it happens sooner, cautiously optimistic, but I think, more realistically, probably 2025 is gonna be that next best opportunity.
But if you’re interested in learning a lot more about that, Shay Hawkins, who is formerly tax policy advisor for Senator Tim Scott, and is today founder and president of the Opportunity Funds Association, he is gonna be presenting an OZ Insiders master class to our OZ Insiders members next month. He’s gonna cover this legislation in great detail. That meeting is going to occur on Monday, February 12th, at 3:00 p.m. Eastern Time. It’s available for all Oz Insiders members. To learn more, visit ozinsiders.com. For those who are not aware, OZ Insiders was launched toward the end of 2023, as my brand-new mastermind group for high-performing Opportunity Zones, professionals, and investors. We’re gonna be working a lot this year to grow this group considerably in 2024. We get together every month, with online meetings and master classes. And we also are gonna have two or three in-person dinners in 2024. You can learn a lot more about OZ Insiders, why you might be a great fit for it, if you wanna learn more, please visit ozinsiders.com.
Now, additionally, in 2024, through OpportunityDb, I’m gonna host three live events that will showcase some of the country’s best Opportunity Zone Funds and deals. Just like in previous years, it’s OZ Pitch Day. OZ Pitch Day is my free, live online event. Like I mentioned, we run it three times a year. We’ve done 10 of them now. If you’re an investor, it’s a great event to learn more about how sophisticated investors are using Qualified Opportunity Funds in their portfolios, and, you can discover your next Opportunity Zone investment there. Our first OZ Pitch Day event of 2024 will be the spring event, taking place on March 7th, 2024. Now, we’re also gonna run a summer session, on June 13th, 2024, a little earlier than usual. In past years, we had done that one in July, but we got some feedback to move it up a little bit, so technically, it’s still in the spring, before the summer solstice, but we’re calling it the summer one anyway. It’s after Memorial Day, so I think we can get away with it. June 13th, 2024 is our summer session. Finally, we’re gonna wrap up with our year-end OZ Pitch Day. Our fall event will take place November 7th, 2024. So, save those dates. You can learn more, and register, by visiting ozpitchday.com.
Happy New Year to all of my listeners and viewers out there. Really great to have you here joining me for another year of Opportunity Zone coverage, here in 2024. Please subscribe to us on YouTube, or your favorite podcast listening platform, to always get the latest episodes of the “Opportunity Zones Podcast.” You can also head to opportunitydb.com/podcast to subscribe to the show, and read the show notes for the latest episodes. And now, please enjoy this recording of the first OZ Insiders webinar of the year, “How to Invest in OZ Deals in 2024.”
Welcome, everybody. Today’s webinar is titled “How to Invest in Opportunity Zone Deals in 2024.” I’m Jimmy Atkinson, founder of OpportunityDb, host of OZ Insiders, and also host of the “Opportunity Zones Podcast.” We got enough people here. Let’s go ahead and dive right in. I’m gonna share my screen here. I’m gonna teach you about how to invest in OZ deals in 2024, and then I’m gonna tell you a little bit more about OZ Insiders, and then we’ll save time for some questions.
So, without further ado, let’s talk about 2024. First of all, happy New Year to everybody. Happy New Year to all my Opportunity Zone friends and followers on this platform. It’s great to see you here in the new year. Let’s go ahead and dive in. Now, before today’s session ends, I’m gonna show you five key things, really. One, key Opportunity Zone dates and deadlines to consider in 2024. Two, I’ll show you how to invest in Opportunity Zones, what you need to get going, and the different ways to participate in Opportunity Zone investments. Three, some best practices for structuring Opportunity Zone deals within your own Qualified Opportunity Fund, whether you are a syndicator, or a fund operator, or a developer, or you’re an investor who is looking for your own deals, and you have your own QOF, for whatever reason. I’ll show you some best practices for structuring those OZ deals within the structure of a Qualified Opportunity Fund. Number four, we’ll go over an overview of my new mastermind group, OZ Insiders, and then…plus why it might be a good fit for you. Now, for those who stay until the end, I have a special offer that’s good today only, for any new OZ Insider members who join our group today. I’ll get to that at the very end of today’s presentation.
Legal disclaimer, before I officially get going here. This is not investment advice. In fact, nothing we do at OpportunityDb or OZ Insiders should be construed as investment advice, investment services, legal advice, legal services, tax advice, or tax services. Please consult a professional advisor before making any investment or tax decisions to consult your specifics advice about your situation.
I think this is a great moment in time for Opportunity Zone investors, or syndicators, or fund operators, or developers who are looking to raise OZ equity, and this chart really explains it all. This is a chart of the S&P 500. I just grabbed it minutes ago, right before we went live. The S&P 500 is currently at 4700 and change. It’s within 100 points of an all-time high. It’s up 86% over the last five years. An incredible bull run that the S&P 500 is on. There’s a couple of dips in there. You can see here, early 2020, we had the COVID dip. Throughout 2022, there was a bit of a bear market here, or a recession, almost recession. Kind of depends who you ask whether we were officially in a recession or a bear market or not. It was close, but we’ve since pulled out of it. The stock market was up huge in 2023. All of this is to say, Opportunity Zones, being a capital gains tax-based, tax-incentive-based program, there’s a lot of capital gains locked away in the stock market.
I know interest rates are high, investor sentiment is low, M&A transaction volume is down, real estate transaction volume is down. But if you’re a stock market investor, and by the way, not even to say what’s happened with Bitcoin over the last year. You can pull up that chart on your own. If you’re a stock market investor, or a crypto investor, you likely have some huge gains locked in, depending on when you got into the market. But there’s a good chance that you, or your would-be investors, have some pretty sizable gains that they’d like to shelter. This might be a great year for stock market investors to rebalance their portfolio, take some chips off the table. They might have some gains, you might have some gains, that you wish or that your investors wish to shelter with Opportunity Zone investment. So, I just like to use that chart to kind of paint a picture for everybody, and give a little more context to what we’re talking about today.
So, Opportunity Zone investments, in 2024, there’s really three ways that I like to look at this, about why you might be interested in learning how to invest in Opportunity Zones in 2024. Number one method, you have a capital gain, and you wanna be an LP in someone else’s fund. So, that’s the first bullet point here. Capital gain, you’re an LP in a third party QOF. You write a check over to a fund operator who has a Qualified Opportunity Fund, they’re raising equity from outside investors, and they’re taking that equity and they’re deploying it into one or more Opportunity Zone deals all around the country. The second way I like to look at is you have a capital gain, and you wanna put together your own deals. You wanna be a GP, or a general partner, in your own captive QOF. You’re not necessarily interested in raising money from any outside investors, or not a lot of outside investors, maybe just with one or two business partners, maybe with friends and family, but for the most part, it’s a captive Qualified Opportunity Fund, it’s a self-funded Qualified Opportunity Fund. I’ll show you a bit about those first two methods here in a minute.
And then the third, different way I like to look at Opportunity Zone investing is you might be interested in Opportunity Zone investing not because you have a gain to invest, although, certainly, you might as well, but you’re raising OZ equity from others, so you want to leverage the Opportunity Zone incentive, in order to draw in more investors to your venture capital business, your startup business, or any type of real estate deal that you’re trying to put together. By the way, these three methods aren’t mutually exclusive, right? I know some investors that are doing a little bit from all three of these buckets. They have a capital gain, so they’re gonna write a check over to a third-party QOF, to manage that for them, but they’re also putting together their own deal, and then they’re also raising OZ equity from others. You can certainly kind of dip into all three of these buckets.
So, let’s talk about that first bucket, investing in a third-party QOF. You have a Qualified Opportunity… I’m sorry, you have a capital gain, essentially. Maybe it’s from the sale of highly-appreciated stock. Maybe it’s from the sale of Bitcoin or some other cryptocurrency. Maybe it’s from a real estate transaction. And you wanna shelter that gain. You wanna defer recognition of that gain until the end of ’26. You want to be able to not pay taxes on any subsequent gain, within an Opportunity Zone investment, but you’re not really interested in being a GP. You don’t really wanna manage the deal or source the deal yourself. You don’t wanna deploy the capital. You just wanna simply write a check to one of these big fund operators, and let them handle the deal, let them handle the administration of the fund. It’s likely gonna cost you a point or two in fees, but it’s, you know, for someone who just wants to be a passive investor, this is a great way to do it.
So, we have two resources. I’ve got screenshots of both of them on our website. We have a directory of Opportunity Zone Funds, with different filtering options. Currently, we have over 140 different Opportunity Zone Funds that are listed on our website. You can find that platform by heading to db.opportunitydb.com. Or if you’re just on our homepage, opportunitydb.com, just hit the Funds text link in the top nav, and it’ll take you right over there. Another service we offer for these types of people who, you know, high-net-worth investors, advisors, family offices, who don’t wanna manage their own deal, but they just want to write a check, and ride alongside with these operators who are managing the fund, is our OZ Pitch Day event. So, three times a year, spring, summer, and fall, we do a big, day-long event, where we showcase up to 12 different Qualified Opportunity Funds that are raising capital from high-net-worth investors. So, you can head to ozpitchday.com to learn more. Or, if you’re at our homepage, opportunitydb.com, just hit the OZ Pitch Day link in that top nav. This screenshot is the on-demand version of the OZ Pitch Day event that we just hosted back in November, about two months ago now.
Our next event is going to be in March, and we’re gonna get the sign-up page for that up on our website in January. If you’re here, right now, or you’re listening to us later on, chances are you follow me. If you don’t follow me, please do follow me, and we’ll get that announcement out to our e-mail subscribers and our website followers a little bit later this month, when that form goes live. We’d love to see you there at OZ Pitch Day. There’s two other ways, two other buckets for folks who are interested in Opportunity Zone investing. You might be investing in your own captive QOF, like I said before, basically, funding your own deal, as a GP, and then sourcing that deal, and deploying the capital, just a smaller deal with fewer investors. Maybe you’re the only investor. Or, you’re raising OZ equity from other investors. So, you’re essentially the fund manager, and the GP, and you’re raising from outside investors. Maybe you have some skin in the game of your own. Maybe you have a capital gain that you’re deploying into that deal, but, you know, for example, maybe you need $20 million of equity, you’ve got $5 million of your own capital gain you’re pouring in, but then you need to raise $15 million more equity on top of, you know, some debt financing you’re doing, total project cost, let’s say it’s $50 million. I’m just making these numbers up, but that’s one type of capital stack. You’re coming in with some of your own money, but you still need to raise from some outside investors.
So, whether you fall into that second bucket, investing in your own captive QOF, or if you’re raising OZ equity from others, it’s helpful to know how to structure Opportunity Zone deals, and recently, just last month, at OZ Insiders, we hosted a master class on just this topic. It was taught by Ashley Tison, at OZPros. And I’ve borrowed or stolen one of his slides. This is Ashley Tisons’s big slide. All credit to Ashley Tison. He developed this slide. I’ve blurred out the text on the sides, not because I don’t want you to know about it. We actually have this resource available. But mainly, I just wanted to simplify this chart for this presentation. I wanna keep it very simple. Because Ashley spends, he can spend 30 to 60 minutes on this slide alone. I just wanna spend a couple minutes on it today, just to show you exactly how an Opportunity Zone deal should be structured.
Now, I’m gonna back up a couple of slides, and if you’re this first bucket, if you’re investing in a third-party QOF, if you’re just writing a check to somebody like Urban Catalyst, or Caliber, or Origin Investments, or Capital Square, or GTIS partners, or any other type of larger Qualified Opportunity Fund that’s raising capital from third-party investors, this chart, you don’t really need to know about it, but if you fall in…although it’s helpful to know about it. But if you fall into one of these other two buckets, you absolutely should get to know this chart, and you should probably talk to Ashley at some point, too. But essentially, at the top here, you have investors, this blue oval, and these investors typically will be capital gains investors. Now, caveat there, they don’t have to be capital gains investors. If you, as an investor, or if your investors come in with non-capital gains dollars, you’re perfectly able to do so. Just know that non-capital gains money is not able to take advantage of any of the tax incentives associated with Opportunity Zone investing. Not a single one. So, you can put ordinary money into a QOF, but it doesn’t get any of the tax advantages whatsoever. So, typically, you’re gonna see investors with capital gains are the ones that you’ll target, as an equity raiser, or that you may have already, as the self-captive QOF holder. This is the top layer, right here.
That money, in order to fully qualify, in fact, in order to qualify at all, for any of the Opportunity Zone tax treatment, absolutely has to flow directly into a Qualified Opportunity Fund first. This Qualified Opportunity Fund is essentially just an entity, that, a non-disregarded entity, that chooses, or self-elects to be taxed as a Qualified Opportunity Fund. There’s no red tape you have to cut through. There’s no hoops you have to jump through, other than this Qualified Opportunity Fund files one additional form with its tax return every year, and that’s IRS Form 8996. Typically, this is an LLC. It’s not always an LLC. There are some S corps or C corps around. There’s some QOFs that are structured as REITs, that’s set up as C corps. But, like, 90% to 95% of the time, I would say this is just structured as an LLC partnership, and it cannot be a disregarded entity. So, it can’t be a single-member LLC. It has to be a multi-member LLC. Now, that’s the one hook here. You can’t truly do this all on your own. Oftentimes, someone will bring in a minority partner, with 0.01% holding interest in the QOF, and that’s perfectly fine to do so.
From there, the next layer is, and this is often called a two-tier structure. Because a QOF can bypass this green triangle here, and invest directly into property, but more often than not, you’re gonna wanna set up another corporate structure, another company structure, another entity, is what I’m trying to say, underneath that, this orange triangle QOF. That’s this green triangle QOF here, the portfolio company, or the hold co, essentially, and that is the Qualified Opportunity Zone Business. And that business entity, which, again, is most of the time, structured as just an LLC, and has an operating agreement, with language in it that says because it’s going to be treated as a Qualified Opportunity Zone Business, per the legislation in the Tax Cuts and Jobs Act, just one or two sentences you really need in that operating agreement, just to kind of belt-and-suspenders the thing for a future audit. Fingers crossed that never happens, but at least, if it does, you have that language in your operating agreement. That’s always helpful.
The QOZB doesn’t file any special form. In fact, if you do file, as a QOZB, Form 8996, then the IRS thinks you’re a QOF, so you actually don’t wanna do that. You just file normally, just as any normal LLC partnership would. This QOZB is then the company that directly holds the underlying assets, the real estate project, or portfolio of projects that the fund investors are investing in, and/or any business entities, startups, or ventures that the QOF investors are investing in. So, this is essentially, at a high level, what this whole thing looks like. An investor, a U.S. taxpayer triggers a capital gain, becomes an investor, and then flows capital gains dollars into a QOF. The QOF then will deploy capital into a QOZB, and the QOZB then deploys capital into the actual QOZBP, or QOZB, sorry, Qualified Opportunity Zone Business Property. The QOF needs its own entity, its own bank account, its own EIN, and so does the QOZB. And that’s essentially it. That’s Opportunity Zones on a page, very brief. Again, many thanks to Ashley Tison for letting me steal this. I don’t know if he let me steal it. I just did steal it, but I’m giving him full credit. And we have this available as a resource within OZ Insiders. If you’re a member, or you wanna become a member, you know, we have access to this full slide.
Now let’s go over some key dates for 2023 and 2024. And then, I wanna tell you more about OZ Insiders, and whether or not you might be a good fit for it. So, some key… By the way, in the teaser slide, earlier, and in some of the email communication I was writing earlier this week, I promised I was gonna give some key dates for 2024, and then I realized, well, there’s two sets of key dates. There’s key dates for tax year ’23 and tax year ’24, so I’ve got two slides on this section here, and I’ll try to go through these quickly, because I do wanna be able to talk to you more about OZ Insiders, and then get to some questions. But let’s talk about tax year ’23 first, and the key dates to keep in mind. So, tax year ’23, December 31st, what was that, less than a week ago, was the last date to generate a gain in ’23. And then you have 180 days to take any gain that you generate, and roll it over into a Qualified Opportunity Fund.
Now, what’s of interest this year is February 29th exists this year, because it’s a leap year, so it kind of pushes a couple of the deadlines forward one day. Just keep that in mind. March 15th of this year is when the partnership tax return is due. That’s important. I’ll get to that in a minute. April 15th is when the normal tax, or individual tax returns are due. So, ideally, if you’re going to take a ’23 gain and invest it into a Qualified Opportunity Fund, you do so before this April 15th date. You don’t necessarily need to. And in fact, sometimes it’s very hard to be able to figure out that you can do that. Oftentimes… And by the way, if you’re a high-net-worth investor or a family office, you probably are extending your tax return every year. That’s what I do. That’s what all my partners do, and a lot of my colleagues do. So, this April 15th date is just kind of your best guess. And then you filed your final tax return in October 15th. So, the dates in between there, then, are these two key dates here, that revolve around Opportunity Zone investing. June 27th of 2024 is the final date to invest a ’23 gain into a QOF. Now, by the way, this is if you trigger the gain on exactly December 31st, this is basically, like, the final date that you, for a gain that was triggered on December 31st, you have until June 27th to invest those dollars into a QOF.
Now, unless…unless you have a gain from ’23 that was generated on a partnership K-1 return. Now, if you have a gain from ’23 generated on a partnership K-1 return, your 180-day clock can start ticking on a variety of different dates. But the two most common dates is one, the date when the gain was actually triggered. So, if you triggered a gain on January 1st of 2023, you would have until, what was it? June 29th of 2023 to invest that gain. Hypothetical example. But if that gain was generated through a partnership K-1, then you can actually elect a different date. You can actually elect the due date of the partnership tax return as the start of your 180-day clock. Not a lot of people know this. This is kind of a weird, esoteric rule. So, if you generated a gain at any point in time during 2023 on a partnership K-1 return… Let’s say it was generated on January 1st, 2023. Normally, you’d have until toward the end of June to roll that gain over into a QOF. But instead, you can elect to use March 15, 2024 as the date when you first start that clock ticking. Well now, that buys you an extra 180 days, and now the final due date, normally September 11th, but this year, because it’s a leap year, September 10th of 2024 would be your final date to invest 2023 K-1 gains. That buys you a ton of time. I mean, it’s essentially, what is January 1, ’23 through September 10, ’24? That’s way over 180 days, right? That’s over a year and a half. So, just, you have a lot of time there. And then, October 15th is when your tax return, your extended tax return is due.
The dates are very similar for ’24. I won’t belabor these points here, but these June and September dates are a little bit different, because it’s not a leap year next year. So, those are some of the key dates for tax year ’23 and tax year ’24, which takes us through ’25. I wanna take a moment now to tell you a little bit about OZ Insiders. Maybe you’ve heard about it. Maybe you sat in on one of our previous webinars before. If you have, this might be a little bit repetitive, although we do have some new news to share. But OZ Insiders was founded by myself. Andy Hagans is my cofounder. We founded OZ Insiders to be the go-to place for high-performing Opportunity Zone professionals, executives, and investors who wanna take their Opportunity Zone strategy to the next level, and to stay relevant, and to stay in the know on all things Opportunity Zones. Now, first of all, quick disclaimer here. Neither accepting Opportunity Zone equity, nor joining OZ Insiders as a member, will ever take a bad deal and make it good, or make it pencil. Right? That makes sense. Doesn’t that make sense? Like, I can’t take a bad deal of yours, slap some lipstick on a pig, and make it good. So, you’re not gonna instantly close out your funding round, or, you know, I’m not instantly waving a magic wand and making bad Opportunity Zone Funds good deals, right? That makes sense. Don’t you think that makes sense?
But what can OZ Insiders do for you? I promise you that it will drive your Opportunity Zone strategy forward, and unlock new growth, without wasting time on dead ends. Essentially, OZ Insiders is a shortcut, to get to that next level of Opportunity Zone execution, and oftentimes we hear three different challenges from people who follow us, whether they’re listening to our podcast, or they’re writing me an email because they’re subscribed to our email list, talking to people on the phone, different fund managers or accountants or attorneys, or syndicators, or real estate developers. The three challenges I hear, you know, one, “No one is facing my unique problem. Oh, I’ve got this really unique problem. You know, I invested in this property before I set up the QOF,” or, “We’ve got this deal across the street from a census tract,” or, you know, I’ve heard it all, right? Challenge number two is, “Oh, Opportunity Zones. They’re too confusing. It’s too new. It’s too hard to find the true experts who know how to execute. Everything just takes longer with OZs.” And then the third challenge that I hear a lot is, “It’s really hard to stay in the know on the latest trends and best practices. Like, where do I keep up with all this stuff? Where do I keep up with legislative efforts? Where do I keep up with successful fund launches, closes, raises, deployments? Where do I keep up with best practices?”
So, challenge number one. Let’s address that one, “No one else is facing my unique OZ problems.” We have been there, and we’ve done that. We have over 20,000 people on our OpportunityDb email list. We have fielded just about every question about Opportunity Zones that you can imagine. And if we haven’t heard it before, I know somebody who has. We have a pretty extensive Rolodex, which I’ll get to in a minute. Challenge number two, and this is a big problem, by the way, that I hear about a lot. It can be hard to find the true experts who have deep expertise. Everything takes too long with Opportunity Zones. And that can be true if you don’t know where to turn. But actually, finding the right professionals can be easy. It’s easy for us, at least. We’ve been operating in Opportunity Zones industry since the very beginning, in 2018. You know, I started OpportunityDb in August of 2018, just a couple weeks after the zones were first designated, and I’ve been building up my Rolodex ever since, and we have almost 300 episodes of our podcast, and the guests on those podcasts have been great resources. So, we’re basically your shortcut for what used to take a long time.
Finally, challenge number three, that I hear a lot of with Opportunity Zones, is that it’s hard to stay in the know. Nobody’s covering Opportunity Zones. Nobody’s putting together best practices in Opportunity Zones. Nobody’s covering the latest trends in Opportunity Zones. That’s just not true. That’s why we’re here, right? The OZ Insiders network is a community of experts, and a community of fellow Opportunity Zone practitioners, that’s really helping everybody within the network stay in the know. I’m doing that as the leader of OpportunityDb, and the host of the “Opportunity Zones Podcast,” and the host of OZ Insiders. But it’s not just me. It’s all of the people in our network as well. So, now, let me ask you a question. Is it all right if I tell you a little bit more about OZ Insiders, and what it is, and what’s inside it? Does anybody wanna hear about what else OZ Insiders can do, and what’s inside OZ Insiders, what it is exactly? Who wants to hear it? You wanna hear it?
So, here’s what you’re gonna get when you join OZ Insiders. We’ve got Jon Stewart raise his hand. Thanks, Jon. I think everybody’s raising their hands like this, maybe. I can’t see them, but I trust that they’re out there. Here’s what you’re gonna get when you join OZ Insiders. You’re gonna get access to our Rolodex. So, I’ve hinted at this before. I’ve been working within Opportunity Zones for, wow, it’s almost six years now, because it’s 2024. I started in 2018. It’s closer to five and a half years. We’ll get to six years soon enough, but I was there, on the ground floor, from the very beginning. And I’ve been going…I don’t know how many conferences I’ve been to, dozens of different conferences and meetings over the last five and a half years, meeting with dozens if not hundreds of different Opportunity Zone practitioners, CPAs, attorneys, developers, syndicators, fund managers, investors. I know a lot of people in the space, so I can help get you plugged in to the people that you need to get plugged into, no matter what your issue might be.
Here’s what else you’re gonna get. You’re gonna get live monthly master classes. So, we’ve already started teaching these. We’ve done two of these already. We just launched in November. So, we’ve done the November master class, and we’ve done the December master class. Our next master class is coming up on Monday, this upcoming Monday, actually, just one, two, three, four days from now, January 8th. It’ll be with Andrew Doup, and he’s gonna be presenting a master class on Opportunity Zone PPMs and subscription docs. My apologies. The time of this actually got changed to 2:00 p.m. Eastern Time. This is an old screenshot. Ashley Tison was the previous master class. I kind of broke down a very small part of his presentation when I talked about that Opportunity Zone structure, with the ovals and the triangles. That was, you know, the five-minute version of Ashley Tison’s very in-depth presentation on how to structure OZ deals. Any, all of our master classes are recorded, and they’re available on demand, at any time for our members, but it’s great to be able to join live. But if you join today, and you missed the previous two, you can watch them instantly, and you’ll be able to participate in our upcoming one live, with Andrew Doup, on Monday.
Two more upcoming classes we have scheduled. The February master class will be about, all about the OZ legislation inside Capitol Hill, what’s going on behind the scenes. Our man on the ground there is Shay Hawkins, from the Opportunity Funds Association. He’s gonna give a breakdown on what’s happening with OZ legislation. Will it get extended? What will it look like if it does get extended, and so on? And then I’m gonna be presenting a master class in March on how to raise Opportunity Zone equity. So, when you join OZ Insiders, you’re going to get access to our Rolodex. You’re gonna get access to our live monthly master classes, but I just mentioned, also, you’ll get on-demand access to our library of all previous master classes. So, here’s two of our previous master classes, “Structuring Opportunity Zone Deals,” from December, and then our master class in November was tax-free capital gains, which painted a picture of how QOFs kind of work within the broader context of tax-free capital gain structures. Michael Johnston, our colleague at Tax Efficient Investor, broke down other programs, QOFs, for one, but also, he talked about Qualified Small Business Stock, 1031s, and a handful of other structures that, I learned a lot from that one. That was cool.
We also give you the deck from all of these presentations as well, once they’re in the on-demand library. So, you’ll get access to our Rolodex. You’re gonna get access to our live monthly master classes. You’re gonna get an on-demand library of previous master classes, and the decks. It doesn’t even say that, but the decks are available for download. In addition to that, you’re gonna get 24/7 access to our private chat group. That’s right. We’re a community. So, we’re not just a website that you get to visit and just look at, but you want to be able to participate with other experts, other members in the community. So, we have a private chat group which we host on the Slack app. It’s a mobile app. It’s also a desktop app. It’s also just a web app. If you don’t wanna download anything on your phone or computer, you can just access it on the website. But this is a great way for all of our members to kind of stay in touch. This is a screenshot from a while back. This was back in, when we first launched the Slack app, so, this is mid-November, right after I got back from the Novogradac Opportunity Zone Summit. This was actually early November. I think it was November 1st, some of this message here. And there’s a picture of me and Ashley Tison from behind the scenes. Our member, John Vachon, snapped that one, and I was the one who ended up uploading it and throwing it up to the group. But that’s me and Ashley behind the scenes, recording the latest episode of the “Opportunity Zones Podcast” live on-site.
So, there’s a lot of best practices shared there. Some ideas. Some questions that get answered, like, “Hey, what’s going on in Puerto Rico?” “Hey, here’s a list of a bunch of real estate transactions that have been conducted in Opportunity Zones.” Our members share back and forth a lot of different information. It’s not just driven by me. I’m in there, obviously. Andy is in there as well. We’re here to answer your questions, but it’s a lot of the chatter between different members that’s really valuable there. So, when you join OZ Insiders, you’re gonna get access to our Rolodex. You’re gonna get live monthly master classes. Part of that is, I basically taught a mini master class today, on investing in OZ deals in 2024, a very small, condensed version. Our live monthly master classes go into more detail, more in-depth. You’re gonna get access to the on-demand library of all previous master classes. You’re gonna get access to that private chat group on the Slack app. But you’re also gonna get invitation to our private in-person events. We’re gonna do at least two, maybe three in-person dinners in 2024. Our first dinner is gonna be in Dallas, on March 11th. We’re likely to do one in Chicago, in late spring or early summer, and then, if all goes according to plan, we’ll likely do a third one in the fall, but we haven’t firmed up the details of that one just yet. But for sure, the first one’s gonna be March 11th, in Dallas. That’s on our website. If you go to OZ Insiders, and hit the calendar, ozinsiders.com, at the calendar link, you’ll kind of see all of our upcoming stuff.
Total value of all this? We priced it, I think this is kind of conservative, total value is $27,800. Now, obviously, I’m gonna charge you $27,000 today, but I wanna ask you some questions. If all OZ Insiders did was give you access to our Rolodex, just all of those connections I’ve built up over the years, if I’m able to just plug you in with the one key or two key people, one key person or two key people that you need to get connected to, would it be worth it? If all I did was provide you with invitations to our in-person meetings, got you in the room with other professionals and high-performing executives within the Opportunity Zone space, would it be worth it? If all OZ Insiders did was just simply give you the highest quality educational content in our industry, you know, a little bit more of what I presented today, would it be worth it? I’m inviting you to get started now. Check us out. ozinsiders.com. Again, conservatively estimated as a $27,800 total value. We’re offering it right now for $299 per month. I think it’s a steal of a deal. And if all it did was just any one of those three things, I think it’s well worth it. Again, I told you I wasn’t gonna charge you $27,000. Only $299 a month.
But wait, there’s more. We’re gonna give you a 60-day money-back guarantee. So, I recognize that OZ Insiders isn’t for everyone. And maybe you need to kind of try it for a few weeks. And maybe you decide it’s not for you. I totally get that. Maybe your situation changes within the next 30 days. Or maybe you decide, “Eh, this isn’t quite for me.” I’m totally fine with that. And in fact, we’ve had, let’s see, we’ve had about 30 members join. We’ve had, I think, two of them cancel on us, just being fully transparent here, and I just say, “Hey, that’s fine. Thanks for giving us a try. Here’s your money back. No questions asked,” and send them on their way. But most people stick. But I understand that every hundred people that join, you know, we might have five or ten of them who end up deciding it’s not quite for them, and that’s fine. So, if, within any point in time, in the first 60 days that you’re a member, it’s not for you, and you want your money back, we’re gonna give you all your money back, and send you on your way, no questions asked. That’s pretty much self-explanatory.
So, again, just to kind of recap everything. When you join OZ Insiders, and you can do so right now, by heading over to ozinsiders.com, you’re gonna get access to our Rolodex, you’re gonna get our live monthly master classes, basically a more expansive version of that mini class I taught earlier today on how to invest in OZ deals in 2024. You’re gonna get access to our on-demand library of all of our previous master classes, and be able to download the decks. You’re gonna get 24/7 access to our private chat group on the Slack app, and you’re gonna get invitations to our private, in-person, members-only events. First event will be a dinner, at a nice steakhouse, in Dallas, March 11th. We’re still firming up the plans. You can refer to our calendar, ozinsiders.com, hit the Calendar link to learn more about that. Total value, $27,800. So, this is what you’re gonna get. $299 a month. That’s all we ask. You get the 60-day, no-questions-asked, money-back guarantee. You can get started now, by heading over to ozinsiders.com, or, scan the QR code on your screen, if you’re watching us. That’ll take you right there. And there’s a recap of everything that you’re gonna get. Get started now, ozinsiders.com. It’s just $299 per month. By the way, we do have a year-long plan as well. If you wanna commit for a full year, you can save, I think it’s, what does it say? Fifteen percent or so? Seventeen percent? It’s $2999 for the year. And the 60-day no-questions-asked, money-back guarantee applies to that plan as well. You join for the year, you say it’s not for you, we’ll give you your money back. So far, members have been pretty satisfied, though.
So, that’s it. That is what we are offering today. Let me see if we have any questions. Where are we with our time, also? Where did my watch go? Andy, how are we doing on time? There it is. Got about four or five minutes left, I think, to address any questions that anybody might have, if anybody does have any questions. Oh, I did have a question here, that I just got. It asks, “When does the…” what does that say? “When do the master class recordings get put up on the website?” Okay. Great question. So, the master class recordings typically get put on the website, if not later that day, then by the next day. Certainly within 24 hours, we have that recording up and running on the website. They are always hosted on the first Monday… No. Sorry. They’re always hosted on the second Monday of every month, typically at 3:00 p.m. Eastern Time. The one, this upcoming month, next week, is actually at 2:00 p.m. Eastern Time. And I just had a question. “Hey, one more time, Jimmy. When and what is the next master class?” Great question. Let’s back it up a little bit. The next master class is going to be…and actually, I’m just gonna stop my screen share, because the slide there was actually incorrect. So, I’m gonna stop the share, and I’m gonna pull up a different window, to share with everybody right now. So, give me just a second here to pull that up. I’m gonna share this screen… Right, here is live TV, folks. Thanks for bearing with me.
Here’s a little behind-the-scenes sneak peek at the dashboard, by the way. So, I’m logged in right now as a member of OZ Insiders. Here’s Andy Hagans, co-founder of OZ Insiders, with his welcome address here, to new members. And then here’s the on-demand master classes that we have. We also have a roster, and then some account management. The calendar, if you click up there, though, it’ll take you to our list of upcoming master classes. So, our next one, great question, is Monday, this upcoming Monday, January 8th. It’ll be at 2:00 p.m. Eastern Time. The title is “Opportunity Zone PPMS & Subscription Docs.” So, it takes that…if you are an operator who wants to be raising equity from outside investors, and you’re setting up your own Qualified Opportunity Fund, and you have a deal that you need to deploy capital into, but you need a way to take that equity, bring in that equity from outside investors, this class is for you, “Opportunity Zone PPMS & Subscription Docs.” Andrew Doup’s going to outline exactly…in fact, I think it’s gonna be in the format of a case study, where we present him with a example Opportunity Zone deal, and Andrew’s gonna show us exactly how he’s gonna set up that private placement memorandum, which is what PPM stands for, and the subscription docs that can go with it, in order for it to qualify legally as a security, and to enable that GP or that fund operator to raise equity from outside investors.
Let’s see. We’ve got a few questions here that came in. Sue is asking, “How do I enroll at the yearly rate? The link seems to only show the monthly option.” So, great question. Let me log out here, actually, and see if I can… Yeah, let’s log out. Why not? Okay. So, I’m logged out now. So, if you go to ozinsiders.com, and scroll down here, we’ve got a monthly membership at $299 per month. You can click here to join that. And on the right side here, Annual Membership, you can save 17% by joining annually, and if you click this link here, under Annual Member, that’ll take you to the annual checkout page, which is $2999 per year. So, those are your two options there. Great question, Sue. And I see Andy just chimed in with the direct link as well. John asks, “I missed the first part of this presentation. Will I be able to get a copy of the decks?” John, yes. I will get you a copy of the deck. Can you send… I don’t… Well, let me think about that. I don’t think we had a plan in place to get the copy of this one out to everybody. You know what? I’m just gonna do it, though. I’m gonna send an email to everybody who registered for today’s webinar, I will send a link to the deck. I don’t have it uploaded anywhere in particular just yet, but I’ll make sure that we get that out to everybody later today.
I don’t see any other questions, so, going once, going twice, last chance, last call for any questions. I did say that I thought we could wrap this up in about 45 minutes. And I think we’re about at 45 minutes or so. So, thank you, everybody, for joining today. I hope you learned a little bit about how to invest in Opportunity Zone deals in 2024, and some of the key dates and deadlines for OZ investors to consider in 2024, whether you are going to be an LP in someone else’s fund, with a capital gain you generated toward the end of last year, or that you’re gonna generate this year, or if you wanna set up your own QOF, and self-fund it, or set up a QOF that you want to bring outside OZ the equity into, I hope today’s presentation was enlightening for you. This is basically just a very small, really, shallower version, I would say, of the master classes that we do once a month at OZ Insiders.
So, I really hope that you enjoyed this, and if you think OZ Insiders might be for you, I would encourage you to join. Head over to ozinsiders.com, scroll down here, and then you can join at the monthly membership level or the annual membership level. This is all we do, basically, in OZ Insiders, is teach stuff just like this, and then it’s also a great community of other high-performing Opportunity Zone investors and professionals. It’s a mastermind group. It really is a mastermind group, because it’s not just me organizing all the material. It’s everybody inside the group, that, the collective knowledge in there is unbelievable. So, again, I’ll let everybody go now. Thank you so much for joining me today. It’s been a pleasure, and we’ll see you next time. Thank you.