Do you know if you have to invest using a fund or legal entity?
Yes, evidently investments do have to be made via a "qualified" fund. However, a lot of the details of how those funds register and other details have not been released so I don't think we'll see anyone chiming in yet. It may be the process of qualifying a fund is relatively simple and we may as single investors set one up when we find an appropriate property. Or not.
Here's a country wide zoomable map of all the zones:
https://go.bakertilly.com/contactbtc0618In the other thread I mentioned that I found areas within the opportunity zones of good/very good streets/neighborhoods in markets that I know very well. It turns out that the opportunity zones were identified by census so that explains why that it is.
The real estate cpa podcast recently did an updated one on OZs that had a good bit of information that I hadn't heard clarified yet:
https://www.therealestatecpa.com/28-opportunity-zones/The main ones being that if you sell stocks/property to invest in an opportunity zone fund, you only need to invest the capital gain, not the basis, which is different from how 1031s work. Second that at least 50% of the worth of the building(s) (not the land), must be invested into the property on top of the purchase price. So, functionally the property would need to be an extensive rehab, expansion and/or new building(s).
Lastly, and perhaps (or maybe not) most interestingly, is that all the deferred taxes from the original investments will become due in 2026 or earlier if the investor sells their interest in the fund. So, there's going to be a situation in which many of the funds are going to be in a race to sell their investments by early 2027 when 2026 taxes are due for their investors.
It will be interesting to see how that last bit ends up working out. Will it create a dynamic where there are a multitude of very motivated sellers and buyers who know exactly how motivated (original purchase price-OZ deduction, extended filing deadline 2027) who will be able to get some good prices on updated or new properties?
