Its an experiment, but the stars seemed to align. I already have a few properties in the same neighborhood that we bought 2010 to 2012 so I know the economics. It is a gentrifying area. I make a reasonable amount of money shorting stocks and so i have a lot of short term cap gains in the Federal 37% +3.8% and NJ 8.9% for a marginal tax rate of 49.7%. I got a 3 apt building for $122k, (the land is $60k and $62k for the structure) and I will have to spend $62k fixing. Once fixed I think I can get $1.5k per unit/month. The opportunity zone fund (basically an LLC) is held 50% 50% as a partnership with my wife. I have pre-written a plan to improve the property over the next 31 months. The flip side is the $184k of gains Im using would have cost me $90k in tax in April gets deferred to april 2027, and reduced by 15% - if i keep my end of the bargain, and when I sell before 2048 any gain is tax free.
I'm interested to learn if anyone else has done this / watch outs / strategies etc.
