Invest in Qualified Opportunity Zones with 1031 Crowdfunding

A Qualified Opportunity Fund involves investing in an IRS-identified Opportunity Zone,
an economically disadvantaged or distressed area.

REGISTER TO VIEW ALL OPPORTUNITIES

Potential Investor Benefits

How to Invest in Opportunity Zones

1. Register to View All Properties

Create a free investor account to gain access to our marketplace of properties.

2. Explore Our Marketplace

Our selection of Qualified Opportunity Funds makes it easy to take advantage of the current tax benefits.

3. Invest Online

Let our expert team guide you through the investment process.

Get Started

Frequently Asked Questions

Why are Opportunity Zones something investors should consider? How do they work? What are the benefits that come with choosing this type of investment? Let’s examine the answers to these questions.

The benefits that come with Opportunity Zones are one of the selling points that attract investors and are the reason why they’ll put money toward these types of properties or businesses. Investors will invest a large sum of money from an asset they sold, also known as capital gains, to avoid paying capital gains tax. Capital gains tax on this income can be significant, and it’s beneficial for investors to find ways to reduce this tax by following tax acts or guidelines from the IRS. One of the significant benefits of investing money into an Opportunity Zone is the ability to receive a tax break on capital gains tax.

The tax break incentive for income or capital gains from assets is a perk investors will have to be patient with to receive the reduced tax. If an investor chooses to invest their money into an Opportunity Zone, they’ll have the option to defer their payment for the capital gains tax until they cash out from the investment. When an investor puts money into an Opportunity Zone, their money is held anywhere from five to 10 years.

Letting your money sit in this Opportunity Zone allows the project to utilize the funds to enhance properties or businesses. The longer you wait to cash out your investment, the better tax break you can receive. This process is known as Step-Up in Basis. The value of your investment is adjusted and the capital gains tax on your investment is lessened. Some Opportunity Zones will decrease the tax amount for investors’ capital gains tax by 10% until December 31, 2021. The percentage of your tax break is dependent on the type of Opportunity Zone and how long your money is held for the investment project.

Investors who invested in Qualified Opportunity Funds and held their money for 10 years won’t have to pay any capital gains tax on their investment. While it’s a benefit that requires patience and trust, it’s an incredible perk that attracted investors and gave them a reason to invest in these areas.

Investors will need to invest in an Opportunity Zone within six months of receiving your capital gains money.

Opportunity Zones were created as an investment option for a property or business in a location the government deems as an economically distressed community. The state or territory had the ability to nominate areas as an Opportunity Zone. Once one of these government entities nominated a location, the Secretary of the U.S. Treasury had to certify the decision and report it to the Internal Revenue Service (IRS). Opportunity Zones include areas nationwide, including rural areas, suburbs, major cities and industrial zones.

An Opportunity Zone is an economic development tool that assists in boosting job creation and other economic advancements in locations in distress or not at the top of the housing market. The money investors put into these Opportunity Zone projects is utilized to help improve housing, businesses and the community as a whole to help boost the local economy and better the area.

While the phrase sounds similar, an Opportunity Fund is another part of an Opportunity Zone. It’s the investment vehicle investors use to gain benefits and positive returns. An Opportunity Fund describes the way or method people can invest their money. These vehicles will ideally help grow the investors’ money. Investors can choose from a variety of investment methods and incorporate numerous investment vehicles into their portfolios.

Opportunity Funds are a simple way for investors to contribute money in Opportunity Zones. These funds allow you to work with trusted professionals and let them manage your investment and receiving distributions. Investors will give new capital gains or defer tax on prior eligible gains for the extent the money is invested into the Qualified Opportunity Zone.

You can contribute to an Opportunity Fund and defer capital gains tax until December 31, 2026, or until you have an inclusion event. The capital gains you acquire are eligible for an Opportunity Fund if they’re recorded for federal income tax purposes and aren’t from a relative. Investors must also meet filing requirements and investment timelines to invest in an Opportunity Fund.

Like an Opportunity Zone, investors can decide to place their money into investment vehicles like:

  • Certificates of deposit
  • Bonds
  • Options
  • Futures
  • Stocks
  • Collectibles
  • Annuities
  • Mutual funds
  • Exchange-traded funds

Investors can work to minimize risk by including many types of methods in their portfolios through diversification. Investors who have diverse investment portfolios tend to experience better long-term investments. Investors have different knowledge bases of the market and finances, which influence their investment vehicle choices. Other considerations that impact a person’s investment vehicle choice include financial goals, financial situation and risk tolerance.

Investors choose Opportunity Funds as their investment vehicle for a long-term investment. These Opportunity Funds facilitate the investment process for Opportunity Zones. An investor will hopefully see growth in their money over time while the Opportunity Fund works to help rehabilitate the location or section of town the fund will contribute to and make better.

For the Opportunity Fund to be successful, the money in the fund must make the properties substantially better with quality improvements. The improvements must be of equal value to the money invested into the Opportunity Fund. All changes to the Opportunity Zone must be accomplished within 30 months. Note that certain businesses aren’t allowed to be a part of an Opportunity Zone, including country clubs, gambling facilities, suntan and hot tub facilities, golf courses, massage parlors and more.

Investing in an Opportunity Zone comes down to your financial goals and how you feel about the process. It’s crucial to fully understand the process and complete research to ensure the Opportunity Zone you choose to invest in has the potential to provide a return.

Some experts will suggest that investors who have significant capital gains can benefit the most from an Opportunity Zone because of the tax break. If you’ve recently sold an asset, investing in an Opportunity Fund may be a great decision for your investment portfolio. However, it’s up to you to determine whether an Opportunity Zone is a smart move for you financially.

Search for Opportunity Zone properties and other investment vehicles that offer tax breaks or deferrals by checking out 1031 Crowdfunding. Join the crowd today and find the investment opportunity that’s best for you.

Committing to a new investment vehicle comes with many questions, and you want to make sure you’re making the best decision for your financial future. Before fully committing to an Opportunity Zone investment, here are a few things you should know before you invest your money:

1. Compliance Requirements and Regulations

Whether you’re new to the finance world or are familiar with numerous types of investments, some investment literature can contain unfamiliar words or phrases. This type of information is essential to understand when it comes to Opportunity Zone compliance requirements and regulations.

Completely complying with all of the Opportunity Zone regulations will help guide you in the right direction of getting the most out of your investment. The location you invest in must be a Qualified Opportunity Zone. These include corporations or partnerships for tax reasons and can certify their qualifications.

Other important opportunity zone rules include:

  • Qualified Opportunity Zones must have 90% of their assets in an Opportunity Zone location. Officials test this requirement routinely.
  • The Qualified Opportunity Zone property must have significant improvements.
  • A business in an Opportunity Zone must make at least half of their income from businesses within the Opportunity Zone.

Before diving straight into the investment opportunity, research and expand your knowledge on the compliance requirements to ensure it’s the right option for your investment portfolio.

2. Taxes and Qualified Opportunity Funds

When a person sells a property, stock or business, the money they gain is referred to as capital gains, and this asset money is taxed. Opportunity Zones provide tax breaks for this type of tax, making it one of the biggest perks of investing in a Qualified Opportunity Zone.

As previously explained, the percent of tax relief depends on how long your money stays in the Opportunity Fund. If you want to eliminate the capital gains tax, leave your money in the Opportunity Fund for the maximum amount of time to experience the extent of the major perk of this investment vehicle.

3. Impacts on the Community

Opportunity Zones can make a big difference for investors, but their main purpose is to improve the locations the Zones cover. The money in the Opportunity Funds can make a positive impact on the areas they service. If you’re investing in this opportunity, the process can be fulfilling knowing you’re making a difference in another community. To better understand an Opportunity Zone, learn about the community you’ll be investing in and how your contribution can impact the community.

Here are some of the needs for these communities and how your investment and help them grow:

  • More jobs
  • Increased wages
  • Reduced crime rates
  • Lowered inequality
  • Enhanced sustainability
  • Improved education

This investment vehicle can be an excellent economic growth tool for the area it’s contributing to. While investors are likely sold by the tax incentives that come along with Opportunity Zones, it helps that this investment enhances communities, so you know you can make a difference.

4. Opportunities to Invest in a New or Existing Qualified Opportunity Fund

Investors can simply find an Opportunity Fund they’re interested in, or they can set up and create their own Qualified Opportunity Fund. It’s important to understand that setting up your own Qualified Opportunity Fund is a big task. Investors will need to thoroughly understand the compliance regulations and rules and follow SEC guidelines when accepting capital from other investors.

Since creating your own Opportunity Fund is a significant undertaking, you can simply browse for a Qualified Opportunity Fund that already has a knowledgeable team. Allowing a third party to handle the Opportunity Fund allows you to take a more passive role in this investment and witness the impact of the Opportunity Zone without needing to be directly involved.

5. Investment Basics

Any investment vehicle has a thorough process and industry jargon that takes time to fully understand. If it’s your first time making an investment or your first time investing in an Opportunity Zone, make sure you research before investing. Knowing the basics of investing in these Opportunity Funds can help make a difference in your decision to allocate your capital gains funds.

When you’re looking into Opportunity Zones, look for properties that are compliant with Opportunity Zone regulations. Properties should be able to accept improvements equal to the value of the Opportunity Fund, so keep an eye out for properties that have more land surrounding them, deferred maintenance or new developments.

6. Locations for Opportunity Zones

To receive the benefits of an Opportunity Zone, the area and fund you’re invested in must be in a Qualified Opportunity Zone. Thousands of Opportunity Zones are scattered across the country. From inner cities to rural areas, you can find Opportunity Zones that pique your interest. If you want to check out different Opportunity Zones, search for them online.

7. Money Growth in the Investment Process

The characteristics of an Opportunity Zone help investors make their decision regarding the area they want their money to improve. Consider the factors that mean the most to you when looking at the metrics of an area and do your own research on various Opportunity Zone areas. This research will help you determine where growth is possible and how efficiently your money can impact an Opportunity Zone.

Look into the projected growth of an Opportunity Zone and how it can possibly impact a return. When looking into locations, consider the following:

  • The population of the area
  • Growth rate over the years
  • Location demographics
  • Jobs and businesses
  • Average income
  • Rental rates
  • Amount of properties

The Management Team of 1031 Crowdfunding

87

years in real estate

78

years in securities

$1.1B

Equity raised through investments

$2.2B

In combined real estate transactions

What Our Clients Are Saying

Read all testimonials

Katie L.

Highly recommend! Exceptional service, professional, high integrity, and trustworthy!

Patrick E.

The 1031 Crowdfunding team always responds quickly… delivers on all their commitments… and provide great guidance re: what investments are best aligned with my priorities. Couldn’t be better!

Keep reading

T

The Real Estate Crowdfunding Review

Would you recommend that your friend or family member invest with 1031 Crowdfunding?, 75% answered “yes”, 0% answered “no” and 25% answered “undecided”. This was one of the highest positive responses of any platform survey.

Keep reading

T

Tim C.

Very accommodating and will go the mile to answer all your questions. I did two transactions, both were smooth!

A

Arun G.

Excellent support and guidance during the transaction — without which it would have been very difficult in the age of the pandemic.

D

David H.

Great company. They made everything very easy. I would highly recommend.

    GET OUR FREE EBOOK!

    Sign up for our newsletter and receive a free copy of our ebook.

    Includes tips on how to:

    • Increase Cash Flow Potential
    • Lower Your Closing Risk
    • Diversify Your R/E Portfolio
    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.