Anyone ever heard of a Qualified Opportunity Fund?

I have no idea but am going to float a guess that if you get some Federal tax break and they call it an “Opportunity” it’s probably investing in a ghetto.

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Well it’s what it was intended for but I’ve seen these in areas that definitely aren’t ghetto.

They allowed the governor of each state to determine what the opportunity zones were. It’s essentially just places the government wants to encourage investment in. Google search will tell you those areas.

A lot of times people invest in a fund that’s already set up for these purposes. I’m not sure how many are still open for new investment at this point. Benefit of this dwindles the closer we get to 2026.

Essentially how it works is if you have $100k in capital gain, you can take that $100k invest it in a qualified opportunity fund and defer that gain until 2026.

You used to be able to get a full exclusion on the gain depending on how long you held the investment but if you’re not already in it then you won’t be able to qualify for it now

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All this is true (they are also called opportunity zone funds), since the Governor's got to pick the area there are some decent areas. Metairie north of Veterans i believe is an Opportunity Zone, parts of houston that are in good areas are opportunity zones bc it the boundaries were drawn right after harvey etc.

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Anyone ever heard of a Qualified Opportunity Fund?

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Yes, they were established as part of Trump's Dec 2017 tax bill. They weren't a particularly good investment at the time, and have only waned since then (as other posters have pointed out).

The problem is, the main people who stood to make money on this were the incumbent landholders the day before the legislation was passed. I say it on a lot of real estate threads here, but: land is where the action is! It's 4X more volatile than structures, and anytime there's a big value shift, it's almost always the land. So, if you owned property in an area that was all of a sudden designated an OZ, that land became worth much more, literally overnight. And that is, in fact, what we actually witnessed. A lot of stuff was up 25-100%. Only after that would you get pitched an OZ deal.

OZ's also require you to carry the investment for 10+ years (in addition to some other prescriptive constraints) in order to get the primary tax benefit. That's a long time, so the deal sure as hell needs to be good. But I saw a lot of people lose the forest for the trees and do deals that penciled ONLY because of the tax treatment.

Lots of people talked about raising lots of money to do lots of OZ funds. It ended up being a lot smaller than projected.