David Scherer, Co-CEO, Origin Investments joins Julie Cooling, Founder & CEO, RIA Channel to discuss today’s evolving QOZ investing landscape, key allocation considerations and timely 2021 EOY tax benefits.
Origin Investments is a top performing private real estate manager specializing in multi-family investments. The firm’s suite of diversified private equity funds spans from credit strategies to multi-family development and allows investors to target a range of returns based on their risk tolerance.
In addition to the firm’s IncomePlus Fund and Multifamily Credit Fund, the firm has also opened its second opportunity zone fund: QOZ Fund II. The Opportunity Zone Program, first introduced in 2017 to incentivize and stimulate investment into low socioeconomic areas across the United States, offers extremely advantageous tax benefits for individuals or institutions with any kind of capital gain:
- Deferral of the original capital gain until December 31st, 2026.
- A 10% reduction on the original capital gain. – Expires 12/31/21
- No capital gain taxes on the new investment, if held for more than 10 years.
While Scherer acknowledges that these are some of the best tax benefits he’s seen in his lifetime, he emphasizes the importance of manager selection and due diligence. “The reality is, you don’t get tax-breaks, if you aren’t making money on your investments,” Scherer cautions.
Origin focuses on 12 high growth target markets, and leverages machine learning and AI to identify sub-markets within each of those cities. From there, the firm overlays the QOZ map on-top of its sub-market analysis to pinpoint high quality investment opportunities. Much of the opportunity zone map, based off of the 2010 census, has already enjoyed development, improvements and gentrification.
As a mid-size firm, Origin is able to access unique assets and seeks out locations that have already benefited from the Qualified Opportunity Zone Program. Origin’s QOZ fund provides investors a geographically diversified portfolio, which can help mitigate risk and add additional value.
For information and education around Opportunity Zones and Origin Investment Solutions: Origin Investments Homepage QOZ Fund II Origin Insights – Education for Advisors