AUSTIN, TX—Realized, a tech platform that provides investment property wealth management, recently introduced its Qualified Opportunity Zone marketplace. The marketplace is a new platform that allows investors to compare Qualified Opportunity Zone/QOZ investments and provide greater access to a broader selection of QOZ investment funds.
The launch represents the firm’s latest move to integrate modern portfolio theory into the real estate investing industry, helping investors to maximize after-tax risk-adjusted returns via tax-optimized and diversified commercial real estate portfolios. Complete with a QOZ side-by-side comparison, the marketplace activates a formerly underserved need within the real estate investing industry. That is, the opportunity to weigh properties and funds against each other, and enable investors to gain more context and confidence in their selections.
With more than 346 Opportunity Zone funds in existence, it may be difficult for investors to choose the right property to meet their needs. Given this challenge, the natural next step was developing a platform with a select number of pre-vetted QOZ investments that could be easily compared and selected.
“Our goal has been to create a Qualified Opportunity Zone marketplace where investors can compare numerous Qualified Opportunity Zone Funds,” says Drew Reynolds, chief investment officer at Realized. “In our experience, no other company is running a marketplace for QOZs. Very few even offer multiple listings. We recognized that investors in these potentially higher-risk properties needed more context, and the ability to compare funds and select investments for their specific preferences.”
In addition to potential cash flow and capital appreciation, QOZ investments also provide deferral and reduction of any gains, not just those generated from the sale of investment properties. Furthermore, future gains may benefit from permanent exclusion from capital gains tax.
“The Opportunity Zone program introduced in 2017 to create incentive-based investing opportunities has gained traction across the nation. However, investors are still trying to better understand the opportunities and risks associated with these investments,” Reynolds continues.
Realized recognized due diligence is difficult for the individual investor, especially when comparing multiple offerings. Realized reviews each deal prior to listing them in its QOZ marketplace in an effort to ensure the quality of each investment. The investments are from established firms that have deep experience executing similar strategies outside of the QOZ structure.
“Our goal with the marketplace is to help investors manage risks by providing increased transparency,” said David Wieland, Realized’s CEO. “With visibility into a sponsor’s track record, fundraising progress, risk management strategies and other pivotal data points, Realized’s QOZ marketplace helps ensure that investors are equipped to make informed investing decisions.”
Once chosen, Qualified Opportunity Zone Funds can be purchased individually, in groups or bundled with other commercial real estate investments into a tax-optimized diversified portfolio in an attempt to maximize after-tax risk-adjusted returns. Clay Schmidt, investment consultant with Realized 1031, offers a recent example of an OZ fund success story.
“We worked with sibling real estate developer/owners who sold a property together which had a fair amount of basis left in it,” Schmidt tells GlobeSt.com. “They learned about OZs from their accountant and began doing research including attending some local conferences and seminars. It just so happened that Inland was working on OZ fund in St Paul, MN very close to where the brothers live. They really liked the location and the development partner that Inland was working with. Fairly unique situation in the sense that we had a project near them but even without that, I think there is a chance they still would’ve invested in another option with us.”
These investors are a good example of being able to select a property that very closely fit their preferences and goals within a given marketplace. That is, investors would be able to compare and contrast and make decisions on investments that best fit with their portfolio and preferences.