Investing in Opportunity Funds

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Investing in Opportunity Zone Funds to offset real estate or other capital gains. Opportunity Funds gather investor capital to purchase, rehabilitate, construct and or hold and collect income from real estate in designated distressed or impoverished areas of the United States. Excluded are golf courses, casinos, liquor stores, and a few other vice related real estate investments.


An Opportunity Zone is an economically-distressed community where these new investments, under certain conditions, may offset IRS taxes. Localities qualify as Opportunity Zones if they have that designation by the state and are certified by the Secretary of the U.S. Treasury by the Tax Cuts and Jobs Act on December 22, 2017.

This is a  tax benefit to high net worth investors. First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026.   If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain.  If held for more than 7 years, the 10% becomes 15%.  Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.

Locations of the zones is designated by census tract within boundaries set by the 2017 Act
 2018-48 (PDF) and in 2019-42 (PDF).  Further, a visual map of the census tracts designated as Qualified Opportunity Zones may also be found at Opportunity Zones Resources.

A Corporation or LLC can become an Opportunity Zone Fund by filing with the IRS and investing half its interests into census tract projects that can be land, residential, commercial and multi use. Most of these Funds are new and according to Preqin's report only thirty percent of the managers are experienced managers. Investing in distressed locations, blighted rural land and failed projects is dirty hard work to make a profit on the real estate investment. Fund Managers approach the very wealthy who have capital gains to offset into such a fund. Investors must have a minimum of a million dollars in assets not including their primary residence, This unregulated investment is of the highest risk for capital loss rather than gain, it only feels like a vehicle to avoid paying income taxes in a given year, which could be pushed out as far as 12/31/2026

The highest number of QOF projects are in the Western States. The majority of projects are multi family residential and commercial. There is no certification for these funds. To be successful, to stay afloat and not have the fund disqualified they must be: 1. savvy accountants to follow all the Internal Revenue Service's rules and regulations and 2. be excellent at choosing locations 3. be knowledgeable in construction, trades, operating rentals, finding tenants, and have solid legal knowledge of leases, mortgage lending, and operating the properties. It's difficult to imagine a start up company being able to expertly manage a variety or real estate holdings in different locations.  

Buyer be careful. 

Your Loan Process

I'm here to guide your loan process.

The mortgage loan application is a difficult process.
There is a list of paperwork you gather upfront
You must send the papers in clear readable pdf format.
After you send the list,
 another list may be generated from questions that arise from your information.
You must open emails and e sign paperwork several times
There is a bunch of information you don't want to share, or don't understand.

I'm here to explain why we need the information, where you can access the
correct format and how to get the lowest rate, most suitable loan, in the fastest
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Heggstad Petition to Fix Real Estate Title

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Refinance Transaction with cloud on title. In order to move forward with cash out refinance transaction there is a gap where the grandparents Living Trust (now deceased) did not properly file a transfer deed into the name of the Trust. Filing a Heggstad type petition should be able to clear the gap in the chain of title to move forward with a home mortgage.

Estate of Heggstad, (1993) 16 Cal.App.4th 943 

Heggstad Petition can be used to clear a cloud on title caused by failure to record a family transfer deed from whatever personal form of ownership into the name of a Revocable Living Trust.
A Revocable Living Trust is an entity that must be very specific in the description of what assets the Trust owns or holds or covers. The Trust Agreement cannot just state that the Living Trust includes all my assets, or all my property to be able to file a Heggstad Petition. The Trust Agreement must have the legal address of subject real estate property and in some cases the APN number as well (if there is some question as to address or there has been a lot split).

To prove a Heggstad Petition the original Living Trust Agreement is filed in Probate court hearing for a decision. In the Trust Agreement the settlor declared that they transferred certain property to his/her Trust with an exacting list that property in a written schedule attached to the trust instrument. The Death Certificates of those parties who were settlors of the Trust are also required with the petition.

Setting up a Living Trust is a simple affair. The problem is in following up with recording the deed to real estate and keeping up with the lives of the original settlors. Often family members don't go back to the same attorney, as time has passed, they moved away or they don't seek legal advice at all. 

IF after the death of the settlor(s), record of title to subject real property that was described on the trust asset schedule remained in that decedent's name as an individual, or as Joint Tenants or whatever but not in the name of the Trust. The settlor(s) failed to pay for and record a deed formally conveying that property to the trustee of the trust. 

The Heggstad court held that the settlor's written declaration that the property was held in trust was sufficient to create a trust in the subject real property, without the need of a formal conveyance of title to the settlor as trustee during the decedent's lifetime. Therefore, that property was held to be an asset of the trust and not subject to disposition through the decedent's will. 

Another related recent case is  Ukkestad v. RBS Asset Finance, Inc. (2015) 235 Cal.App.4th 156 
Ukkestad clarifies the interpretation of a Heggstad petition to confirm a trust's holding of real property. 

A recent California Court of Appeal decision Carne v. Worthington (2016) 246 Cal.App.4th 548, distinguished Heggstad referring to it numerous times. Carne points recent light on understanding the principals raised in the Heggstad and Ukkestad decisions. Liebler created a Revocable Trust of which he was sole trustee in 1985 and recorded the Revocable Inter Vivos Trust with the county recorder on title of the property. In 2009 Liebler sets up a new Trust. He transferred a list of properties into a new Revocable Living Trust, thus leaving the real property open to heirs disputing the transfer.  The heirs disputed that Liebler had not changed the deed to the new Trust name. Carne case shows how disputes over trusts happen if one is not careful in executing and recording all the deeds to property that are to be part of a trust. The Carne case also shows how a relative can try to take advantage of a failure to record a deed and how trust litigation happens and can take years to resolve. When the creator of the trust becomes incapacitated or deceased, the designated Successor Trustee takes over the administration of the trust, and hence, all of the trust

Intent of Trustee should be spelled out the legal address and or APN number not just a generic - all bank accounts and all real estate.
A  2007 case, Sterling v. Taylor, which clarifies a legal principle: "That is certain which can be made certain." The court explained this with the following: "If a memorandum includes the essential terms of the parties' agreement, but the meaning of those terms is unclear, the memorandum is sufficient under [the law] if extrinsic (i.e., outside) evidence clarifies the terms with reasonable certainty and the evidence as a whole demonstrates that the parties intended to be bound."

This is NOT legal advice.
I am explaining a logical process to clear up a preliminary title report to be able to move forward with a home loan. This process would take a minimum of ninety days, as a hearing must be scheduled. I can suggest some good attorney in your area, just call me