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Tax Free Returns in 121 months - Opportunity Zones

Imagine if you made a $100,000 investment at 50 years young, and had a tax free $1.3 million tax free gain by age 60 years old. Wouldn't this beat the S&P index fund you presently call retirement?

Here's the math. Buy a $500,000 property, using $400,000 in debt, and $100,000 equity investment. Lease it for 10 years NNN. Cost segregate the property = 10 year depreciation = $50,000/year minimum depreciation. If the building generates 10 cap/$50,000 per year in Net Income, this will amortize the debt. You will gain $50,000 per year x 10 years = $500,000 TAX FREE which will pay off the $400,000 loan in full by year 10. This will also leave a nice $50,000/yr tax loss which you can reduce other income taxes with.

If over these years, the rent escalates at a 3% rate, in year 10 the lease is $67,195/year. At ann 8 cap rate, the building is then worth = $839,947. When you sell it, it will be 100% gain (because of the depreciation). You will declare an $839,947 gain with $0 in taxes -- because of Opportunity Zone tax treatment.

This means you made $1,239,947 in gains on a $100,000 initial investment. Check our math and tell us where there's a mistake? If not. Let's talk, find you an Opportunity Zone investment for your retirement?

ask DIRT.

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