Investors have 180 days after realizing capital gains to invest it in an Opportunity Zone fund. Both the gain and the associated tax are invested in to the fund. Capital gains of any kind, including gains from stock or real estate, can be invested. Unlike 1031 exchanges, only gains are invested, allowing investors to extract their original basis. If the capital gain came from a partnership, the investor has until the end of the calendar year and 180 days into the following year to invest.
By investing their capital gains, investors get to defer their capital gain taxes realized today until 2026. This enables the investment of taxes that would have otherwise been paid to the government.
If the capital gains are left in an Opportunity Zone fund for 5 years, a 10% step up in basis is applied (tooltip on step up in basis: a step-up in basis readjusts the value of an appreciated asset, providing a new cost-basis and lowering the tax liability), which equates to a 10% reduction in taxes. After the capital gains are invested for 7 years, an additional 5% step up is basis is applied, totalling in a 15% basis step up. With 2026 being the year tax is owed, 2019 is the last year to be invested for 7 years in an Opportunity Zone fund and receive a 15% basis step up. 2021 is the last year to receive a 10% basis step up.
After 10 years of being invested, all appreciation made within the opportunity zone investment can be realized tax free. That’s 100% forgiveness of taxes for gains made in the OZ, resulting in a large boost (projected around 30%) to returns.
All Four Points funds have a 10 year hold requirement, which realizes all Opportunity Zone tax benefits.
After investing in value-add housing for over a decade, Four Points Funding started investing in greenfield development across Colorado starting in 2019. Four Points Funding controls all aspects of the investments including sourcing, zoning, entitlements, development, and long-term management. The Opportunity Zone portfolio totals 11 properties consisting of 809 units of new development and 84 units of value-add apartments.
Grand Junction, CO
Opened 2022. 96 unit apartment development that borders the Colorado River and Las Colonias Park. Los Colonias is a new $14M city investment that includes green space, an amphitheater, lakes and river access. Project fully leased in 60 days of opening and is fully stabilized.
Glenwood Springs, CO
Opened 2022. 100 unit apartment development that borders open space and the RFTA Park & Ride stop, which provides direct transports to and from the airport, Aspen, Carbondale and Snowmass. Project fully leased within 60 days of opening and is fully stabilized.
Value-add purchase of existing 54 unit apartment development. Upgraded units and property management achieved significant improvement in NOI. Project is fully stabilized.
Value-add purchase of existing 32 unit apartment development. Upgraded property management and improved NOI. After fully stabilizing the project we sold in 2023.
Opened 2023. Development of 89 units located adjacent to trailheads and the Animas River south of downtown Durango.
Southeast Colorado Communities
Springfield, Olney Springs, Las Animas, & Granada, CO
Opened 2023. 64 units of newly constructed homes across 4 communities in southeastern Colorado markets. These units are provided with strong cooperation of the municipal governments.
Buena Vista, CO
Under construction. Planned 90 units across 45 parcels in a master subdivision. Each parcel will have a single-family home with 3 bed / 2.5 baths, as well as a 1 car detached garage with an ADU above it. Expect to begin leasing in Q1 2024.
East School Apartments
Opened 2023. An elementary school converted to 17 studios, a 3,000 square foot industrial kitchen, and additional workspace. This project was made possible by the Colorado Office of Economic Development and Historic Tax Credits.
Grand Junction, CO
Under construction. Planned development of 122 units, an “agri-hood” with a 2-acre working farm.
Estes Park, CO
Under construction. 94 unit apartment development adjacent to hiking and mountain biking trails. Leasing planned for late 2024.
Idaho Springs, CO
Planned development. Ground-up development of 119 units of multifamily residential apartments. Fully entitled and own the land. Planned to begin construction Q3 2023.
Hospitality investments focus on overnight stays adjacent to outdoor access. The portfolio totals 472 accommodations consisting of 198 RV sites, 42 cabins, 29 tiny homes, 43 glamping units, 60 campsites and 100 hotel rooms.
Trail and Hitch
Trail and Hitch is a tiny home village and RV park adjacent to mountain biking, hiking, hunting, off-roading, and downtown Meeker.
BV Overlook Camp & Lodging
Purchase, expansion and rebrand of the Buena Vista KOA. The site has some of the best views and outdoor access in Colorado.
Desert Reef Hot Springs
Desert Reef has several hot spring pools and lodging adjacent to the Royal Gorge and the Great Sand Dunes.
Trailhead Cabins & Lodging
Trailhead has A-frames, cabins, a sixteen unit motel, and a restaurant downtown Meeker.
Cedar Creek Lodging & RV Park
Purchase, expansion and renovation of an existing RV Park. The site is a mix of long-term RVs, short-term RVs, tiny homes and glamping.
CampV is 120 acres of beautiful desert, art, trails, and lodging situated between Telluride and Moab.
Adjacent to the Eddy Apartments, the property is on the Colorado River offering guests to choose from 16 Airstreams, 8 tiny homes, and 40 RV spots for nightly accommodation.
Super 8 Motel
Purchase and renovation of the Super 8 just south of downtown Durango. This is our first traditional hospitality investment and has 85 rooms with great access to the Animas River and trailheads.