Architectural rendering above for illustrative purposes only, and is a project that is owned by an affiliated real estate company. Final design subject to change.
Real estate can be a valuable addition to your portfolio.
Cash flow is real estate’s net income after operating expenses and mortgage payments. Cash flow can grow over time, especially as mortgages are paid down.
Depending on the type of real estate and its location, this is an investment that can increase over time, potentially leading to a higher profit when it comes time to sell.
Because real estate is, by and large, non-correlated to other asset classes, it can help lower portfolio volatility while balancing out your risk.
*Real estate investment are subject to various risks, including fluctuations in property values, higher expenses or lower cash flow than expected.
Why Private Real Estate Equity Investments?
Private equity allows you to purchase an ownership stake in private companies, versus public companies listed on the stock markets. Integris Real Estate Investments puts you in direct touch with potential private equity funds and investments.
In return, you can benefit from the following:
*Architectural rendering above for illustrative purposes only, and is a project that is owned by an affiliated real estate company. Final design subject to change.
THE POTENTIAL FOR HIGHER RETURNS.1
Private equity funds do come with a higher degree of risk. But they can potentially also provide higher returns versus public investments. Long-term returns have represented a premium to public equity performances.
Private equity helps balance an investment portfolio. Research indicates that return correlation between private equity and public markets tends to be low. These investments can also improve your portfolio’s risk/reward profile.
Again, in comparison with public stocks and markets, private equity investments tend to be less volatile. They appreciate based on solid financials, versus emotional decision-making on the part of investors.
Sources: 1. https://www.nerdwallet.com/article/investing/private-equity-investments. | 2. efront. Private Equity in the COVID-19 Year. December 2020.
What are Certain Benefits of Investing in Qualified Opportunity Funds?
The opportunity zone program was created as part of the Tax Cuts and Jobs Act of 2017, with the goal of incentivizing investments into community improvements in certain designated low-income census tracts. The program encourages investors to invest their capital gains from the sale or exchange of property into qualified opportunity funds. These funds then put the equity raised toward designated qualified opportunity zones, which are targets for economic revitalization.
In return for investing your qualified capital gains into qualified opportunity funds, you can potentially receive:
The taxable capital gain you invest into a qualified opportunity fund generally (subject to certain requirements) won’t be recognized until December 31, 2026 (payable when returns are filed for 2026, which is April 15, 2027, for individuals, but may be other dates for other types of entities), or until an interest in the fund is sold or exchanged (whichever takes place first). This means you generally won’t have to pay capital gains taxes with respect to the qualified capital gain that you roll into a qualified opportunity fund until your 2026 taxes are due.
If an investment in a qualified opportunity fund is held 10 years or longer, your investment’s tax basis can be increased to its fair-market value when you sell or exchange it. This means that your qualified opportunity fund investment can appreciate tax-free, and you won’t pay capital gains taxes on the appreciation amount when you sell or exchange your interest (provided that your original deferred capital gain is subject to taxation as described above).
In a typical real estate investment, depreciation used to reduce taxes due on income during the holding period is recaptured upon sale, triggering a taxable event. With respect to capital gains from certain sales or exchange of a qualified opportunity fund investment after a 10-year holding period, depreciation is not recapturable, eliminating tax on some or all of the cash flow generated by the investment.
Important Note: The state, local and other tax implications of a qualified opportunity zone investment are uncertain because there is a lack of precedent and limited guidance related to QOZs. Investors are strongly encouraged to discuss compliance for certain Tax Code requirements with their tax advisers.