THE PIONEERS OF
OPPORTUNITY FUND
DEVELOPMENT.
Opportunity Zones were passed in 2018, making this venture
very new and still in its early stage. Allowing you to take
advantage of being an early market player.
Right now is the time to set up an OZ Fund. The marketspace
needs it. Your business NEEDS it! We encourage you to embrace
OZ Funds. As the picture begins to form, and your imagination
beings to wonder about what an OZ fund could do for your
business. When you are ready. Eazy Do It Opportunity Funds is
here to help you get your started.
Eazy Do It Opportunity Funds is the country’s leading OZ Fund
Development Company. We set up the second qualified
opportunity fund in the country to open, the first business
focused oz fund in the country to open and are currently
responsible for the development of over $15Billion in OZ Funds.
Moreover two of our developed funds have been recognized as
a Top 25 Fund Manager and Eazy Do It is recognized as a
National Top 10 OZ Expert.
David Sillaman
TOP 10 OZ EXPERT
Eazy Do It Opportunity Funds is the country’s
leading OZ Fund Development Company. We set
up the second qualified opportunity fund in the
country to open, the first business based oz fund
to open and are currently responsible for the
development of over $15Billion in OZ Funds.
Moreover two of our developed funds have been
recognized as a Top 25 Fund Manager and Eazy
Do It is recognized as a National Top 10 OZ
Expert.
What constitutes success? Just like Benjamin
Franklin believed, at EazyDoIt, we believe that
well-designed systems are a precursor to success.
That’s why we invest the proper resources to
infuse proactive planning, lessons learned, and
sound methodology that makes the difference
between success and failure.
We work with clients to develop structured turnkey opportunity fund solutions for businesses and
real estate development projects which produce
positive economic, social, and environmental
returns for investors, stakeholders, and the
community.
I invite you to experience an Eazier way!
Sincerely,
“An investment in
knowledge always pays
the best interest.”
― Benjamin Franklin”
AS SEEN IN
FACT SHEET
*COURTESY OF WHITE HOUSE FACT SHEET
ENCOURAGING INVESTMENT: Opportunity Zones will spur private-sector investment to
revitalize hurting communities and unleash their economic potential.
●
●
●
In 2017, President Trump signed the Tax Cuts and Jobs Act, which established
Opportunity Zones to incentivize long-term investments in low-income communities
across the country. These incentives offer capital gains tax relief to investors for new
investment in designated Opportunity Zones.
Opportunity Zones are anticipated to spur $100 billion in private capital investment.
Incentivizing investment in low-income communities fosters economic revitalization
and job creation and promotes sustainable economic growth across the Nation.
LIFTING UP COMMUNITIES: Opportunity Zones help drive economic growth and lift up
communities that have been left behind.
●
●
●
●
●
Opportunity Zones are a powerful vehicle for bringing economic growth and job
creation to the American communities that need them the most.
On average, the median family income in an Opportunity Zone is 37 percent below
the State median.
The average poverty rate in an Opportunity Zone is more than 32 percent, compared
with a rate of 17 percent for the average United States census tract.
More than 8,760 communities in all 50 States, the District of Columbia, and 5
Territories have been designated as Opportunity Zones.
Nearly 35 million Americans live in communities designated as Opportunity Zones.
CREATING OPPORTUNITY FOR ALL: President Donald J. Trump is encouraging investment to
create opportunity in distressed communities.
●
●
●
●
●
●
●
In 2018, President Trump signed an Executive Order establishing the White House
Opportunity and Revitalization Council.
The Council is chaired by the Secretary of Housing and Urban Development, Ben
Carson, and is comprised of 16 Federal agencies.
The Council is engaging all levels of government to identify best practices and assist
leaders, investors, and entrepreneurs in utilizing the Opportunity Zone incentive to
revitalize low-income communities.
The Council is improving revitalization efforts by streamlining, coordinating, and
targeting existing Federal programs to economically distressed areas, including
Opportunity Zones.
Lack of coordination and targeting has led to cumbersome applications, program
waste, and ineffective benefits.
The Council will consider legislative proposals and undertake regulatory reform to
remove barriers to revitalization efforts.
The Council will present the President with a number of reports identifying and
recommending ways to encourage investment in economically distressed
communities.
QUALIFIED OPPORTUNITY
ZONES AND FUNDS
INTRODUCTION
“We’re providing massive tax incentives for private investment in
these areas to create jobs and opportunities where they are needed
the most.”
President Donald J. Trump
OPPORTUNITY
FUNDS
A BLUE OCEAN WAITS YOU.
DISCOVER. DEVELOP. DEPLOY.
The world of investing has
fundamentally changed. Recent tax
laws and changes have opened a new
blue ocean of potential investors. Like
any opportunity in life, timing is critical.
There is a limited window of time to
capitalize on opportunity funds before
the market becomes too saturated.
A VISION WITH
A MISSION
The Opportunity Zone Investment program is structured to promote
development in economically distressed communities by providing
tax incentives for Opportunity Zone Investing. Investors divert their
investment gains – tax-deferred – into a qualified Opportunity Fund
that invest in businesses and property development within a
Qualified Opportunity Zone. Additional tax incentives are available
the longer the Opportunity Zone investment is held.
AN
OPPORTUNITY
WORTH SEIZING
$6,100,000,000,000
exists in eligible capital gains
that could be invested in
Qualified Opportunity Funds
Opportunity Zones were
passed in 2018, making this
venture very new and still
in its early stage. Allowing
you to take advantage of
being an early market
player.
Right now is the time to set
up an OZ Fund. The
marketspace needs it.
The U.S. currently holds $6.1 trillion in
unrealized capital gains, representing a
significant untapped resource for economic
development. With the introduction of the Tax
Cuts and Jobs Act of 2017, Opportunity Funds
were created as an investment vehicle for
targeted areas called Opportunity Zones. This
allows for the benefit of investors in
Opportunity Funds with certain tax incentives,
and for underserved communities within with
Opportunity Zones, where the funds can be
utilized to fund projects that will add value to
the communities that need it most.
The program establishes a mechanism that
enables investors with capital gains tax
liabilities across the U.S. to receive favorable
tax treatment for investing in Opportunity
Funds that are certified by the U.S. Treasury
Department. The Opportunity Funds use the
capital invested to make equity investments in
businesses and real estate in Opportunity
Zones designated by each state with over
8,700 qualified locations.
When realizing the tremendous benefits for all
those involved, many are finding themselves
seeking the information and expertise to start
their own Opportunity Fund or to invest in an
existing fund to enjoy the tax incentives and
contribute to economically distressed
communities.
That’s where you come in…
IMPACT INVESTING
ACROSS THE US
8,700 Designated Opportunity Zones
EazyDoIt Developed Fund Locations
30 DAY
Turnaround
Or Less
30+
Developed
Funds
$18+
Billion and
Counting
HOW OPPORTUNITY FUNDS
WORK
THE TEN-YEAR INCENTIVE.
Full step-up in basis to fair
market value at time of exit.
All gains Tax Free.
Tax on original capital
gain is reduced by 10%
-10%
0
Roll over gain into
Opportunity Fund
(defer tax on gain)
2020
2025
Year 6
-15%
Year 10
Taxes on capital
gains is due at 90%
Year 5
Tax Break Reduction
-100%
2026
OZ Yearly Timeline
2030
THE
UNTAPPED
POTENTIAL
WHAT’S YOUR
NICHE?
Any Nature. Any Diversity.
Limitless Potential
• Real Estate
• Energy
• Education
• Retail
• Manufacturing
• Community
Development
• Technology
• Hospitality
• Biotech
• Film
•Undeveloped/New
Land
• Aerospace
• Aviation
• Utilities
• Infrastructure
• Industrial Sectors
• Media
• Cannabis
• Transportation
• Financial Services
SETTING UP A QOZ
FUND
To become a Qualified Opportunity Zone Fund, the
IRS states that an eligible taxpayer must simply selfcertify by completing a Tax Form 8996 and
attaching the form to their federal income tax
return for the taxable year. Through this process,
no further action or approval is required by the IRS,
which makes the process relatively easy and
straightforward.
However, this also means that very few guardrails
are in place for these fund managers aside from
applying the proper hold period and investing at
least 90% of the Fund’s holdings within the
designated Opportunity Zone boundaries. This
makes it especially important that investors vet
fund managers to ensure their investment capital is
being properly deployed.
“According a recent study by Forbes
the average cost to set up a Qualified
Opportunity Fund is $95,000”
TYPES OF
OPPORTUNITY
FUNDS
There are FOUR types of Qualified Opportunity
Funds.
1. C - Corp Based Opportunity Funds selling
stock to capital gain investors.
2. Partnership based Opportunity Funds selling
membership units to capital gain investors.
These funds are typically LLC based and used
for Real Estate and smaller friends & family
funds where a everyone receives a K-1 at the
end of year.
3. REIT. (Real Estate Investment Trusts) REITS
use a two tier structure for a OZ fund. The
core fund is a C-Corp that invests into a
holding company, typically an LLC. This
holding company holds the real estate. REIT
based OZ funds have additional REIT
compliance it must adhere to.
4. Public Opportunity Funds. These are OZ funds
that are listed on public markets. These funds
are usually consider pink sheet funds.
WHAT IS ZONE
STOCK?
QOZ Stock is defined as any stock in a domestic
corporation which meets the following
requirements:
1. The stock is acquired by the QO Fund after
December 31, 2017, at its original issue (directly
or through an underwriter) solely in exchange
for cash;
2. At the time the stock was issued, the
corporation was a QOZ Business or for a new
corporation, it was formed for purposes of
being a QOZ Business; and
3. During substantially all the QO Fund’s holding
period of the stock, the corporation was a QOZ
Business.
ADDITIONAL OZ FUND
INFORMATION
SEC
RULE 506 OF REGULATION D
Majority of Opportunity Funds are
Regulation C Offerings.
IMPORTANT NEED TO KNOW
INFORMATION!
ADDITIONAL STATE
BLUE SKY LAWS
Under Rule 506(c), a company can broadly solicit
Blue sky laws are state regulations established as
and generally advertise the offering and still be
safeguards for investors against securities fraud.
deemed to be in compliance with the exemption
The laws, which may vary by state, typically
requirements if:
●
require sellers of new issues to register their
offerings and provide financial details of the deal
The investors in the offering are all
and the entities involved. As a result, investors
accredited investors; and
●
The company takes reasonable steps to
have a wealth of verifiable information on which
verify that the investors are accredited
to base their judgment and investment decisions.
investors, which could include
reviewing documentation, such as W-
Day 1
Understanding Blue Sky Laws
2s, tax returns, bank and brokerage
Blue sky laws—which serve as an additional
statements, credit reports and the like.
regulatory layer to federal securities rules—
usually mandate licenses for brokerage firms,
Purchasers of securities offered pursuant to Rule
investment advisors, and individual brokers
506 receive "restricted" securities, meaning that the
offering securities in their states. They require
securities cannot be sold for at least six months or a
that private investment funds register not only in
year without registering them.
Companies that comply with the requirements of
Rule 506(b) or (c) do not have to register their
offering of securities with the SEC, but they must file
what is known as a "Form D" electronically with the
SEC after they first sell their securities.
their home state but in every state where they
wish to do business.
Issuers of securities must reveal the terms of the
offering, including disclosures of material
information that may affect the security. The
state-based nature of these laws means each
jurisdiction can include different filing
requirements for registering offerings. The
process usually includes a merit review by state
agents who determine whether the offering is
1
balanced and fair for the buyer.
7
3 REASONS WHY
YOU SHOULD SET
UP A OZ FUND
TIMING: Like any harvest in life there is a time,
place and season to maximize a seeds potential.
Right now you will never have a better time to set
up a OZ Fund than now. With less than 5% of all OZ
Funds being business focused you have a full blue
ocean ahead of you and being the first OZ Fund in
your niche.
SUPPLY / DEMAND: We are currently in a inverted
Supply - Demand yield curve.
●
DEMAND: The current potential investment
demand ceiling for the OZ Fund Marketspace
is $6.1 Trillion. That’s how much capital gains
there was last year alone. The Dept of
Treasury’s own announcements anticipate
$250B to be invested in OZ Funds in 2019.
●
SUPPLY: As of writing, there is an estimated
300 Total OZ Funds in the marketspace. With
a total market cap estimated to be $80B
RETAINED EQUITY IN YOUR BUSINESS: When an
OZ Fund invests into your business it does so by
purchasing equity. However, unlike a Venture
Capital deal, the OZ Fund doesn’t want to own your
equity long term. As a matter of fact. It wants your
business to buy it back over a 10 year period of
time.
OZ FUNDS
FOR 1031 FUND
ADMINISTRATORS
As a 1031 Fund Administrator, you may be interested in
raising capital to for your client's business. The 2017 IRS
Tax rule changes have enabled additional tax break called
Opportunity Zones where businesses can provide new tax
breaks to investors investing in them. The tax rules that
the IRS has laid out with regard to Opportunity Zones
have been both complex, confusing and evolving as they
have been updating these rules ever since they were
originally announced as part of the 2017 tax rule changes.
The IRS has designated certain low and middle income
areas in cities all across the Unites State as qualified
Opportunity Zones that can take advantage of this
program under certain rules and guidelines of the 2017
IRS Tax law. While some 1031 Fund Administrators have
been skeptical about the longevity and validity of the
program, other more progressive and dynamic business
owners and managers have seen “Opportunity Zones” as
a way for their clients to both reduce and postpone (5
year - 10%) their current capital gain tax requirements,
and in many cases completely eliminate their future
capital gains taxes on their new OZ Fund investment
(While holding it for 10 years). Additionally, investors
who are taking profits from their stock sales, can also
take advantage of these “Opportunity Zone” tax benefits,
as long as they are invested in a qualified opportunity
zone fund investment.
OZ FUNDS
FOR 1031 FUND
ADMINISTRATORS
Too many 1031 Fund Administrator and investors initially looked at the
program as some sort of “IRS Tax Gimmick”, but when they kicked the tires
and looked under the hood and they then realized that this program will
benefit both them as an investor, the fund manager and the fund; all at
the same time. A Win-Win-Win scenario for all involved. Not only that, the
investment dollars will be going into these low and middle income areas of
the county to help real estate deals that previously were having a difficult
time attracting capital, but the investors get beyond what a 1031 exchange
would have given them in postponing their capital gains taxes and by
providing all these additional benefits.
As 1031 Fund Administrator, you are trying to educate your investors on
the profitability and validity of your investments and projects. The hardest
part is that the IRS has rolled out the “Opportunity Zone” IRS Tax rules and
they’ve been updated a few times since their inception. When you are
pitching a new investment in your project, you need to make investors
aware that there is a difference in tax consequences for a Opportunity
Zone investment inside or outside the Ozone. It is not all apples and apples
comparison. It’s is truly an apples and oranges comparison.
So know that you know a little about Opportunity Zones, how can I apply
this knowledge to 1031 Fund Administration business and investments?
First thing you need to do is fully read this e-book on Opportunity Zones.
Why is the knowledge of this so important to your project? First of all,
Opportunity Zones is one of the most significant changes to IRS Tax law
that has happened in the last 10 years. Many don’t know most of its
nuances and specifics, and thus don’t take them into account when making
their own business decisions.
1031 FUND
ADMINISTRATORS
-WHO WILL BENEFIT THE MOST?
1. A qualified investor who has just made a Real Estate or
stock sale and have a current capital gain tax issue. If
they invest it all in a Qualified Opportunity investment
fund, by holding their investment for 5 years; they will
reduce their tax base by 10% and if they hold it the new
investment for 10 years or more, they will not have to
pay capital gains on the future profits and capital gains
from this new investment. This can be a significant
savings when you analyze it against a typical 1031
exchange in Real Estate. 1031 have currently not been
available to non-real estate capital gains (i.e Stock Sales).
2. Your client, a business owner is interested in raising
capital to fund their business that resides in an
opportunity zone. If a business owner creates a Qualified
Opportunity Zone fund, they need to make potential
investors aware that if they invest in their project which
resides in a Opportunity Zone. The investor will be able to
receive the capital gains tax breaks of 5 years – 10%, and
by holding it for 10 years or more, not paying capital
gains on the new current investment. This will make
their attractiveness of their investment into their project
different when comparing it to non-opportunity zone
investments that do not provide that same tax benefits.
When you analyze the IRR of opportunity zone project
with the IRR of a non-opportunity zone project, you can
see the net difference in taxes paid or not paid at the end
of the investment cycle.
OZ FUNDS
FOR 1031 FUND
ADMINISTRATORS
EXAMPLE SCENARIO #1
A qualified investor A has made a Real Estate Sale
and made $1,000,000 in profit from the sale of their
property. They could use the 1031 rules to take that
profit, invest in another property of equal or greater
value and postpone the capital gains on that money.
Alternatively, if they invested the $1,000,000 in a
Opportunity Zone fund; they can postpone by 5 years
them paying their capital gains tax by 10%; and if
they hold the opportunity zone investment for a total
of 10 years or more, they would pay ZERO capital
gains on the future investment gains from that OZ
investment.
EXAMPLE SCENARIO #2
A qualified investor B has made a Stock sale and
made a $500,000 profit on the sale. There are no
1031 tax rules allowing the client to postpone paying
taxes on their capital gains. By client B investing
these profits into a Opportunity Zone property, a
Opportunity Zone business or Qualified Opportunity
Zone fund, they can postpone by 5 years paying their
capital gains tax by 10% and if they hold the
opportunity zone investment for a total of 10 years
or more, they would pay ZERO capital gains on the
future investment gains from that OZ investment.
OZ FUNDS
FOR 1031 FUND
ADMINISTRATORS
EXAMPLE SCENARIO #3
Your client wants to purchase a warehouse for their
business and operations for $5,000,000 in an Opportunity
Zone. They have $1,200,000 to put down from the sale of
another Real Estate sale that they sold. All of it is profit
and subject to capital gains unless they do a 1031
exchange or invest in an Opportunity Zone property.
The problem is that the client has gone through a divorce,
their credit is bad and even though they have the down
payment, they do not believe they can qualify for a
mortgage. If they invested $1,200,000 in the project, they
could they can postpone by 5 years them paying their
capital gains tax by 10% and they hold the opportunity
zone investment for a total of 10 years or more, they
would pay ZERO capital gains on the future investment
gains from that ozone investment.
OZ FUNDS
FOR 1031 FUND
ADMINISTRATORS
EXAMPLE SCENARIO #4
Your client wants to acquire land to build a facility that is in lowor middle-income area of their city that is within an Opportunity
Zone. They are interested raising capital to acquire it but have
never raised capital themselves before. The business model and
proforma projections show that the project will cash flow. By the
company creating their own Qualified Opportunity Zone fund (A
separate corporation), it will allow them to raise money for the
acquisition. Opportunity Zone Fund is designed with the intent
of investment in a targeted company, but also with the intent to
be paid back with a certain rate of return to the investor during a
set investment timeframe. Because management of the fund is
also typically the management in targeted company, it can be up
to the fund managers and corporate management whether they
keep or pay back the investors of their investment.
Opportunity Zones are an avenue for your investors to take their
capital gains and postpone them for 5 years and remove future
capital gains liabilities by investing in your opportunity zone
investment for over 10 years or more. It is important whether
they are investing in an opportunity zone or setting up a qualified
opportunity zone investment fund, they need a professional tax
advisor to guide them on how their investment plays out with
regard to how capital gains are treated and when they are able to
do things based upon current IRS Tax law. This is not a simple tax
rule that they can easily research online and should seek out the
guidance of educated tax profession allowing them to make the
correct decisions about their money.
WHAT YOU WILL NEED
FOR A SUCCESSFUL
OZ FUND
MARKETING |
DESIGN
• Professional Logo
Design
• Brand Style Pack
✔Logo Files
For All
Media
✔Letterhead
✔Business
Cards
✔Custom
Imagery &
Icons
• Graphical PPM
• Project Pitch Deck
• Social Media
✔Facebook
✔LinkedIn
✔Instagram
✔Twitter
• Fund Summary
Flyer (1 pager)
• Promo Video
• Press Releases
• Fund Directory
Listing
WEB | IT
FINANCIAL
LEGAL
• IT Consultation
✔Domain Setup &
Purchase
✔Web Hosting
✔DNS
Management
✔SSL Certificate
Acquisition
• Forecasted Income
• Legal Formation / IRS EIN
Number
• State & City Registration
• Corporate Governance (if
stock based)
✔Articles of Inc
✔Bylaws
✔Audit Committee
Charter
✔Compensation
Policy Charter
✔Excellence Charter
✔Executive
Committee
Charter
✔Finance
Committee
Charter
✔Nominating
Committee
Charter
• Website Design
✔Graphics &
Brand Ready
✔Responsive –
Mobile Ready
✔Integrated
Social Media
✔Subscription
Forms & Emails
✔Deal Box Portal
✔Graphical PPM
Statements
• Forecasted Use of
Proceeds
• Forecasted VC
Valuation
• Forecasted DCF
Analysis
• Financial
Administrator
Accounts
• Investment Highlight
• Operating Agreement
(if LLC based fund)
• Private Placement
Memorandum
• Term Sheet
• Subscription Agreement
• 3rd Party Fund
Administration
• Investment Manager
Agreement
• SEC Form D
(Due 15 Days after date of 1st
Investor)
THE NATIONAL LEADER IN
OZ FUND DEVELOPMENT.
(855) 693-8635 | www.EazyDoIt.com |
info@eazydoit.com