Ep #223: The first public Opportunity Zone REIT in the USA – with Brandon Lacoff
April 2, 2019
This episode of the Real Estate Investing for Cash Flow Podcast features Brandon Lacoff, CEO and Founder of the Belpointe REIT, a public equity investment firm and the first public opportunity zone REIT in the US.
Brandon is also the co-founder Belray Capital, a real estate and investment firm which Belpointe acquired in 2011. Belpointe has created a name for itself in luxury condominium developments and class A apartment communities. Belpointe also controls Belpointe Asset Management, LLC, a financial asset management firm that manages over $1 billion in tradable securities.
Brandon gives us an industry leader’s insight on Opportunity Zones and how it can benefit all stakeholders, from investors to developers to the communities themselves.
“The opportunity zone rules are a little bit complicated, but if used correctly, are huge upside for both investors and the right developer and real estate investors. It doesn’t make a bad deal a good deal. It allows good deals to be able to raise more capital.”
“[Opportunity zones] also give them the ability to get the tax benefit but also invest in communities that need the investment, which some people call impact investing. We also call it do good while doing good and giving back to other communities that were passed by in the last ten to twenty years for investment dollars.”
“The biggest risk is over-leveraging, which we’re taking a more conservative approach when it comes to leveraging especially when the real estate stabilized.”
“The thing that we do to manage that risk is we are underwriting our deals ourselves. Even though we are going to be co-investing with other developers around the country, we underwrite every deal as if we were the developer and construction managers in-house.”
“We don’t trend rents for two years from now when the building is done. We say the building was built today, what would be the yields, what would be return on that building and how long will it take to lease up.”
Discussed in this Episode:
- 08:52 Market selection: developing vs purchasing existing product
- 11:17 Focusing the business on opportunity zones
- 15:27 Challenges in setting up the REIT vehicle
- 23:00 Identifying and mitigating risk
- 34:17 Brandon’s advice and golden nuggets
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