Clever color use adds homely decor to this Hollywood house

Clever color use adds homely decor to this Hollywood house

There are some world-class interior design ideas coming out of the West Coast right now. From Brigette Romanek’s decor for Gwyneth Paltrow’s new home, all curved shapes, natural light and indoor trees, to Axel Vervoordt’s subtly textured minimal architecture for Kim Kardashian. There seems to be a revelry in the amount of light which can pour through a Californian window, a new appreciation for being able to walk into a sun-filled home, kick off you shoes and sink into a rounded seat that is both elevatedly elegant and supremely comfortable.

And following in this new tradition – and in fact moving this look on with a fine art-level appreciation of how to use color – is the design studio LALA Reimagined. Founded by Lia McNairy and Azar Fattahi, the duo have been creating a fleet of modern homes in such alluring places as Malibu and Palm Springs. 

Room to grow: Tulsa Botanic Garden to host a variety of fun, educational events this June | Home & Garden

Room to grow: Tulsa Botanic Garden to host a variety of fun, educational events this June | Home & Garden

No matter if you’re a gardening enthusiast or are just looking for a pleasurable summer time exercise, the Tulsa Botanic Backyard has one thing for you this June.

From intriguing plant workshops to child and pet dog-welcoming courses, the Backyard has arranged a diversified agenda of indoor and outside situations for this thirty day period.

“The key concept for our summer workshops and choices is seeking to assistance individuals have some indoor ordeals in the warmth, simply because sometimes gardening in Tulsa in the summertime can be brutal,” reported Ellen Weatherholt, curator of the Children’s Discovery Backyard garden at Tulsa Botanic Backyard garden. “We preferred to generate methods to take pleasure in the gardens inside of, as well as outside.”

Tree Fort Storytime

On June 4 at 11 a.m., young visitors are inspired to pay a visit to the Children’s Discovery Backyard garden to hear a character-associated story, told by a Garden team member. Amber Hallford, a Lakeside Promenade Gardener, will examine Holly Keller’s “Farfallina & Marcel,” a story about the enduring friendship amongst a caterpillar and a gosling.

Men and women are also reading…

Storytime is totally free with admission.

Nationwide Best Good friends Day

Seize your bestie and head to the Garden on June 8 for Nationwide Greatest Close friends Day to acquire two-for-one particular admission.

2nd Saturday Puppy Working day

June 11 is all about celebrating furry good friends at the Garden. Team have partnered with ARF Tulsa to host an on-web site pet adoption as well as a giveaway from providers like Pet Supplies Furthermore and Dogtopia.

People are inspired to convey their possess four-legged companions to get pleasure from the Garden’s grounds together with them. Wading swimming pools will be supplied to assist your pup cool off its paws immediately after their check out.

“This partnership began since we have so lots of personnel associates who definitely enjoy their companion animals, so we have tried out to come across nearby businesses that we’d adore to feature to assistance get a lot more adoptions and just teach our friends on the most effective strategies to care for their animals,” Weatherholt said. “We’ve been acquiring a good deal of new website visitors with our Doggy Times because a lot of individuals adore to provide their pets with them anywhere they go.”

This occasion expenses typical admission and $4 for non-member canines.

Succulent Bowl Workshop

Also on June 11, be a part of horticulturist and nursery manager Lori Fry and design and style your own succulent planter bowl.

“We expand a wide range of various succulents in our back garden — probably up to 40 unique types — and Lori will have individuals offered for the workshop,” Weatherholt stated. “Every participant will get their possess bowl and select out which succulents they’d like to use, and Lori will instruct them how to plant them, how to very best care for them and in which to situate them in your property and property so they get a good deal of sunshine.”

The Back garden will supply contributors succulents of a range of textures and colours, such as hens and chicks (also acknowledged as houseleeks), aloes, sedums and haworthia plants.

Guests can purchase wine, beer and non-alcoholic beverages. Registration for the workshop is expected and charges $35 for garden members and $40 for non-users.

Flag Working day

On June 14, each individual guest will obtain a free mini U.S. flag in honor of Flag Working day.

Father’s Day

All dads who take a look at the Garden on June 19 will receive a gift with compensated admission or a member ticket.

Nationwide Pollinator 7 days Plant Sale

In honor of Countrywide Pollinator 7 days, the Garden will host a plant sale from June 21-26. Guests can shop for a variety of crops that present nourishment to butterflies, bees, hummingbirds and other pollinators that preserve our ecosystem likely.

“We genuinely adore to aid our pollinators right here at the Back garden — they are a big element of what we do in this article,” Weatherholt claimed. “We increase a great deal of crops here to support pollinators. We have nectar crops the place older people can feed and accumulate pollen, and also host vegetation for the larval phases of diverse insects — the crops that bugs take in to turn out to be grown-up butterflies or beetles.”

This June will commemorate the Garden’s first time web hosting a pollinator plant sale.

“It’s some thing we have viewed a great deal of fascination in — a lot of folks are starting to garden with pollinators in head, attempting to entice them to their yards,” Weatherholt said. “We’re making an attempt to assist that and enable them join to the excellent vegetation for their gardens. If you add (pollinators) to your household backyard garden, you will see much more stunning factors every single calendar year.”

Pollinators play a crucial job in our setting and are necessary not just for other animals, but for people as very well, Weatherholt said.

“Pollinators are critical to the lifecycle of so numerous vegetation, animals and fungi — fundamentally everything that helps make up our world,” Weatherholt claimed. “They help vegetation total their daily life cycles, and if vegetation aren’t pollinated, we and other animals will not have nearly anything to eat. We have to make absolutely sure we have plenty of of a habitat for these pollinators, so they can do their employment all in excess of Oklahoma, and the world, far too — they preserve everything else rolling.”

Backyard customers will get a 10{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} discounted on all plant product sales. The Back garden is only accepting credit cards, Google Pay and Apple Fork out.

Make a Sensory Fairy Back garden Workshop

Both of those youngsters and older people can check out the whimsical earth of fairy gardens at the Garden’s workshop on June 24.

“Our schooling employees is building a preference record of distinct herbs and other aspects of these bowls to support little ones truly feel some independence and achieve information about vegetation,” Weatherholt claimed. “We’ll have herbs with fuzzy leaves, some with potent stems and some that scent otherwise from other folks, as properly as exciting items to decorate the fairy gardens — textured stones, marbles and bark, and toy bugs and butterflies to motivate little ones to have interaction with the vegetation and just take some thing residence they can play and picture with.”

Contributors can pick out from herbs like oregano, thyme and parsley to increase to their fairy yard to consider home and use for cooking all over unique seasons, Weatherholt explained.

Kits can be bought for $25 for Backyard garden associates (or $30 on the working day of) and $30 for non-users (or $35 on the day of). Admission should really be ordered individually for each attendee.

Members’ Early Early morning

On June 28, customers are welcome to conquer the traces (and the warmth!) and take pleasure in the Yard early in the early morning, right before it officially opens for the day. Amble by way of the grounds, apply your photography and witness the Garden’s many birds and other animal species ahead of the hubbub of the working day begins. Users can pay a visit to the Garden from 7 a.m. to 10 a.m.

The ultimate aim of the Garden’s June programming is to access more individuals — specifically little ones — and show them all the excellent sides of plant everyday living and gardening, Weatherholt said.

“We have a wonderful audience of interested and engaged grown ups, but we also love to be ready to engage the families that may possibly want to go to us,” Weatherholt claimed. “We want to immerse various audiences. Little ones adore traveling to the Back garden, so we adore to help them make issues they can choose household so they can proceed studying about gardening, even when they’re not below.”

For a lot more information and facts, tickets and event periods, pay a visit to tulsabotanic.org.

grace.wooden@tulsaworld.com

10 home renovations that could boost your property value

10 home renovations that could boost your property value

A new study from Angi examined different home renovations that pay off by boosting your property value. (iStock)

Home renovations can add value to your home while also making it a better place to live, and some improvements are more likely to pay off when it comes time to sell. A recent study from Angi (formerly Angie’s List) shared what it said are the top home features that boost a property’s value, from intricate feature updates to extensive home improvement projects.

“Spruce up your home with your dream features, and you could boost its eventual sale value by more than the features cost,” the article said.

The most value-boosting feature across all U.S. housing markets was the pot filler, a kitchen sink attachment located over your cooktop that makes it easier to add water while cooking. Angi estimated that installing this fixture could cost between $600 to $2,000 — but that it pays off with a 3.20{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} price premium.

Other features coveted by today’s homebuyers that pay off in higher property values include:

  • Pendant lighting (2.66{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})
  • Under cabinet lighting (2.48{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})
  • His-and-hers sinks (2.35{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})
  • Barn doors (2.32{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})
  • Butcher block (2.26{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})
  • Quartz countertops (2.26{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})
  • Oversized windows (2.23{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})
  • Farmhouse sink (2.22{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})
  • Subway tile (2.13{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9})

REFINANCING FOR HOME REPAIRS AND IMPROVEMENTS: HOW DOES IT WORK?

The most value-boosting improvement also depends on where you live. For example, Angi said that homeowners in the New York area have the most to gain by installing a garage (18.47{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}) — a coveted feature in a market where off-street parking comes at a premium. In San Francisco, known for its year-round sunny climate, sellers can add the most value to their homes by adding a pool (11.35{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9}). 

While some of these property features are relatively cheap to purchase and install, others require a sizable upfront investment. For example, adding a garage to your home costs an average of $27,500, according to HomeAdvisor by Angi, while building a pool will cost you about $32,000 on average.

Fortunately, there are several ways to finance renovations that allow homeowners to tap into their existing home equity or break their upfront costs into fixed monthly installments. Keep reading to learn more about home improvement financing, and visit Credible to compare rates on borrowing products like unsecured home improvement loans and cash-out mortgage refinancing.

THINKING OF REFINANCING YOUR MORTGAGE? HERE’S THE MINIMUM CREDIT SCORE YOU’LL NEED

3 ways to finance home improvements

A recent study said that the average American homeowner can gain nearly $200,000 in value by remodeling, but many consumers could be held back by the steep upfront cost of home renovations. Thankfully, there are several ways to finance home improvement projects, including:

  1. Cash-out mortgage refinancing
  2. Home equity loans and HELOCs
  3. Unsecured personal loans

Read more about each strategy in the sections below.

1. Cash-out mortgage refinancing

Mortgage refinancing is when you take out a new home loan with better terms to pay off your existing mortgage. Cash-out refinancing is when you borrow a mortgage that’s larger than your current home loan, effectively allowing you to pocket your home’s equity in cash which you can use to pay for home improvements.

The average homeowner gained more than $55,000 in home equity in 2021, according to a new report, which gives some borrowers the opportunity to access more money than ever with a cash-out refinance. 

Keep in mind that mortgage refinancing comes with closing costs, which are typically between 2{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} and 5{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of the total loan amount. Plus, mortgage rates have surged quickly in 2022, which means it’s important to shop around for the lowest rate possible for your financial situation.

You can visit Credible to compare mortgage refinance rates across multiple lenders at once. That way, you can rest assured that you’re getting a competitive rate while financing home renovations.

HOW TO AVOID A MORTGAGE PREPAYMENT PENALTY

2. Home equity loans and HELOCs

Another popular home improvement financing option is a home equity loan or home equity line of credit (HELOC). This is a separate loan in addition to your first mortgage that lets you borrow against the equity you’ve built in your home.

While home equity loans come with a fixed loan amount and repayment terms, HELOCs allow you to borrow just what you need from a revolving credit line. Both borrowing options are secured loans that use your home as collateral, which means the creditor can seize your property if you fail to repay the loan.

Most home equity loan and HELOC lenders let you borrow up to 85{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of your home’s appraised value. Like with cash-out mortgage refinancing, these types of loans require the borrower to pay closing costs. 

You can learn more about calculating your home equity on Credible. 

PERSONAL LOAN ORIGINATION FEES: ARE THEY WORTH THE COST?

3. Unsecured personal loans

Unlike other secured loan options for home improvement financing, personal loans are unsecured and don’t require you to use your home as collateral. They allow you to borrow a lump-sum of cash that you repay at a fixed interest rate in predictable monthly payments over a set repayment period, typically a few years.

Since personal loans are unsecured, lenders determine eligibility and loan terms based on a borrower’s credit history. Applicants with good credit and a low debt-to-income ratio (DTI) will qualify for the lowest rates available, while those with fair or bad credit may see higher rates — if they qualify at all.

Personal loan rates by credit score

GETTING A SECOND MORTGAGE? HERE’S WHAT YOU NEED TO KNOW

Another benefit to using a personal loan for home improvement is that lenders offer fast funding. The loan amount may be deposited directly into your bank account as soon as the next business day after loan approval. This is in contrast to home equity options, which require a longer closing period. Plus, short-term personal loan rates are currently near historic lows, according to data from Credible.

You can browse current personal loan interest rates in the table below. And you can visit Credible to get prequalified through multiple online lenders at once for free without impacting your credit score.

VETERANS BORROWING VA LOANS AT A RECORD PACE, STUDY SHOWS

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

Real estate agents got .9 billion in Covid relief PPP loans. The housing market boomed, but few repaid the loans.

Real estate agents got $3.9 billion in Covid relief PPP loans. The housing market boomed, but few repaid the loans.

While Covid was battering the U.S. economy, Gary Goldberg seems to have done OK.

During 2020, the pandemic’s first year, the Santa Barbara, California, real estate agent sold more than $27 million worth of luxury homes, slightly down from the $31 million he closed the year before, according to data from Zillow. In 2021, he sold $82 million worth of real estate.

He also applied for and received two loans totaling $95,832 via the federal government’s Covid relief Paycheck Protection Program, according to public records. In his applications, he listed one employee. 

He asked for the first loan on April 15, 2020, and the second on Jan. 30, 2021. Federal records show he also asked for and received forgiveness for both loans by November 2021, meaning he had met certain criteria and did not have to pay them back.

In the United States, the average gross commission for real estate sales is 2.5 percent of the sale price, and the agent usually gets 85 percent of that, according to Real Trends Consulting, a firm that tracks home sales and commissions. According to that formula, Greenberg may have earned six figures in 2020 and seven figures in 2021.

Goldberg declined to comment for this article.

There’s no indication Goldberg did anything illegal and he’s certainly not alone. As real estate sales — and commissions — rose during the pandemic, individual agents also got a helping hand from taxpayers.

The federal government authorized more than 300,000 loans to real estate entities claiming just one employee, adding up to $3.9 billion in Paycheck Protection Program (PPP) loans backed by the U.S. Small Business Administration, according to data from the government’s Pandemic Response Accountability Committee (PRAC), which oversees pandemic relief spending.

On average these real estate businesses got $13,000, but 146 entities got more than $90,000 each, according to the PRAC data, all of which is public record.

PPP loans went to real estate agents in booming markets — $3.6 million to real estate entities in Beverly Hills, $4.3 million to entities in El Paso, Texas, and $14.9 million in 1,107 loans to real estate entities in Charlotte, North Carolina.

All the loans were made with the understanding that they would be forgiven if the recipient met certain criteria, like spending 60 percent of the loan on payroll, and the rest on eligible expenses. So far $3.1 billion of these real estate loans have been forgiven, and the government has significantly sped up its forgiveness in the past eight months. For the remaining $800 million in loans, borrowers have either not asked for forgiveness, they have been denied or the SBA and the lenders who issued the loans have not yet granted it.

The SBA says it has denied forgiveness for about 12,200 loans, and about 4,200 borrowers have appealed denials. 

SBA’s loan forgiveness

The $789 billion Paycheck Protection Program was intended to rescue American jobs and shore up businesses during the pandemic. Now 80 percent of all PPP loans — 9.9 million of them — and 84 percent of the total dollar amount have been forgiven by the SBA, according to the PRAC.

For real estate entities the percentage of forgiveness is almost the same, at 83 percent of all loans and 84 percent of the dollar amount, according to the PRAC website.

A senior SBA official told NBC News the multiple pieces of legislation that were voted on by both Democrats and Republicans and signed by President Donald Trump were “extremely liberal” and “extremely generous” when it came to loan forgiveness.

PPP loans were issued by private lenders and backed by the SBA. If a borrower wants a loan forgiven, they apply to their lender or SBA for forgiveness and submit forms and documentation.

In most instances, the lender makes a recommendation to SBA about forgiveness or denial. In some cases, an eligible borrower may apply through SBA for “direct forgiveness” and SBA then sends the application to the lender for approval.

In addition to denying forgiveness for 12,200 loans, the SBA has also pulled aside 215,000 selected loans for manual review, according to a senior SBA official.

In a statement, SBA spokesperson Han Nguyen said, “[U]nder the previous administration, Congress prescribed in the CARES Act that PPP loans were to be forgiven as long as funds were used as required.”

“Since day one, the Biden-Harris administration has worked to mitigate inappropriate use of funds and ensure good stewardship of taxpayer dollars — and will continue to do so — to the extent allowed by law.”

Real estate boomed while other industries suffered

Erin Stackley, senior policy representative for commercial issues at the National Association of Realtors, says that when the pandemic hit, realtors faced uncertainty. Sellers canceled open houses, “because obviously people didn’t want people traipsing through their homes.” She said realtors face multiple costs besides payroll, including office rent, fuel for their cars and staff. 

Stackley defended those who asked for PPP loan forgiveness, saying if they received loans in good faith and followed the program’s rules “then that is what the SBA and Congress intended to happen.” 

But while industries like restaurants and tourism suffered during the pandemic, residential real estate boomed.

Steve Murray, a partner at Real Trends consulting, said when the pandemic hit real estate brokers panicked because of the canceled open houses. But he said that by early May 2020 it was clear from nationwide open house data that people were looking at houses again and “something was about to happen.”

Housing sales jumped 53 percent from April 2020 to Jan. 1, 2021, and housing prices are now 40 percent higher than they were in January 2020.

“I’ve been in this business since the 1970’s and I’ve never seen that kind of explosion in sales,” said Murray.

Commissions soared as well. Murray says before the pandemic total residential commissions nationwide in 2019 were $76.2 billion. But in 2020, during the pandemic, they rose to $85.9 billion. In 2021 commissions went even higher, hitting a record $98.8 billion.

Rising home prices were blamed on pent-up demand and low mortgage rates, creating the opportunity for real estate agents to excel in hot markets.

NBC News reached out to real estate agents who had a successful year in sales in 2020 and obtained PPP loans in excess of $90,000 that were then wholly or partially forgiven by the federal government.

Tina Guerrieri, who sells houses in suburban Philadelphia, sold more than $25 million worth of real estate in 2020, according to Zillow, and she also got a PPP loan for $100,000. Her loan was forgiven in 2021, and she no longer has to pay the money back, according to public records.

NBC News asked Guerrieri why she needed the $100,000. She told a reporter she did not want to share what she used the money for or how it was approved, saying, “So many people know me, I wouldn’t want all those details shared.”

Real estate agent Jenna Jacques sold $25 million worth of real estate in Scottsdale, Arizona, in 2020 according to Zillow data. She also received three loans totaling $141,664 that were all forgiven by the federal government. Jacques did not respond to multiple requests for comment.

New Jersey commercial real estate agent Shane Wierks got two PPP loans for $151,833, according to federal records, and has paid $103,000 back to the federal government. Public records show $48,918 was forgiven. He said based on his conversations with other real estate agents that was “pretty much what everyone got.”

One real estate agent who got the money told NBC News she came to believe that asking for a loan of taxpayer money to be forgiven after a successful year could be inappropriate.

Phyllis Patek, a real estate agent in Austin, Texas, who sold more than $10 million worth of real estate in 2020, got an $83,300 loan. 

Records show $36,000 of the loan was forgiven, but Patek said she’s going to pay it all back because she was so successful selling in Austin’s hot 2020 market.

“I’m almost finished paying it off. It ended up being a crazy year because I’m in Austin and I didn’t feel right asking for it to be forgiven.”

Luxury Specialist Roger Pettingell Offers Insight and Advantages to Clients in Sarasota’s Competitive Real Estate Market | Sarasota

Luxury Specialist Roger Pettingell Offers Insight and Advantages to Clients in Sarasota’s Competitive Real Estate Market | Sarasota

Sarasota genuine estate has never ever been in better need, and level of competition is fierce, specially for the deluxe attributes situated alongside the area’s picturesque waterfront and in the energetic coronary heart of downtown. According to SMARTMLS, the common checklist price tag of a household in Sarasota and Manatee counties is now in excess of $1.2 million.

Roger Pettingell, a Coldwell Banker Realty agent and World-wide Luxurious Professional, has been serving the unique wants of affluent house customers and sellers for 35 decades with much more than $2.6 billion in revenue. He has been honored as the No. 1 real estate agent in Sarasota and on Longboat Vital and Bird Essential for 13 consecutive a long time, for every MLS. Pettingell is also a hand-picked member of the Worldwide Luxury Alliance Community, an elite network of luxurious marketing specialists from all through North The usa and Europe. His unparalleled abilities and white-glove services deliver shoppers an priceless gain in any current market.

Pettingell a short while ago witnessed this urgency when he sold a Lido Shores estate, intended by Adrienne Vittadini, for $11.5 million right after just 11 days on the market place. This remarkably quickly sale set a history for Sarasota based on rate per sq. footage and was procured sight-unseen by an out-of-condition customer. Pettingell and his five-star workforce labored swiftly to strategically current market and manage the sale of the property.

“Condominium construction in Sarasota has improved exponentially in order to satisfy city need in the Sarasota region,” included Pettingell. “These models are priced at the luxurious amount, with very little underneath a $1 million and shortage underneath $2 million,” Pettingell claimed. Consumers are trying to find larger sized areas and scenic sights, both of those waterfront and downtown. Pettingell suggests enlisting the advocacy of an impartial serious estate agent when paying for a condominium-one particular who is familiar with the current market, understands high-quality development, and is proficient at negotiating a deal and locking in exceptional pricing.

Scott Pelle, a recent customer, explains the positive aspects of enlisting Pettingell’s true estate solutions: “What I like most about performing with Roger is that he has a components for accomplishment. This means he appreciates how to preserve the system transferring in the correct course by eradicating obstacles and having a crew behind him. We have worked with other REALTORS® who do not have this infrastructure and inevitably factors tumble by the cracks. ‘The Roger Experience’ was rather various, as he was leading the process and instilling self-assurance in us along the way.”

Far more Details
For far more info about listing or buying a residence in the bigger Sarasota place, call the area’s prime luxurious authentic estate pro, Roger Pettingell, at 941-387-1840, [email protected], or go to pettingell.com.


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Qualified Opportunity Zones vs. 1031 Exchanges

Qualified Opportunity Zones vs. 1031 Exchanges

Real estate investors have used the Section 1031 exchange for decades to trade assets while deferring taxable gains. On the other hand, the qualified opportunity zone program provides real estate investors options to defer taxes and, in some cases, even eliminate taxable profits altogether, which has led real estate investors to ask: Which is better, a 1031 tax exchange or a qualified opportunity zone real estate investment?

The IRS has established strict regulations for both alternatives, and some real estate investments may qualify for both tax breaks. Before choosing between the two approaches, real estate investors should understand how the differences affect their taxable gains.

What Is a Qualified Opportunity Zone?

Communities in economic distress needing investment and revitalization are known as “opportunity zones,” but many properties within these districts have undergone significant changes and are ripe for development. As a result of the Tax Cuts and Jobs Act of 2017, opportunity zones offer tax incentives for investing in community development in these areas to encourage economic growth and job creation.

Opportunity zones range from rural areas without services, to blighted neighborhoods, to areas that have experienced economic redevelopment. The governors of each state nominate a small number of tracts that meet the criteria for official designation as qualified opportunity zones (QOZs). Opportunity zones are designated and certified by the Secretary of the U.S. Treasury Department, with approval from the IRS.

Over 8,000 qualified opportunity zones exist in the United States, accounting for 12{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of all Census tracts. The Department of Housing and Urban Development’s website provides an interactive map highlighting where the opportunity zones are located. Rural areas make up nearly 23{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} of them.

A map of the United States with the over 8,000 qualified opportunity zones highlighted in pink.

The federal government created qualified opportunity zones to encourage investment and economic development. This landmark legislation came with several tax benefits for individuals who invested through a qualified opportunity fund. Qualified opportunity funds (QOFs) are investment entities, like companies or partnerships, created to invest in property within opportunity zones. 

Investments made by eligible opportunity funds must meet specific criteria. For example, real estate assets must be new or significantly renovated. It is prohibited to purchase existing real estate without making significant improvements. A substantial improvement to an opportunity zone property means that the opportunity fund investments must be equal to or greater than the value of the asset and must be completed within 30 months.

Benefits of a Qualified Opportunity Zone

Capital gains deferrals from prior investments are the primary tax benefit of opportunity zone programs. In particular, an investor who transfers capital gains from a prior investment into a QOF within 180 days of the sale date can defer taxation on the gain until December 31, 2026.

Opportunity zones can be a great solution for any capital gains, long or short term. The gains could be from the sale of real estate, sale of a closely held business, or from the sale of any kind of appreciated asset, including stocks, art, collections or other assets of value.

In addition, if qualified opportunity fund investors hold their investments for at least five years, they can further reduce their deferred capital gain because their cost basis will increase by 10{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} at that point (Note: under current tax law, an investment made after December 31, 2021, will be ineligible for the 10{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} basis step-up since deferred taxation on December 31, 2026, will occur prior to the five-year holding period being met). And those who can hold their QOF investments for 10 years or more can enjoy 100{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} tax-free gains. This gives investors a competitive advantage in wealth creation.

What Are 1031 Exchanges?

By participating in a 1031 exchange, investors can exchange one investment property for another while at the same time deferring the capital gains taxes that would otherwise be due at the time of sale. In this strategy, investors can substantially improve their properties without paying taxes on the profits.

If you want to dive more into 1031 Exchanges, check out my masterclass, Master The 1031 Exchange.

Benefits of a 1031 Exchange

Similar to qualified opportunity zones, the main benefit of a 1031 exchange is tax deferral. Once a property owner exchanges an investment property for another property of a “like kind,” they get to defer the taxes on their gains until the replacement property is sold. This tax deferral gives investors more funds available to increase their purchasing power through higher down payments and higher-priced replacement property purchases. In this way, investors can leverage their cash and grow their wealth.

In addition, 1031 exchanges are also very flexible as far as the property type is concerned. Investors can, for example, exchange one property for another, consolidate multiple properties into a single one, or exchange the existing property for several smaller ones.

Which Investment Do I Choose: QOZ or 1031 Exchange?

Although both QOZs and 1031 exchanges serve to defer capital gains taxes, there are significant differences between them. Accordingly, determining which program is preferable depends on the investor’s goals and objectives.

For Tax Deferral, 1031 Exchanges Have the Edge

If the investor’s primary goal is to stay in the real estate investing business for the rest of their life, the 1031 exchange is superior to QOZs. These investors do not want to cash out, or maybe they only want to cash out at a much later date (and they are prepared to pay capital gains taxes at that time if they do).

For Realizing Profits, QOZ Funds Have the Edge

If an investor intends to realize profits at some point during their lifetime, a QOZ might be a better option because QOZs separate the basis and the capital gain. On the other hand, if an investor wishes to keep their basis for other investments or opportunities, they may choose to invest only the capital gains. An investor who uses a 1031 exchange has a distinct disadvantage because, in order to have a complete deferral of taxes, they need to roll all the proceeds from the sale into the new investment.

As Estate Planning Tool, 1031 Exchanges Have the Edge

Because an investor can carry the tax deferral from a 1031 exchange forward indefinitely, 1031 exchanges can be useful estate planning tools. Deferred gains are eliminated upon passing. Suppose the investor holds onto the property for the rest of their lives. In that case, their heirs receive a step-up basis based on the property’s fair market value at the time of passing, wiping out any earlier appreciation in value. In addition, capital gain taxes are not imposed on these heirs when the asset is sold.

However, any beneficiaries of a QOZ fund who inherit their interest before Dec. 31, 2026, will inherit the original tax basis in the investment because QOZs do not provide a step-up upon death. Thus, they will be liable for the taxes; however, if the successor continues to hold the QOZ fund interest for at least 10 years after the initial investment, their tax basis will be stepped-up to the fair market value of the investment upon disposition under the QOZ program.

Key Takeaways

  • A qualified opportunity zone and a 1031 exchange give real estate investors tax advantages.
  • A QOZ and a 1031 tax exchange require different strategies that investors need to understand before choosing which route to take.
  • Investors in qualified opportunity zones benefit primarily from the deferral of capital gains from prior investments.
  • The key benefit of a 1031 exchange is that investors can swap or consolidate investment properties while deferring capital gains taxes at the same time.
  • When it comes to deferring taxes, 1031 exchange has the advantage.
  • When it comes to profit realization, the advantage goes to qualified opportunity zones.
  • If you compare QOZ and 1031 exchange in estate planning, the 1031 exchange has the advantage.

Investing in 1031 exchanges offers many benefits to investors, including significant tax advantages and the opportunity to grow and leverage their wealth with minimal financial obligations. However, to fully benefit from them, you must adhere to specific timeframes and rules.

It’s important for an investor to always consider their long- and short-term goals as well as their income and equity objectives. 1031 exchanges and qualified opportunity zones both have their respective pros and cons. A knowledgeable planner and tax team can help an investor determine which strategy or combination of strategies can best serve an investor’s needs.

Chief Investment Strategist, Provident Wealth Advisors

Daniel Goodwin is the Chief Investment Strategist and founder of Provident Wealth Advisors, Goodwin Financial Group and Provident1031.com, a division of Provident Wealth. Daniel holds a series 65 Securities license as well as a Texas Insurance license. Daniel is an Investment Advisor Representative and a fiduciary for the firms’ clients. Daniel has served families and small-business owners in his community for over 25 years.

Securities offered through AAG Capital Inc., member SIPC and FINRA.