Since 2012, Highgrove Holdings Management, LLC, has invested time and expertise in the analysis of real estate markets across the United States to find areas with the most opportunity. Highgrove’s analysts take numerous factors into account, including the cost of living, employment opportunities and unemployment statistics, construction costs, available property inventory and the demographics of qualified home buyers.
Highgrove has determined that the Milwaukee area offers many benefits in terms of a strong economy, properties that offer considerable asset appreciation, excellent cash flow above most other areas, and it boasts many "friendly-to-landlord" city policies.
The Opportunity Zones Program is part of the 2017 U.S. tax reform legislation. This program is one of the most ambitious federal tax incentive programs in decades. The purpose of the program is to use private funds to promote economic development in lower income, underserved communities across the nation. The benefit to the investor is temporary capital gains deferral, basis step-up of previous gains invested, and a permanent exclusion on long-term holdings of 10 years or more.a
Tax reform legislation known as the Tax Cuts and Jobs Act provides a significant opportunity for investors to defer capital gains tax owed. The benefits are for those capital gains that are reinvested within 180 days of a capital gain event.
Highgrove offers two types of Opportunity Zone Funds. One is a no-debt fund and the other is a fund with 50% debt, each with specific advantages to fit an investor's needs. Qualified Opportunity Zones (QOZ's) allow investors to defer tax on capital gains by investing in Qualified Opportunity Funds (QOF's), which in turn make investments in QOZ real estate.
1. Tax Deferral - Tax deferral on capital gains invested in QOF to the earlier of an inclusion event or December 31, 2026 (at the tax rates existing at the time, not at the time of the investment).
2. Exclusion of Tax on Capital Gains Deferred - If the investor holds its qualifying investment for five years, the basis of the qualifying investment is increased on the fifth anniversary by 10%. Because the investment part of the program ends on December 31, 2026, investments must be made by December 31, 2021 to obtain this benefit.
3. Exclusion of Investment Appreciation - If the investment in the fund is held for 10 or more years, then the appreciation of the QOF investment (not the original deferred capital gain, bt the post-acquisition capital gain) is exempt from taxes. The ivnestment must be sold by December 31, 2047.
Highgrove has been acquiring properties in the Milwaukee area at prices, in some cases, exceeding 50% off of fair market value. Properties purchased according to our strategy provide tremendous a cash flow with 10%-18% distributions annually. Values are increasing year over year as Highgrove focuses on improving communities where purchases are made. Focus will always remain on safety, clean environment and good service for our tenants.
With a high number of distressed and foreclosed properties plus higher rental rates available in the area, Highgrove finds it possible to acquire properties at a low cost with a high return through rental in the Philadelphia area. Again, the focus remains on working with local authorities to clean up the areas where Highgrove properties are located, providing safety, attractive homes and good customer service for Highgrove tenants.
The capital of New Jersey, Trenton has always had a strong rental market due to a larger number of renters than homeowners. There are plenty of available investment properties such as duplexes and triplexes, as opposed to large scale apartment complexes and buildings.
Trenton is slated for a major redevelopment of its downtown area and infrastructure. This, in conjunction with an influx of employment opportunities, has made Trenton a potential success in the rental industry as people move into the city, needing places to live closer to their work place. Highgrove plans to take advantage of this opportunity by acquiring properties around the city to create a cash flow portfolio with high cap rates on property acquisition costs.
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