Opportunity Zones and Communication Styles
Exploring opportunity zones and how different communication styles impact real estate investing discussions and decisions.
Opportunity Zones are the latest and greatest thing to hit real estate investing. Understanding Communication Styles holds extreme value in everything we do as professionals, especially in real estate investing. This is a mashup presentation of the two.
Communication Styles
Four different styles of communication exist across two axes — results-driven vs. relationship-driven, and low energy vs. high energy:
- Direct/Dominant — Decisive, competitive, independent and confident. More concerned with results than relationships, preferring fast-paced busy environments.
- Analytical/Conscientious — Precise, analytical and logical. Don’t easily express emotions. Prefer structured, ordered and functional environments.
- Influencer/Initiating — Sociable, enthusiastic and spontaneous. Motivated by relationships. High energy, preferring stimulating personal and friendly environments.
- Steady/Supportive — Calm, sincere and approachable. Motivated by close relationships and dislike conflict. Prefer professional or personal relaxed environments.
Opportunity Zones
Opportunity Zones are a federal regulation that allow for preferential tax treatment on specific investments in distressed communities. A qualified investment is the gain from a previous investment that can be directed to a qualified opportunity fund for preferential tax treatment.
This is different from a 1031 exchange — in a 1031, the entire sale proceeds must be reinvested to maximize tax treatment. With Opportunity Zones, only the gain portion qualifies. For example, if you bought Facebook at $38 and sold at $165, only the $127 gain is the qualified investment amount.
Key Takeaways from the Conference
- Opportunity Zones regulations are still being clarified — if anyone tells you they have it figured out, be cautious
- California had not yet adopted the federal tax incentive plan at the time of this presentation
- For investor-operators: keep the structure simple or risk that attorney fees consume potential tax benefits
- For non-operators with qualified investment dollars: wait, take your time and evaluate the fund opportunities
- Most importantly: get professional advice and run everything by your tax attorney
The information in this article is for educational purposes only and does not constitute tax, legal, financial, or investment advice. Consult a qualified professional before making investment decisions.