WHAT IS IT?
JPF Ventures has organized the OZFund, Inc. (“OZFund” or the “Fund”). OZFund is a community-focused ‘Qualified Opportunity Fund‘ (QOF) that is acquiring distressed or under-utilized below-market properties located in the ‘Opportunity Zones’ of Central Pennsylvania and the Mid-Atlantic Region for redevelopment into rental housing and commercial space. OZFund may also invest in selected businesses that operate in Opportunity Zones.
The Fund’s first project is underway in Lancaster, Pennsylvania, where we are building 52 rental apartments and a 6,700-square-foot Convenience/Grocery store with take-out food. Zoning and planning approval for this project has been received from The City of Lancaster. A combination of private equity, state grants, low-cost loans, and a conventional construction loan from a local bank supports the project.
The purpose of investing in a Qualified Opportunity Fund, such as the OZFund, is to transform distressed neighborhoods into thriving economic hubs and build rental housing for America’s working families.
As an example, chronic underinvestment in new housing means we have too few homes in America, and the consequence has been that affordable housing is out of reach for too many families. The pandemic worsened this challenge, with an increased demand for accommodation during the pandemic coupled with constraints on the ability to scale up the housing supply quickly. And today, inadequate housing supply is a significant driver of inflation, with rents contributing significantly to recent inflation. According to this article, the pain of rising housing costs is most acutely felt by those with the lowest incomes.
This issue is predicted to worsen unless an increase in multi-family housing is addressed, and the OZFund plans to meet this need by designing and building rental housing.
By making selective investments in businesses that lease space from the OZFund, we are helping create well-paying jobs in communities that need them.
By investing in the OZFund, Investors can defer or eliminate taxes while at the same time helping our communities flourish. A unique feature of the OZFund is that it may opportunistically make equity investments into some businesses in Opportunity Zones. This excellent return enhancer can deliver significantly higher returns for investors when compared to other affordable housing-focused funds.
According to the Secretary of the US Treasury: “Opportunity Zones are helping to revitalize communities and create jobs for hardworking Americans.” Click here to view the US Treasury FAQ
Investing in the OZFund should be of interest to Investors who wish to roll over a capital gain by investing in the OZFund for ten years:
· Investors can defer capital gains taxes from the initial sale of stocks, bonds, real estate, businesses, and other assets, by investing in a QOF like the OZFund. The capital gain must be invested in the QOF within 180 days of the sale of an asset.
· An example of tax savings from an investment held in the OZFund for at least ten years, with no federal tax on profits made from the investment, is shown in the table below:
|Major Benefit to After-Tax Return||Traditional Investment ($)||QOZ Investment ($)|
|Less: Federal Taxes (23.8%||-$238,000||$0|
|Available for Investment||$762,000||$1,000,000|
|Deferred Tax Payable at Dec. 31, 2026|
|Less: Permanent Exclusion||$0||-$100,000|
|After 10-Year Holding Period|
|Year 10 Value (assumes 2.62 equity multiplier)||$1,996,440||$2,620,000|
|Less Federal Taxes (23.8%)||-$293,797||$0|
|Net Cash Flow After 10 Years Pre-Tax||$1,234,440||$1,620,000|
|Net Cash Flow After 10 Years After-Tax||$940,643||$1,405,800|
|Total Savings from No Capital Gains Tax at Exit||$385,560|
INVESTOR AND OTHER TESTIMONIALS
“The location is in dire need of development. The neighborhood and City could use MORE affordable housing and the project is going to meet a need. I have 13 years of experience working with low-income housing and I have lived in this community since 1981 and I know for a fact that the city is in great need of more affordable housing. This project will also offer much-needed medical services, food service, daycare, and a general store. All these positive attributes helped me in my decision to invest in the OZFund.”
-John Suarez, OZFund Investor
“It was a fantastic opportunity to support the community and help elevate the southern part of Lancaster City. It also offered the opportunity to invest in a property and with Jeremy and his team alongside so many other purposeful investors as well as taking advantage of the tax incentives of the OZFund. It was a win-win.“
-Nathan Shea, OZFund Investor
“I jumped at the opportunity to invest in the OZ Fund. Though ESG investing is hot and popular these days, I’ve been skeptical of it’s authenticity in most cases. But the OZ Fund is an exciting opportunity for real ESG investment, and in our own community. I’m a big believer that private capital will always do a better job than government spending, yet investment is assuredly needed in historically neglected areas to support historically neglected people.“
-Chad Rodenberger, MD, OZFund Investor
“Investing in a project like the OZFund was a no-brainer for me. Our community needs workforce housing and services for the tenants occupying the premises. In addition, the project aims to bring businesses and working families back to a location that’s been vacant for ten years. It’s a win-win for all parties involved. Great returns for the investor; more tax revenue for the city property is completed and assessed, and the best of all, more families will be available to live in a safe and beautiful place in the heart of Lancaster.”
-Cinthia Kettering, OZFund Investor
“Lancaster City Alliance is pleased to support the residential/commercial project planned by the OZFund in Lancaster, Pennsylvania. It will provide attractive new housing and commercial opportunities.“
-Jeremy Young, Community and Economic Development Manager
“I applaud the goal of this project, that part of the city is really lacking in pretty much everything, and services especially.”
-Robert Shenk, City of Lancaster Zoning Hearing Board
“The plans align with the City of Lancaster’s policy goals to expand housing supply, offer additional affordable housing options in the city and foster neighborhood amenities and services.“
-Chris Delfs, Director of Community Planning and Development
“There is much-warranted discussion concerning affordable housing in Lancaster and the challenges of ensuring a city in which everyone, regardless of income level, can choose to live.”
-Marshall Snively, President Lancaster City Alliance