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Opportunity Funds December 31, 2019 Date Approaching

Qualified Opportunity Funds have certain tests and periodic deadlines to meet in order to comply with the IRS rules and guidelines. One of the tests is the 90% asset test, and one of the periodic deadlines is December 31, 2019.

Qualified Opportunity Funds must have 90% of assets invested in Opportunity Zone property by periodic deadlines, and it is my understanding December 31, 2019 is the next periodic deadline for many of these funds.

There are 25 Opportunity Zones in the State of Hawaii; however, properties located in the two Kauai Opportunity Zones may be incomparable because of 1) the potential for long term appreciation and 2) jaw-dropping beauty and 3) the island’s spirit of aloha.

The island of Kauai has more lineal feet of white sand beaches than all the Hawaiian islands combined, and one must experience the fresh fragrant air and cooling trade winds to understand its specialness. The two Kauai Opportunity Zones are: 1) the sunny South Kauai census tract, and 2) the majestic North Kauai census tract.

Lawai Road oceanfront properties feature expansive green lawns, Coconut trees, and coastline Naupaka, and are located in the IRS Opportunity Zone

South Kauai Opportunity Zone Suggestions

Kukui’ula Homesites

Kukui’ula ready-to-build homesites are proving to be the 2019 choice of many smaller Opportunity Funds. Fifty-two Kukui’ula homesites have sold in the past year alone.

Individual investors have been forming LLCs, designating the LLCs as Qualified Opportunity Funds, depositing capital gains these funds, and purchasing Kukui’ula homesites. These funds are now building homes with the intent to furnish and create active business income by offering the properties as 7-day vacation rental homes, in order to comply with the IRS Opportunity Zone investment guidelines.

There are currently 4 ready-to-build homesites listed for sale from $599,000 to $795,000 in the Kaulu Neighborhood and 4 ready-to-build homesites listed for sale from $1,800,000 to $2,200,000 in the new Kula Makai Ph 11 Neighborhood. All eight homesites may be purchased by the December 31, 2019 deadline.

Kukui’ula’s Kula Makai Phase ll homesites feature panoramic ocean views, 7-day renting, and are priced from $1,800,000 to 2,200,000

Lawai Road Oceanfront Properties

Lawai Road is the oceanfront road that leads one to the infamous Spouting Horn and the enchanting National Tropical Botanical Garden.

There are four oceanfront Lawai Road residences, with transferable Transient Vacation Rental (TVR) licenses issued by the County of Kauai, currently listed for sale from $4,500,000 to $6,500,000, which may be purchased by the December 31, 2019 deadline.

4838 Lawai Road 5-bedroom 5-bath residence rents for $1,350/night and is listed for sale for $4,500,000 MLS 623540

North Kauai Opportunity Zone

Hanalei

There are two under-improved Weke Road properties steps from iconic Hanalei Bay, currently listed for sale, which may be purchased by December 31, 2019 deadline, and rented as 180-day rentals once substantial improvements are made:

  • The 5243 Weke Road property now listed for sale for $2,999,999 MLS 623894
  • The 5203 Weke Rd property listed for sale for $3,250,000 MLS 618614

Hanalei Bay enjoys idyllic summer days

Ha’ena

There are two properties currently listed for sale  in the Ha’ena area, each with the transferable Transient Vacation Rental license, which may be purchased by December 31, 2019:

  • The 7214 Alamoo Road residence listed for sale for $4,900,000  MLS 630230
  • The 7206 Alamoo Road residence listed for sale for $4,950,000 MLS 620655

Heavenly Ha’ena Beach is located in the North Kauai Opportunity Zone

Looking For A Short Catch-up Read On Opportunity Zones?

Click to read the brief story behind the legislation in my October 2019 Sean Parker’s Opportunity Zones: A Hawaii Perspective, and contact me for additional Opportunity Zone property suggestions. As always, please discuss investment plans with your financial advisers.

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