Real estate investment platform Fundrise has raised over $22 million for their Opportunity Fund. The information was revealed in a recent Form D 5o6c filing with the Securities and Exchange Commission (SEC).
The Fundrise Opportunity Fund benefits from the newly minted “Opportunity Zone” designation created under the Trump tax legislation, the Tax Cuts and Jobs Act of 2017. Opportunity Zones, as explained by the Internal Revenue Service (IRS), are described as follows:
“Qualified Opportunity Zones were created by the 2017 Tax Cuts and Jobs Act. These zones are designed to spur economic development and job creation in distressed communities throughout the country and U.S. possessions by providing tax benefits to investors who invest eligible capital into these communities. Taxpayers may defer tax on eligible capital gains by making an appropriate investment in a Qualified Opportunity Fund and meeting other requirements.”
The payment of capital gains may be deferred until 2026.
Various real estate crowdfunding platforms have since moved into the sector lured by the available tax reductions which can significantly improve investor returns.
In 2018, Fundrise first filed a Form D for “Fundrise Opportunity Fund, LP” indicating its intent to raise up to $500 million. At that time, just 8 investors had participated in the offering raising only $322,000.
Today, in an amended filing, the Fundrise Form D indicates that $22,511,787 has been invested from 211 investors.
Fundrise has posted a promotional page on its website where prospective investors may calculate expected returns. While most of the investment opportunities pitched by Fundrise use the Reg A+ exemption, the Opportunity Fund uses Reg D and thus is only available to accredited investors.
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