In a world where financial gains often clash with ethical aspirations, finding investment avenues that harmonize both objectives, can feel like chasing an elusive mirage. Fortunately, the landscape is evolving, presenting opportunities that align financial growth with societal progress, particularly in. the realm of investment strategies centered on economic development. This convergence of tax advantages and community impact creates a promising avenue for conscientious investors.
The pursuit of a healthy economy is a shared vision among most Americans. Yet, the paths diverge on how to achieve this collective goal. Should it be through tax-funded initiatives for education and healthcare, or by incentivizing business growth through reduced taxes? The debate lingers on the “how,” but the desired destination—a robust, thriving economy—is universally acknowledged.
From an investment perspective, Opportunity Zone tax incentives aim to invigorate underinvested communities by offering tax benefits to eligible investors. While seemingly a solution, many strategies reliant on these incentives inadvertently fuel gentrification, contrary to their intended purpose. Gentrification displaces existing populations without revitalizing the community, often leading to housing crises and increased poverty. Enter the concept of “interfication” —building reciprocal markets locally and regionally to catalyze wealth within existing economies. By integrating real estate, local businesses, energy infrastructure, and strategic tax incentives, we can craft a blueprint for economic revitalization.
This intersection of doing good and doing well is at the core of many investment strategies, but a common sentiment is the struggle to align financial goals with ethical aspirations. Existing investment vehicles often prioritize “how” over “why,” focusing on scaling rather than the fundamental purpose. If more people reevaluate how we invest, we can truly change the economic landscape of our country.
Investors have a responsibility to make smart, socially conscious decisions with their capital. Our dollars have power beyond an 8% return, “financial freedom” and next-gen legacy. Investing in emerging markets and their leaders means investing in our legacies, the world we intend to leave behind, and the people we believe will make it a better place. By investing in a repeatable strategy that can increase real estate values in every market by 200-300% in under 10 years, combined with Private Equity, just imagine the positive impact on our world. Working with passionate visionaries in the community development, social impact, and marketing spaces, can help scale this type of strategy. With a coordinated infusion of diverse industries and asset classes, we can catalyze the mission of creating sustainable economies of the future
Qualified Opportunity Zone Funds offer a powerful tax stature that allows investors to defer their original capital gains taxes until 2027, and eliminate future capital gains taxes on all future growth within this investment vehicle. However, traditional funds often provide a conservative 4-6% return and a 1.5-1.8X exit after 10 years. This is due to a focus solely on the traditional real estate development strategies that might work in more developed parts of the country, but not in communities not ready or supportive of the development.
Creativity has been lacking in the investment world for decades, and because of that, investors have become complacent with the market returns. However, the next wave of innovative, emerging managers is attracting smart money into socially responsible investing, achieving aggressive returns and more sustainable portfolios by keeping the bigger picture in mind. The goal should be to use these incredible tax-advantaged investment tools to leverage other incentive programs, maximize returns, and build new economies while driving impact in parts of the country that need it most. Imagine a tax-free exit after 10 years with income earned over the holding period also tax-advantaged, resulting in an extra 30-50% to your bottom line. Structuring these tax-advantaged deals correctly is where a specialized real estate CPA like Advise RE adds the most value.
This is the intersection of doing good and doing well. It’s not just an investment movement; it’s about sculpting a future where economic growth is synonymous with community empowerment. Together, we can redefine investment success by nurturing the very fabric of our communities.
About Kelly Ann Winget
Kelly Ann Winget is an accomplished alternative investments expert and the founder of Alternative Wealth Partners (AWP), the first private equity firm founded and led by a millennial, openly LGBTQ+ woman. Kelly Ann has raised close to $1 billion in capital for startups, energy companies, manufacturing ventures, real estate, and other key emerging markets. She co-founded the EPIC family of funds, which is dedicated to driving transformative growth and sustainable development in communities across the U.S. The EPIC OZ FUND I LP is EPIC’s inaugural fund, providing eligible investors with a unique tax-advantaged investment opportunity. With an emphasis on diversity, innovation, and collaborative partnerships, EPIC Economies seeks to empower both investors and local communities to thrive together. Kelly Ann is also the author of ‘Pitch the Bitch‘ (2023), host of ‘The Wealth Alpha‘ podcast, and a sought-after keynote speaker and panelist
