WASILLA — John Nelson is a financial advisor. But he’s also a Valley resident.
Nelson said his job is to, “help people make informed decisions.”
Nelson, the wealth manager for Diamond Willow Financial brought in a pair of experts to help him out. Micheal Leydig and Jason Pueschel were invited to speak to a group real estate agents and other professionals from across the Mat-Su during a Real Estate 1031 Exchange Workshop at the Valley Board of Realtors office Thursday evening.
He said that ultimately, he hopes this workshop series will help spur economic growth and create opportunities for local professionals, the clients and their communities.
“It’s a win-win-win. It really is,” Nelson said.
Jason Pueschel, who appeared via video conference, is the chief investments strategist and wealth manager with Money Concepts, an international independent broker dealer based out of Palm Beach Gardens, Florida. Micheal Leydig is the senior vice president at Cantor Fitzgerald Capital, a financial services firm based out of New York City.
The pair discussed 1031 Exchange Capital gain tax issues related to investment real estate, opportunity zones, tax deferral options, replacement property options, strategies for multiple sales and purchases in a 1031 exchange and updates on current tax reforms that affect real estate investors.
Simply put, the workshop was geared for experienced real estate agents and others in their related fields to learn how to broaden and strengthen financial opportunities for their various clients, themselves, struggling economic areas as well as the surrounding Valley economy.
The topics discussed specifically regarded 1031 exchanges and opportunity fund zones in Alaska. Nelson’s goal was to, “provide education to investors, and professionals who already have a basic understanding on what a 1031 exchange is the added value we bring to them.”
Nelson said this series is one of his ongoing efforts here and across the state. One of the priorities is informing people about local opportunity zones, and how they could potentially link into a new, economic and community-driven concept established last year.
The Opportunity Zones Program was created under the federal Tax Cuts and Jobs Act in 2017. This nationwide community development program offers incentives to private, corporate and individual investors who invest their capital in low-income communities. The idea is to stimulate disadvantaged districts with new homes and commercial properties while giving real estate agents, commercial real estate developers, business owners, other types of stakeholders an incentive to invest in designated distressed areas.
Every state in the United States has opportunity zones scattered across its lands. Alaska currently has 25 officially recognized Opportunity Zones and two of them are in the Mat-Su Valley, Houston and West Meadow Lakes.
Nelson said Houston, in particular, is ripe for growth and hopes to meet with public officials in the city of Houston and Mat-Su Borough to discuss ideas on how to get people financially invested into the city.
According to an informational sheet provided by the Alaska Division of Economic Development, the state considers the following factors when determining an area’s eligibility: community support, project feasibility, workforce readiness, alignment with existing initiatives, economic hardship, geographic representation, investment opportunity.
Below is a Q&A interview provided by Nelson via email to explain some of these concepts:
1) How do you think the workshop went?
“We felt the workshops were very well received by all who participated. There is a tremendous amount of interest in attending these educational workshops, so we are starting to schedule workshops for professionals and investors on a first come basis.”
Your highlights from the speakers (biggest takeaways): Jason and I work very closely to be able to present timely information as well as market information that is relevant?
The partnership I have with Alternative Wealth Management allows us to bring world class institutional grade properties and opportunities for Alaskan investors through the 1031 exchange from companies such as Cantor Fitzgerald. They are one of the world’s most respected names in the real estate brokerage and financing industry. We brought Mike Leydig, the Regional Vice President, here to talk about the opportunities Cantor Fitzgerald can offer and bring confidence to our investors here in Alaska.
One of the highlights from Jason Pueschel, our Chief Investment Strategist with Alternative Wealth Management, was the explanation of Delaware Statutory Trusts (or DSTs) and the flexibility we provide investors, CPA’s and Real Estate Professionals completing a 1031 exchange, such as deferral of capital gains, diversification of a portfolio, fractionalization of real estate ownership, and the ability to select a property on the 45th day of a transaction and the ability to leave “No Boot” on the table. The feedback we heard from participants was receiving better clarity on what a 1031 exchange is, understanding the process and options available for their clients. Because of these we have already begun scheduling more workshops to make the information available to additional professionals and investors.
How would you describe these opp. zones and the potential benefits they could have out here in the Valley?
There are huge potential benefits for the Valley through this program comes from multiple directions. The federal Tax Cuts and Jobs Act of 2017, which established the opportunity zones program, provide investors tax incentives to put their capital to work, with a goal to bring economic growth and jobs to these communities. Having capital to infuse into potential residential, commercial, and/or industrial projects, within the parameters of the program, would create and expand jobs, services, and revenue in eligible communities. However, this benefit expands to all Opportunity Zones in the State as well as investment opportunities all across the country.
6) How would you describe or diagnose the Valley’s current real estate market? Overall snapshot, prices, trends, pros and cons compared to other places, etc…
I’m a financial advisor, not a real estate professional. But I was born and raised here in Alaska and currently residing here in the Valley. It seems to me, the Valley is one of the fastest growing areas in the State, with pockets of growth in certain communities. From what I’ve been hearing, there is a normal healthy market here and there hasn’t been big swings, high or low, in value or transactions. There is new building happening, such as multi-family and commercial/retail developments, with concern about potential overbuilding in some areas.
Will there be more opportunity zones down the road?
There are still many questions to be answered. We are working with Senator Sullivan’s office to address questions and concerns we are hearing throughout the community and with the real estate and tax industries to provide financial advice to developers and interested investors. Interested parties are welcome to contact us at 907.495.1234 or via email at email@example.com, for more information.
People are looking for common sense, financial advice they can trust. Which is why I put financial education as cornerstone in my financial practice. I am expanding Diamond Willow Financial by bringing on additional support staff to accommodate for the growing needs of our clients. Providing workshops on topics such as 1031 exchanges and the Opportunity Zones, as well as other topics, goes to help my clients, and other professionals make more informed decisions. We plan on holding more workshops and being more involved in community events in the coming months and new year. We plan on working towards making future workshops on 1031 exchanges available for continuing education credits to professionals in the coming months.