Liquid Real Estate Tax Shelter Is Today’s Sweet Spot

The selling pressure in the stock market is now getting into the muscle tissue of the long-term bull trend. CEO confidence declined materially for the current quarter as reported by the Conference Board Measure of CEO Confidence™ on May 18. It is no surprise that the same set of issues were highlighted for the more cautious outlook—rising prices and supply chain snarls that the Russian-Ukraine war and Covid-19 lockdowns in China have only made worse.

A couple of notable Wall Street chief investment strategists that called this stock correction properly see further downside risk of anywhere from 10%-25%. Considering the damage done in the past eight weeks, I believe FAANG and big cap growth stocks that rule the major averages will remain in the doghouse for the next four months or so, at least until the Fed is done tightening short-term rates and maybe with some signs of peak inflation emerging.

Against this backdrop, with the S&P 500 trying to hold support at the 3,900 level, there is a pattern of capital outflows from equities as long-term investors seem to be cashing in some of their bull market gains of the past twelve years. Bank of America reported some hefty outflows of capital from equity markets this past week.

The $5+ trillion in pandemic-era stimulus created out of thin air by the Fed, Congress and central banks acted, in my opinion, like a rogue wave of investing that inflated stock prices to where the S&P 500 traded with a P/E of approximately 24x when it topped out in December 2021. Now the tide is out, and it seems to be a much bigger tide than any on record.

Investors who are taking action and have booked stock market gains in the last 180 days should consider reinvesting those gains into a Qualified Opportunity Zone Fund (QOF). Belpointe PREP, LLC (NYSE American: “OZ”) is positioned in what I believe is the super sweet spot of the broader real estate investment sector. Belpointe PREP is building and acquiring multi-family residential Class A luxury apartment dwellings within opportunity zones (OZs) in cities like Nashville, TN, and Sarasota/St. Petersburg, FL.

During this massive ongoing consolidation, a tight labor market continues to support solid wage gains, especially in markets where migration of companies and workers are notable and rent growth is solid for owners of multi-family residential properties. I believe this sweet spot within the broader real estate market is as close to recession-proof as can be argued for. Rent increases are usually tied to inflation, resulting in increased cash flows and higher total returns to investors.

In addition, Belpointe PREP’s management team is actively seeking to acquire other QOFs that have stabilized their properties. Our acquisition team is also actively looking for sellers of properties within Opportunity Zones. Belpointe PREP has cash and equity currency in the form of its “OZ” units to provide the liquidity that many selling parties may desire.

Belpointe PREP (NYSE American: “OZ”) is the first and thus far only publicly listed QOF and it requires no paperwork or documentation to invest. Belpointe PREP provides investors with the ability to pair off 2021 year-end gains (as well as year-to-date 2022 gains), using a 180-day look-back window, and reinvest those capital gains to defer taxes, in addition to offering investors an opportunity for growth and income for the next five years, out to December 31, 2026, where all capital appreciation and the majority of pass-through income may be tax-free.

The window to shelter 2021 capital gains narrows with each passing day—going back, as of this writing, to November 28, 2021. There is still time to allocate year-end 2021 capital gains in all asset classes: stocks, bonds, real estate, sale of a business or a partial stake, precious metals, crypto profits, livestock, and collectibles; they all qualify and realized capital gains from any of them can be offset with like-kind dollar amount purchases of Belpointe PREP (NYSE American: “OZ”) units.

Cody H. Laidlaw
Editor-in-Chief
Belpointe OZ
255 Glenville Road
Greenwich, CT 06831
T: (203) 883-1944
E: IR@belpointeoz.com

Disclosure: Cody H. Laidlaw is the Chief Investor Relations Officer. Cody is also an investment advisor representative with Seaside Advisory Services, Inc. (d/b/a Seaside Financial & Insurance Services), a SEC registered investment adviser offering advisory accounts and services, and holds a long position in Belpointe PREP, LLC’s Class A units.

Important Information and Qualifications

Belpointe PREP, LLC (“Belpointe PREP”) has filed a registration statement (including a prospectus) with the U.S. Securities and Exchange Commission (SEC) for the offer and sale of up to $750,000,000 of Class A units representing limited liability interests in Belpointe PREP. You should read Belpointe PREP’s most recent prospectus and the other documents that it has filed with the SEC for more complete information about Belpointe PREP and the offering

Investing in Belpointe PREP’s Class A units involves a high degree of risk, including a complete loss of investment. Prior to making an investment decision, you should carefully consider Belpointe PREP’s investment objectives and strategy, risk factors, fees and expenses and any tax consequences that may results from an investment in Belpointe PREP’s Class A units. To view Belpointe PREP’s most recent prospectus containing this and other important information visit sec.gov or belpointeoz.com. Alternatively, you may request Belpointe PREP send you the prospectus by calling (203) 883-1944 or emailing claidlaw@belpointe.com. Read the prospectus in its entirety before making an investment decision.

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