Join us for a recap as Schweikert and Caliber discuss investments. On February 1, 2021 Chris Loeffler, CEO of Caliber Cos Inc., had an engaging discussion with Congressman David Schwikert.
Schweikert and Caliber Discuss Investments in Opportunity Zones
Among some of the vital things they discussed, Congressman Schweikert and Mr. Loeffler emphasized how high net worth individuals can significantly hedge their tax burden by investing in opportunity zones while also benefiting the community.
How does this serve our communities? Some communities have been economically neglected and these investment opportunities either accessed through real estate funds, opportunity zones (funds) and venture funds, which is essentially investing in a business within a project. These investments help to accommodate innovative thinking, rather than being just another way for the rich to become richer – some of the estimated statistics/benefits include:
- $100 billion will be deployed over the next 10 years with $75 billion in just 2 years;
- Decreased poverty rates by approximately 11%;
- Increase in new housing up 1.1%;
- Create new wealth of approximately $11 billion;
- 35 million people are anticipated to benefit;
- Creation of 500 thousand jobs;
Schweikert and Caliber Discuss Investments – Taxes and Regulations
Touching on taxes, regulations, and opportunity zones Mr. Loeffler asked Schweikert what major changes have occurred and what he thinks is coming in the future. Congressman Schweikert responded by saying that good SEC legislation for qualified investors and more opportunities for non-accredited investors create more inflows with more equalization. Congressman Schweikert noted, “with new regulations real estate agents at some point could invest in real estate deals.” Referencing the opportunity zones, he thinks 1031 platform remains stable with a lot of liquidity for deals.
According to discussion, it was said that there is a lot of “chatter” along the halls in Congress regarding Opportunity Zones. Noting there is a strong appetite with less opposition. Timelines are being extended and spending requirements are being evaluated, but he feels not much will come to fruition for several months.
Some of the questions raised from the audience included:
Prop 208 and Congressman Schweikert’s thoughts to which he replied, “It was a disaster for Arizona.” He believes the passing of this proposition will cause Arizona to lose revenues and as a result could end the past 10 years of economic vitality that the State has experienced. He believes that business owners are and will move away to other states that are more tax friendly. A trend, quite frankly, we have seen a lot of over the last 10 months.
Another question posed was if there had been any discussion as to whether Arizona would adopt the IRS guidelines on deductibility of PPP expenses?
Congressman Schweikert said that hopefully new legislation will lead to positive resolutions, and it remains to be seen. He added that since the pandemic hit, it has been a brutal environment where it almost seems to be erasing the stunning success we had in 2018 and 2019; post tax reform revenues were supposed to crash, and they did not. For the first two years in modern times income and equality improved creating miraculous things for the working people. Hopefully, all that progress is not erased and company’s like Caliber will be able to prosper in the current environment. Things are improving, but not quickly enough. Congressman Schweikert added, there are many bills coming through ways and means, which he believes is erasing the positive things our state and nation have experienced in the past. He concluded by saying, “Transparency and truth is the key.”, which is what is echoed in the halls at Caliber.
Mr. Loeffler opined that the capital markets landscape has opened up to a broader audience of investors and hopefully that will continue to expand. Unfortunately, we are living in a society of headlines and news media is not reality.
Mr. Loeffler continued with, collaboration should lend itself to change and we should be inclusive and collaborate to continue this positive momentum. He encouraged everyone listening in to send questions and Caliber will try to get the best quality answers for its investors and other key stakeholders.
According to Congressman Schweikert, HUD has evolved over the last several years and continues to do so, which helps to be more effective in helping their communities. With an emphasis on accountability and transparency – sound familiar? – HUD conducts what they refer to as clean audits that have benefitted the programs and grants they offer. Congressman Schweikert added that modernization of HUD’s processes along with better technological solutions will make HUD much more efficient, which should translate directly to better resources for the community.