I bought my 1st property when I was in my early 20’s. I purchased a 2nd multi-family investment five years later. At the time of my father’s death, he owned four properties. My father bought his first house, DURING redlining. I didn’t realize this until he passed how badass this was. He owned two single-family houses, one duplex, one triplex and had recently sold a parcel of land. When he got sick, he deeded all of the properties to me.
My dad understood real estate more than anyone I knew. He was a front end real estate guy, dealing with the everyday stuff. I kept up with the back end, real estate trends, gentrification, and how properties are marketed to sell. He deeded these properties to me because he knew I had an understanding of the trends, I would do what was right, and I wouldn’t piss away his life’s work.
I also had an understanding of deeds that he didn’t have. The new deed was set up that, upon his demise, the properties would automatically be under my ownership. If he didn’t die, we would have joint ownership. This type of ownership would allow us to pool our resources together which was huge. Dad never thought he was going to die and was looking forward to realizing his dreams with the properties he’d attained. Either way, DEEDS are important and pooling resources is as well.
After my dad died, all of the properties were automatically owned by me. The aggressive pursuit of these properties ensued. So while I was still grieving, I had family threatening to sue me for “their cut” and outside investors pursuing aggressively. It was so much to deal with, and I was so overwhelmed.
I was puzzled because these properties were in mixed and or black working/middle-class neighborhoods. They were special to us, but beyond that, they were nothing overly special.
I have a gift for figuring out patterns, looking at trends, and that kind of thing. That’s where I was my dad’s strength, in this real estate thing. I would guide him on what the market was doing and give him an idea of what neighborhoods seemed to be in states of gentrification. It took me one year and a lot of digging to find out what the pursuit was about.
It seems that 45 put a clause in the 2017 tax cut bill. That allows folks to sell and or shift investments to avoid capital gains if they invest in an opportunity zone. They can essentially pick up a property in one of these areas after dumping investments, and instead of paying capital gains on this money, they invest in an opportunity zone. They only have to hold the property for ten years then they can dump it. Until they dump it, that property is a tax shelter.
Philadelphia is a heavily gentrified city. The tax bill for Philadelphia opportunity zones, will increase gentrification. I have very mixed feelings about gentrification. On the one hand, it is horrible because it will inevitably displace some people. On the other hand, as a property owner, it is financially exciting because it’s about profit.
I don’t know that there’s a right or wrong way to view any of this, but I do know it is important to pay attention to the policies that are put in place and the politicians that push them. All of this impacts us, whether we realize it or not. You can’t claim not to “be political” because policies put in place impact you. This policy impacts everyone who doesn’t own their own property whether they are “political” or not.
Consider buying a property because the gentrification and lack of affordable house will only get worse. Pool your money with a trusted friend or family member to purchase your own property, if you have to. Also, don’t sell grandma’s house. ALL of this has shifted my plans.
I would love to know your thoughts on gentrification, real estate and tax breaks for the rich who participate in gentrification. Reach out, let’s chat on FB, IG, and Twitter. Until then, don’t sell grandmas house.
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