At Frontier Wealth Strategies, we believe in finding opportunities which make an impact for our investors and the companies we find as a beneficial investment. We have listed the strategies we currently work with to help our clients create cash flow, and overall growth of their net worth utilizing tax mitigation strategies. These approaches are great opportunities to build wealth, but as with all investments, understanding the risk is the key to success.
- Real Estate Investment Trust (REIT): If you believe in investing in real estate but are not a fan of the responsibility of being a landlord, this investment opportunity might be right for you. The offerings typically consist of a mixed portfolio of specialized real estate which could include apartment buildings and housing, office buildings, shopping centers and hotels. You can find a portfolio which best suits you as well. Commercial real estate or mixed housing. As an investor, you will receive monthly or quarterly income streams as well as updates to the performance of the portfolio. We have found these programs to be a great solution for cash flow generation.
- 1031/DSTs (Delaware Statutory Trusts) Works like a typical 1031 exchange, allowing an owner of real estate to engage in a sell of their current rental property and invest it into another. The difference in a 1031/DST sponsored offering are the types of products. You can invest in single buildings, multiple, mixed use, hotels, etc. You still have an investment in rental property creating a nice income stream, but you eliminate the hassle of dealing with tenants directly as a result.
- Qualified Opportunity Zone Funds (QOZF): This investment program was created under the Tax Cuts and Jobs Act of 2017. Thousands of low-income communities in all 50 states, the District of Columbia and five U.S. Territories have been designed as Qualified Opportunity Zones. This strategy allows an investor with capital gains, to defer taxes temporarily from the year incurred. The capital gains can come from many sources and the beauty of this strategy is you only need to invest the gains, not the entire proceeds, which is common in real estate 1031’s. There are over 8,700 QOZ funds across the country, with different state-specific tax treatments, thus making it essential you understand where you are investing, what type of project and lastly, making sure to work with an experienced and vetted operator.
- Business Development Company (BDC): A BDC is a type of closed-end fund that makes investments in small and medium-sized companies, as well as distressed companies. Many BDCs are publicly traded and are open to retail investors. Some are sold via a Private Placement Memorandum (PPM). Most BDCs issue loans or purchase stocks or convertible securities from the companies they invest in. This type of investment can give the shareholder access to a higher income stream. You also don’t need to be an accredited investor and liquidation can usually occur quarterly. The high-risk to this type of investment is the size of the underlying companies and how the projected outcome should materialize. Understanding the risks and your tolerance should be fully explored before investing.
- Passive Income Generator & Passive Activity Loss (PIGs & PALs): Have you found yourself unable to use losses for other investments against your passive income? Per the IRS, passive income must be matched with passive activity losses, in order to minimize and reduce the tax on this income. IRS regulations prohibit using passive losses to offset earned or ordinary income. To help you eliminate this situation you could talk with one of our CFPs at Frontier, who has access to these opportunities and can assist you in potentially creating tax-free income from these investments.
- Private Equity (PE): This is where you could invest your risky or opportunistic sleave of your portfolio. Think “Big Risk – Big Reward”. Seed funding or early rounds of investing are considered risky and are only offered to high net worth accredited investors. As with all of our programs, we look at seed funding as a highly risky investment opportunity and only introduce our clients after we conduct a thorough examination of the offering. We also co-invest in most of the programs we have offered in the past, which we fully disclose to our investors, not to sway the purchase, but to show our money is invested because we are convinced in the long-term opportunity.
- Charitable Donations; Fee Simple or Conservation Easement Real Estate; This is one of the most aggressive tax-mitigation strategies in existence, allowing you to shield up to 30% of your adjusted gross income (AGI). This is the same allowance given when donating cash, antiquities, and art to a charity. If you would like to learn about how to legally lower your overall tax obligation, we would like an opportunity to help educate you about the options and risks associated with these types of strategies.
Frontier Wealth Strategies performs a thorough due diligence review on all investment opportunities to understand the risks and rewards before sharing with our clients. Once we have identified an appropriate opportunity, we only recommend investing after we understand your needs and values, insuring we can match the best investment opportunity for you.
As with all investments, there is risk. Understanding the risk associated with an investment and your tolerance and time frame is important to us at Frontier Wealth Strateiges. A discussion of the finer points of each opportunity should be thoroughly explored before investing.
Engaging with your advisor, CPA, accountant, and legal counsel is advised before making any decision
Frontier Wealth Strategies does not work on commission for any of our investment opportunities.
Michael B. Hansen CFP™, founder of Frontier Wealth Strategies reviews how investing in conservation easements may benefit your financial planning strategy.
Michael B. Hansen CFP™, provides an overview of opportunity zones and how it may fit within a financial planning strategy.
DSTs and Your Financial Planning
Michael B. Hansen CFP™, provides an overview of 1031 (or DSTs) tax strategies to help you save on real estate capital gains taxes.
Fiduciary Investment Advice
Michael B. Hansen CFP™, a founding partner at Frontier Wealth Strategies shares how fiduciary investment advice helps your financial planning strategy.
Passive Activity Losses and Passive Income Generators (PIGs & PALs)
Michael B. Hansen CFP™, is a registered investment advisor with Frontier Wealth Strategies. He reviews strategies to potentially offset passive activity losses.