Since the year-end deadline for rolling over my capital gains into an Opportunity Zone investment is coming up, are there certain questions I should ask before selecting a QOF to invest in to make sure it’s safe and legit?
You should see the QOF's PPM and evaluate that document. If properly constructed, the PPM should tell you everything you need to know. It'll also give you contact information for the principals to ask any questions that are on your mind. You might want your legal and tax advisors to evaluate the document with you.
Here are a few questions to ask the fund sponsor: what is the yield? How is the promote structured? What fees will the Sponsor or its affiliates benefit from? Are additional capital calls contemplated? There are a lot more issues to consider.
As with any private investment, due diligence is paramount. You should consult your professional advisers (tax, legal, and RIA) before signing documents or transferring funds.
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