The opportunity, in brief
Opportunity Zones were created to channel private capital into communities that need it — and the 2025 legislation (“OZ 2.0”) sharpened the incentive: roll an eligible capital gain into a qualified fund, defer the tax on that gain, and if you hold the investment for ten years, all the growth comes out free of federal capital gains tax. For clients sitting on large, highly appreciated positions, it is one of the few remaining ways to rebalance without writing a check to the IRS first.
Hillpointe is the manager we’ve chosen for that strategy. They build brand-new workforce housing across the Sun Belt — not luxury towers, but quality apartments for the teachers, nurses, and firefighters who’ve been priced out of everything built in the last decade. And they build it differently: their own construction arm, their own materials sourcing, their own management. The result is a cost basis competitors struggle to match, and a fund that works as an investment even before the tax benefits.
Watch first — two short briefings
Two videos, in order: first, how the opportunity zone strategy works — then the Hillpointe story in the founders’ own words.
The recommendation
For clients holding large, highly appreciated positions, this fund offers a way to roll capital gains into brand-new workforce housing across the Sun Belt — deferring the tax on those gains, reducing stock-market exposure, and putting capital into income-producing real assets that don’t trade with the market. Under the opportunity zone rules, growth in the fund is free of federal capital gains tax at the ten-year mark.
Hillpointe is a fully vertically integrated developer — its own general contractor, direct-to-manufacturer materials sourcing, and in-house management — which allows it to build at what we believe is a significant discount to competitors, at attainable rents for working families. Nearly 90% of apartments built over the past decade were luxury class; these projects help close that gap.
- Strategy: ground-up workforce multifamily housing across the U.S. Sun Belt, in designated opportunity zones
- Target: 14.0% net IRR over a 10-year horizon — projected, not guaranteed
- Tax: eligible gains deferred; growth free of federal capital gains tax at the 10-year mark
- Target fund size $100M · quarterly operating distributions
- Manager: Hillpointe Asset Management — principals have developed 10,000+ housing units
Five reasons we like it
- The investment stands on its own. Brand-new workforce housing at attainable rents, built at a cost basis competitors struggle to match — under its own pro-forma the fund projects a 14% net IRR over ten years. Projected, not guaranteed.
- The impact is real. Capital doesn’t just grow — it puts attainable housing in communities that need it.
- It reduces equity risk. Realizing gains in large appreciated positions and moving the proceeds into income-producing real assets takes stock-market exposure off the table.
- It makes the portfolio more tax-efficient. The federal bill on rolled gains is deferred, and growth after that is free of federal capital gains tax at the ten-year mark.
- It can end the tax drag of legacy funds. Some widely held growth funds distribute taxable capital gains year after year — taxes owed whether you sell a share or not. Exiting shuts that meter off permanently.
Key risks
- Illiquid — a ~12-year fund term; capital is committed for the duration
- Development risk — construction cost, timeline, and lease-up risk across the pipeline
- Projections are targets only — actual results may differ materially from the 14% net IRR target
- Opportunity zone tax benefits depend on individual circumstances and future law — consult your tax advisor
Questions, or ready to discuss how this fits your plan? Call us at (424) 260‑1551 or email info@second50financial.com.
This material is provided exclusively to clients of Second 50 Financial, LLC for informational purposes. It is not an offer to sell or a solicitation of an offer to buy any security, and it is not investment, legal, or tax advice. Interests in Hillpointe Opportunity Zone Fund II, LP are offered solely by its confidential private placement memorandum and related offering documents, which contain material information — including risk factors, fees, and tax disclosures — not included here and which control in the event of any conflict. Hillpointe is not affiliated with Second 50 Financial, LLC. Targeted or projected returns (including the 14.0% net IRR target) are provided by the fund’s sponsor as an indicator of how it intends to manage the fund, are not a guarantee or indicator of likely performance, and actual results may differ materially. Private investments are illiquid, speculative, and involve a high degree of risk, including possible loss of the entire investment. Opportunity zone tax benefits depend on individual circumstances and state conformity; clients should consult their own tax advisors. Not all clients are eligible for, or will be offered access to, this investment. Past performance is not indicative of future results. Please do not redistribute.