The Gulf Opportunity Zone Act of 2005 (H.R. 4440 passed by Congress on Dec. 16, 2005, and signed by President Bush on Dec. 21, 2005) establishes tax incentives and bond provisions to rebuild the local and regional economies devastated by hurricanes Katrina and Rita. The act is commonly referred to as the "GO Zone Act."
Ever since Congress enacted the Go Zone Act, South Louisiana along with our neighbors Mississippi, Alabama and Florida have been the target of intense interest from far away investors. They are coming here mainly from California, Nevada and Arizona to wisely take advantage of some incrediable investment oppurtunities. Some of them are coming in as part of "investment groups" that are attempting to buy properties in bulk.
As an exclusive buyer's agent I have had the oppurtunity to represent some of these investors. It has been a mixed blessing! Don't get me wrong I am very thankful for the business and hope to do more in the future, but I do find that most of the investors are being misinformed by the investment groups that claim to be the "experts" in the Go Zone initatives and the ways to capitalize on the incentives. The market in the Baton Rouge area is strong and there are very few(if any) "deals" in our area right now. Most of the websites that are aimed at the out of state groups suggest making offers on properties that are 10%-15% below the list price; while that might be a great strategy in some markets, it is a sure fire way to a quick rejection in our market. I find that I am spending a majority of my time reeducating the investors on the true state of our local market and even then they somewhat still don't believe me because my info is exactly the opposite of the "experts"!!!
I know that this sounds like I am only griping about a loss of time explaining something to my client but I assure you that is not my concern. Just this week a couple of my investors targeted seven properties that matched the criteria that we were searching for. I supplied them with all of the market data needed to make good offers and then watched them revert back to what they were "taught" by the experts with the investor group. They made low-ball offers on all seven properties. ALL of the offers were rejected. Long story short they were beat out on three of the properties and ended up paying close to full price on two. It ended with my clients stating that they wished they had met me and learned the true Baton Rouge market BEFORE being misinformed by someone claiming to have knowledge that in realty they did not possess.
My advice to any one who is considering taking advantage of the Go Zone Act is 1. DO IT!! It is a great oppurtunity and 2. Find a local buyer's agent who is versed in the Go Zone and has strong market knowledge to lead you in the right direction without unrealistic expectations.