What should I think about when selecting these funds?
This will be tough for you to accomplish. You'll need to ask around and seek out these types of funds. To my knowledge, there is no such fund marketing to the broader investing public. I would consult private equity and family office resources to try and find one of these. Those two investor types have proven the most likely to form QOZ entities for the purpose of investing in businesses instead of real estate.
The biggest benefit is the tax-free nature of the gain or the sale of the reinvested business. Pick something the is a good business and that will likely appreciate in value.
Go to special sites that lists QOF that have being established. To my knowledge there are a couple of them.
Novogradac has a listing of national funds. I would look at the track record of the individuals involved and see if they have had other successful exits. Be sure to require annual audited financial statements and study the pro forma and assumptions made in great detail.
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