New Opportunities In Public Housing 3 Amoroso

  • 193 views
Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
193
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
2
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Acquisition Rehab – Bonita Fountains aka Eaglewood Apartments, Orlando Florida
  • 2. Bonita Fountains Finance Strategy
    • Property initially listed for $67,000,000 or $119,642 unit
    • Spent $ 27,500,000 acquisition $49,107 unit
    • Construction/Permanent Loan $22,500,000
    • Equity $10,316,595
    • Brownsfield VCTC -$500,000
    • Brownsfield VCTC - $500,000
    • Future bldg materials sales tax -$400-500,000
    • Acquired @ $27,500,000 and developed @ $58,601 unit all including 44 acre tract
    • environmental cleanup
    • rehabilitation
    • infrastructure
    • Value
    • 44 acres of land w/ entitlements for 540 units
    • 2,000 LF new road and infrastructure for all new units
    • 560 apartments built in 1987 and 2000
    • Created all new infrastructure for next developments
    • Capture sales tax on future building materials
  • 3. (2) Strategy - Bank owned real estate finding the foreclosed properties
    • Knowing where to look
    • Where does the information come from?
    • What is public information and what is not
    • Who controls the asset?
    • Understanding what went wrong
    • Determination of value*****
    • Financing limitations
  • 4. Where to look for Bank REOs
    • http://bankofamerica.reo.com/search/propertysearch.aspx
    • https://www.citimortgage.com/Mortgage/Oreo/SearchListing.do
    • http://mortgage.chase.com/pages/other/co_properties_landing.jsp
    • Top real estate brokerage firms bid to be the listing agent to remarket bank owned properties
    • Some banks direct sell
    • All bank websites have basic information and contact
    • Other websites have general info on some bank owned assets such as Loopnet, and broker controlled websites
  • 5. What are the issues to consider on an REO?
    • Existing asset value is determined by trailing 3 or 12 month NOI (from a lender perspective to acquire debt and finance) less debt available to acquire because performance is below market
    • Many buyers are using double digit cap rates for NOI analysis due economy eroding values
    • Concessions on rent almost always devalue income stream
    • Include reserves above the line when determining value
  • 6. Trend Analysis – what is it worth? Projected NOI / Total Investment Value to Project Investment Projected NOI / cap rate Year 3 (2011) proj. value on NOI Projected Cash flow / cap rate Year 3 (2011) proj. value on cash flow Cap Rate determined by market Sale Cap Rate used in Model Project NOI Year 3 (2011) NOI - projected Cash flow at stabilization Y 3 Year 3 (2011) Cash Flow -projected   Stabilized Valuation Cash flow on trailing 12 / purchase price Cap Rate on Trailing 12 mos. NOI Trailing 12 / purchase price Cap Rate on Trailing 12 mos. Cash Flow Income- Expense Trailing 12 months NOI Income – expenses and reserves Trailing 12 months Cash Flow XXXXXXXX Going In Purchase Price   Acquisition Cap Rate Cap Rate Analysis  
  • 7. Trend Analysis – what is it worth? 104.6% Value to Project Investment $34,327,750 Year 3 (2011) proj. value on NOI $32,577,750 Year 3 (2011) proj. value on cash flow 8.00% Sale Cap Rate used in Model $2,746,220 Year 3 (2011) NOI - projected $2,606,220 Year 3 (2011) Cash Flow -projected   Stabilized Valuation 4.09% Cap Rate on Trailing 12 mos. NOI 3.47% Cap Rate on Trailing 12 mos. Cash Flow $919,763 Trailing 12 months NOI $779,763 Trailing 12 months Cash Flow $22,500,000 Going In Purchase Price   Acquisition Cap Rate Cap Rate Analysis  
  • 8. Conclusions to REO acquisition
    • Must have access to debt
    • Debt underwriting more stringent than typical – less debt available
    • Must have access to equity***
    • Economy has changed all of the rules!
    • If you can buy right on an REO – great opportunity!