Colorado Avenue Northwest Cooperative - Coop in DC
MI Casa, Inc. Affordable Housing Development Consulting Fernando Lemos Executive Director
Tenant Purchase Project <ul><li>TOPA law and Ownership Structure. </li></ul>Ownership: what does each resident own? OWNERSHIP RENTAL COOPERATIVE CONDOMINIUM Who owns the building? Private individual or corporation. The Cooperative Association The Condominium Association What does each resident own? No ownership. A share of the cooperative. This share can be sold or inherited according to the House Rules. Their individual apartment and it can be sold or inherited. Does ownership increase in value? No ownership. Limited-equity Co-op , up to 10% of the value of the share each year. Market coop dependent on the market. Dependent on the market.
Tenant Purchase Project <ul><li>Phases : </li></ul><ul><li>Meet the tenants and their building. </li></ul><ul><ul><li>Tenant Profile </li></ul></ul><ul><ul><li>Building Evaluation </li></ul></ul><ul><li>Feasibility Analysis. </li></ul><ul><li>Create a Development Plan </li></ul><ul><ul><li>Timeline </li></ul></ul><ul><ul><li>Financial Pro forma </li></ul></ul><ul><ul><li>Tenant Trainings </li></ul></ul><ul><ul><li>Acquire the property </li></ul></ul><ul><ul><li>Hire an Architect for Construction </li></ul></ul><ul><ul><li>Hire a contractor. </li></ul></ul><ul><ul><li>Start and Finish Construction </li></ul></ul>
Tenant Purchase Project <ul><li>Tenant Profile. </li></ul>INTRODUCTION This tenant profile summarizes the “Tenant Survey Forms” submitted by the current residents of 5610 Colorado Ave, NW. By evaluating the demographic and financial data, the profile incorporates information about the relationship between household and unit size, the financial capacity of the tenant households. The tenant profile helps to determine the feasibility of a project when analyzed along with an operating budget and a building evaluation. Section I – Households interviewed The building is presently composed of 36 units, of which 29 are occupied. The Association is composed of 29 households, and 19 (or 65%) of them submitted information for this survey. This survey presents a profile of the socio-economic characteristics of the residents of 5610 Colorado Ave, NW, including household income, household size, rent expenditures, affordable rent, source of income, and tenure which may be used to draw conclusions for the tenant association as a whole. Section II – Demographic Data The average length of stay for residents of 5610 Colorado Ave. is 7.6 years. Of the 19 households interviewed, 9 have lived in the building between 1 and 4 years, while 10 have lived there for 5 years or more. This shows a relative stability in the resident community. The average household size for the 5610 Colorado Ave. tenants is 3, which is compatible with the unit size in 14 out of the 19 surveyed apartments(*). The following chart shows in more detail, household sizes. The racial and ethnic composition of the tenants is divided between persons of African-American descent and more recent immigrants from Eastern Africa and Latin America. Of the surveyed households, 63% are Latin American immigrants, primarily from El Salvador and Mexico; 26% of households are African American and 11% African immigrants, primarily from Ethiopia.
Tenant Purchase Project <ul><li>Building Evaluation. </li></ul>PROJECT DESCRIPTION The subject is a single building located at 5610 Colorado Ave. N.W., in Washington, D.C. The building was built in approximately 1938. The building houses 36 units (efficiencies and one-bedroom units) with an approximate total area of 32,000. square feet. The building appears to consist of self-supporting masonry bearing walls and ceiling surfaces of plaster on wood partitions. All apartments have a mix of laminated and hardwood flooring, kitchens have vinyl flooring, and bathroom floors are ceramic tile. Landing floors and stairs are concrete. Heat in the building is generated by a central gas fired boiler with a heat exchange unit in each unit. Air conditioning is supplied through individual window units in each apartment. The building has one main entrance that provides access to an ample lobby where mailboxes are located. The unit mix and approximate sizes are as follows: Unit* Size** No. of Type (sq. ft.) Units (9) Efficiencies 570 Sq.Ft. (approx.) (27) One-Bedroom 650 Sq.Ft. (approx.)
Tenant Purchase Project <ul><li>Feasibility Analysis </li></ul>Financial Feasibility Summary I. Income Annual Income from Current rents $131,976 Less: Vacancy Loss (2.5%) $3,299 Additional Income $0 Net Collections $128,677 Operating Expenses $88,399 Net Operating Income (NOI) $40,278 II. Mortgage Supportable Net Operating Income (NOI) $40,278 Debt Service Ratio 1.1 Interest 8% Term 30 y. Available for Mortgage Payment $36,616 Supportable Mortgage (30 yr @6%) $610,270 III. Development Costs Acquisition $847,500 Construction $0 Soft Costs $118,159 Total Development Costs (TDC) $965,659 IV. (Gap)/Surplus Mortgage Supportable $610,270 Total Development Costs $965,659 (Gap)/Surplus ($355,390) NOI needed to support TDC $77,253 Total Annual income needed $165,652 Monthly per unit increase needed about 128% $187
Tenant Purchase Project <ul><li>Development Plan - Timeline. </li></ul>Benchmark # Area Task/Benchmark (in bold) Planned Begin Planned Due Actual Actual 15.00 Development Development Plan Approved 6/1/2007 2/13/2008 15.10 Development Work on Development Plan 6/1/2007 6/11/2007 15.30 Training/Mtg Development Plan presented and approved 2/13/2008 2/13/2008 16.00 Development DHCD Loan Application 6/15/2007 8/21/2007 16.10 Development Obtain Appraisal 6/15/2007 8/14/2007 16.20 Development Complete Environmental Phase I 6/15/2007 8/14/2007 16.30 Development Complete environmental Phase II 6/15/2007 8/14/2007 16.40 Development DHCD Loan Application Submitted 8/21/2007 8/21/2007 17.00 Development Settlement: Association Acquires Property 9/1/2007 11/30/2007 17.10 Development Bridge Loan Applications Submitted 9/1/2007 9/1/2007 17.20 Development Work with attorney on settlement 9/1/2007 11/29/2007 17.30 Development Obtain insurance 9/15/2007 10/10/2007 17.40 Development Sign agreement with Management Company 9/16/2007 10/1/2007 17.50 Development Termite Inspection 9/24/2007 10/1/2007 17.55 Development Amhof failed commitment. We Got an extension 10/12/2007 10/12/2007 17.56 Development Corporate seal 11/26/2007 11/28/2007 17.57 Development Certificate of good standing 11/28/2007 11/28/2007 17.60 Development Receive final commitment letter(s) 11/28/2007 11/28/2007 17.70 Development Coop Acquires Property 11/30/2007 11/30/2007 18.00 Management Oakes Management Transition 11/30/2007 1/29/2008 18.10 Management Oakes get infromation from former management company 11/30/2007 12/10/2007
Tenant Purchase Project <ul><li>Development Plan – Financial Pro-forma. </li></ul>DEBT Primary Debt Service Financing: year 1-10 Type of Funds Requested Source of Funds (Name of Lender) Debt Cover Annual Interest Am Loan Amount Full Pa Construct. Loan (Ppal only for 15 yrs) DHCD Average $ 31,023.81 0.000% 15 $ 3,196,811 Acquisition loan DHCD $ 1.10 $ 95,935.13 1.000% 40 $ 3,150,000 2047 Total Debt Service Financing $126,958.94 $ 6,346,811 Primary Debt Service Financing: year 16+ Type of Funds Requested Source of Funds (Name of Lender) Debt Coverage Ratio Annual Interest Am Loan Amount Full Pa Construction Loan (amortizing in 40 yrs) DHCD $ 1.10 $ 92,879.49 1.000% 35 $ 2,731,454 2057 Acquisition loan DHCD $ 1.10 $ 95,935.13 1.000% 40 $ 3,150,000 2047 Total Debt Service Financing $188,814.63 $ 5,881,454 Original Principal Acquisition Loan $ 3,150,000.00 Principal Acquisition Loan on 1/1/2010 $ 2,987,850.00
Tenant Purchase Project <ul><li>Board Development roles </li></ul><ul><li>We own the building! </li></ul><ul><li>Select a management company </li></ul><ul><li>Select an Architect </li></ul><ul><li>Managing training for coops </li></ul><ul><li>Development Plan – Tenant Trainings . </li></ul><ul><li>Managing the Association </li></ul><ul><li>Preside membership meetings </li></ul><ul><li>Sign documents </li></ul><ul><li>Approve circulars and correspondence </li></ul><ul><li>Administrar la Asociacion </li></ul><ul><li>Presidir las reuniones generales </li></ul><ul><li>Firmar documentos </li></ul><ul><li>Aprobar circulares yc orrespondencia </li></ul>President: roles and responsibilities Presidente: funciones y responsabilidades
Tenant Purchase Project Development Plan Architect Contractor Construction