RFP and procurement; acquisition; sales contracts;
Income compliance- program income; environmentals;
Will the local government kick in- what are the rents- will it cash flow. Local governments need to kick in a large subsidy – no tax credits or other money available. Once an affordable property goes through foreclosure, the restrictions are erased- the LURAs etc that were in the mortgages. If you do a deed in lieu, the restrictions stay in place. Vultures will pay more money if the restrictions fall away.
What are the operating expenses? Development budget issues. How will you fund it? What is the timing? Do you need bridge financing? From where? What are the risks?
Sorry state of these properties- code problems, appliances and copper missing, mold, water damage, elevators don’t work, flood zone- rehab requirements or trigger new codes. Previous owner removed computers, etc. Wood frame.
Income levels of current occupants- if they are over 50% ami… Just because its foreclosed and you have money does not mean you want to own this property. Soft market all over the state.
50% AMI requirements – Do you have to move existing tenants out? Relocation during rehab.
Nonprofits don’t know what they don’t know. This is new territory for many- owning and managing supportive or LI housing property PLUS the foreclosure difficulties.
Need to have relationships with REO departments, RE agents, lenders
Nsp Rentals Eskra And Humburg
Top Ten List for NSP Rental Projects Hana Eskra and Jack Humburg
# 10. Working with Local Governments and Their NSP Rules