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Preserving Rental Housing in     Challenging Times                      Presented By:                 Tanya Eastwood   Gre...
WHO IS GREYSTONE?
What We Do Preservation of multiple properties under one transaction.                     How do we do it?                ...
Portfolio vs. Single 9% LIHTC TransactionPros:• Major impact to large class of real estate (rural) … 8 to 45 preservations...
Portfolio vs. Single 9% LIHTC TransactionCons:• Costly transaction• Volume of work• Requirements of multiple lenders and s...
Direct Benefit to Owners / Operators Rehabilitation and Preservation of Existing Asset Improved Marketability for Reside...
How does it all work?• Pooled bond issue (but no cross)• Take the good with the bad – strong with the weak even weaker ma...
How to Choose PropertiesIn no particular order …. Include good with the bad (do not “cherry pick”)• Physical needs• Cooper...
North Carolina Housing Finance Agency Multifamily Housing Revenue BondsSOURCES OF FUNDS       Tax Exempt Bonds            ...
Sample Renovation                       Before & After Example(Typical kitchen with all Energy-Star rated appliances, soli...
Sample RenovationBefore & After Example(Typical ADA compliant bath)
Sample RenovationNew sinks ready to be installed
New HVAC systems                             New HVAC ductwork where none previously existed          New water heater    ...
Sample RenovationBefore, During & After Example(Typical Roof and Siding Replacements)
Sample Renovation Before & After Example (Typical Exterior Upgrades)
Sample Renovation Before & After Example (Typical Exterior Upgrades)
Sample Renovation Before & After Example  (Typical Exterior Updates)
Sample Renovation Before & After Example(Typical Section 504 Updates)
Sample Renovation Before & After Example(Typical Playground Upgrades)
Sample Renovation Before & After Example(Typical Playground Upgrades)
Sample Renovation Before & After Example(Typical Mail Facility Updates)
Sample Renovation  Before & After Example(Replacement of Retaining Walls)
Words of Wisdom• Pick your team wisely• Communication, communication, communication• Build in hedges• Educate residents ea...
Contact InformationFOR MORE INFORMATION, CONTACT      Tanya Eastwood      Managing Director      Greystone Affordable Hous...
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A6 preserving rural rental housing p pt - gahi

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Tenants in USDA-financed rentals – the majority of whom are elderly –
depend on their affordable homes, but resources and policies regarding
preservation of these developments are changing. Panelists will discuss
USDA policies as well as strategies for preservation in the current economic
climate.

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A6 preserving rural rental housing p pt - gahi

  1. 1. Preserving Rental Housing in Challenging Times Presented By: Tanya Eastwood Greystone Affordable Housing Initiatives, LLC Raleigh, NC 27607
  2. 2. WHO IS GREYSTONE?
  3. 3. What We Do Preservation of multiple properties under one transaction. How do we do it? HENRY FORD MODEL
  4. 4. Portfolio vs. Single 9% LIHTC TransactionPros:• Major impact to large class of real estate (rural) … 8 to 45 preservations per year compared to 1 or 2• Spread fixed transaction costs• Remove properties from competitive round• Creates jobs / public profile / local investment in small rural markets that otherwise get very little attention• Recapitalizes & resizes reserves based on actual need• Allows sellers to exit and close out funds – stronger negotiating power
  5. 5. Portfolio vs. Single 9% LIHTC TransactionCons:• Costly transaction• Volume of work• Requirements of multiple lenders and state agencies (sometimes with competing agendas)• Sufficient third party funding – sometimes difficult to find• Tenants in place• Lengthy process• Not for everyone
  6. 6. Direct Benefit to Owners / Operators Rehabilitation and Preservation of Existing Asset Improved Marketability for Resident Retention and Attraction Portfolio Structure Allows for Volume Unavailable through 9% Cycle Reduced Operating Expenses and Improved Maintenance Efficiencies Reduced Liabilities and Potential for Capital Calls Increased Realization of Limited Dividend (“RTO”) Financial Benefit $ Developer Fees $ Potential for Sales Proceeds $ Affiliated Businesses Such as Management Company, Construction Company, etc.
  7. 7. How does it all work?• Pooled bond issue (but no cross)• Take the good with the bad – strong with the weak even weaker markets still needed housing• “Back of the envelope” feasibility analysis – determine estimated proforma rents (confirm with boots on the ground)• Satisfy minimum thresholds – UW, Design, etc.• Adjust within portfolio – fixed costs, equity, etc.• Communicate with all parties – seek harmonization with all• Validate assumptions with independent third party reports
  8. 8. How to Choose PropertiesIn no particular order …. Include good with the bad (do not “cherry pick”)• Physical needs• Cooperative sellers• Strong markets (able to support some rent growth)• Out of 15 year compliance period; considered “at risk”• QCT / DDA (a plus, but not required)• Rental Assistance (a plus, but not required)• CRA Markets
  9. 9. North Carolina Housing Finance Agency Multifamily Housing Revenue BondsSOURCES OF FUNDS Tax Exempt Bonds 13,901,000 RD 515 Debt (Assumed) 11,553,901 Owner Contribution 137,505 LIHTC Equity (4%) 3,133,794 Deferred Developer Fee 312,640Total Sources of Funds $29,038,840USES OF FUNDS Acquisition Costs $12,644,501 Rehab Costs $10,972,125 A&E and Pre-Development Costs $675,643 Legal & Financing Costs $1,524,068 Soft Costs $2,691,906 Reserve and Escrow Costs $530,597Total Uses of Funds $29,038,840 Total Properties 11 Total Units 368
  10. 10. Sample Renovation Before & After Example(Typical kitchen with all Energy-Star rated appliances, solid wood cabinets)
  11. 11. Sample RenovationBefore & After Example(Typical ADA compliant bath)
  12. 12. Sample RenovationNew sinks ready to be installed
  13. 13. New HVAC systems New HVAC ductwork where none previously existed New water heater Replace poly piping
  14. 14. Sample RenovationBefore, During & After Example(Typical Roof and Siding Replacements)
  15. 15. Sample Renovation Before & After Example (Typical Exterior Upgrades)
  16. 16. Sample Renovation Before & After Example (Typical Exterior Upgrades)
  17. 17. Sample Renovation Before & After Example (Typical Exterior Updates)
  18. 18. Sample Renovation Before & After Example(Typical Section 504 Updates)
  19. 19. Sample Renovation Before & After Example(Typical Playground Upgrades)
  20. 20. Sample Renovation Before & After Example(Typical Playground Upgrades)
  21. 21. Sample Renovation Before & After Example(Typical Mail Facility Updates)
  22. 22. Sample Renovation Before & After Example(Replacement of Retaining Walls)
  23. 23. Words of Wisdom• Pick your team wisely• Communication, communication, communication• Build in hedges• Educate residents early• Flexibility, realistic timelines• Don’t just RED BULL – lots and lots of Red Bull!
  24. 24. Contact InformationFOR MORE INFORMATION, CONTACT Tanya Eastwood Managing Director Greystone Affordable Housing Initiatives, LLC 4025 Lake Boone Trail, Suite 209 Raleigh, NC 27607 (919) 573 -7502 teastwood@greystoneahi.com

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