Toolkit Rec ecovery Ho Housi using Dev evel elopm pmen ent T - - PowerPoint PPT Presentation

Toolkit

Community Capital Assistance Project

Rec ecovery Ho Housi using Dev evel elopm pmen ent T Toolkit – BUDGET T TOOL OL

• This Excel Spread sheet will

allow you to enter all of your accrued/expected development and operating expenses as well as calculate your debt service and track your sources of funding.

• Formulas will be set so that you

just enter your information in yellow cells and the calculations are done for you.

Recover ery H Housin ing D Dev evelo elopmen ent Toolkit it – BUD UDGET ET SOFT COSTS

Recovery Housing Development Budget

Project Name: Project Address: Number of Units/Beds:

50

Use of Funds

Total Per Unit Soft Costs Acquistion- Land (New Construction) $200,000 $4,000 Acquistion- Building (Renovation) $0 $0 Engineering $3,500 $70 Market Analysis $1,200 $24 Environmental Study- Phase I & II (if applicable) $3,000 $60 Survey (ALTA or Mortgage Location Survey) $3,500 $70 Physical Capital Needs Assessment (Renovation Only) $1,200 $24 Title and Recording $1,200 $24 Consulting Fees $5,000 $100 Real Estate Taxes/Impact Fees $1,500 $30 Additional Environmental (Soil Testing, Lead Testing, etc.) $0 $0 Additional civil engineering (if applicable) $0 $0 Architectural drawings & construction supervision $5,000 $100 Appraisal $500 $10 Legal Fees $2,200 $44 Lender Legal Fees $5,000 $100 Lender Loan Fees (Origination and Servicing) $3,000 $60 Construction Loan Interest $25,000 $500 Accounting $1,000 $20 Soft Cost Contingency $8,000 $160 2.30% Marketing Costs $3,000 $60 Other $0 $0 Other $0 $0 Other $0 $0 Other $0 $0 Development Fee $75,000 $1,500 5.47% Total Soft Costs $347,800 $6,956

ABC Development

Rec ecovery H Hou

• using D

Development Toolk

• olkit – BUDGE

GET HARD COSTS

Hard Cost - Construction Permits & Tap Fees $5,000 $100 Construction Insurance $300 $6 Bond (if required) $0 $0 Site Work $10,000 $200 Construction/Rehabilitation $1,000,000 $20,000 Appliances/Carpeting $4,000 $80 Building Permits / Tap Fees $2,000 $40 Contractor Fees - General Requirements $15,000 $300 1% Max - 6% Contractor Fees - Overhead $10,000 $200 1% Max - 2% Contractor Fees - Profit $15,000 $300 1% Max - 6% Contingency- Hard Cost $50,000 $1,000 4.93% 5% for New Construction / 10% for Rehabilitation Furniture, Fixtures & Equipment $3,000 $60 Other $400 $8 Total Hard Cost

$1,114,700 $22,294

Capitalized Reserves Operating Reserves $0 6 months-operating expenses (Min 4 months of 1st year operating expenses ) Total Reserves $0 $0 Total Development Budget $1,462,500

$29,250

Rec ecovery H Hou

• using D

Development Toolk

• olkit – BUDGE

GET SOURCES OF FUNDS

Sources of Funds

Total

Per Unit Construction Sources of Funds 1,406,250 Construction period costs Bank/Bridge Loan $500,000 1,000,000 Non-bank sources Foundation Funds/Donated $250,000 4.00% Construction Loan Interest Rate City/County HOME or other $250,000 24 Term of Construction financing County ADAMHS $0 OMHAS Capital $0 Max Award- $500,000 FHLBank AHP OHFA HDGF Other $500,000 Total Construction Sources of Funds $1,500,000 Permanent Sources of Funds Bank $500,000 5.00% Permanent Loan Interest Rate Foundation Funds/Donated $250,000 24 Term of Permanent financing City/County HOME or other $250,000 03/01/19 Loan Closing Date County ADAMHS $0 OMHAS Capital $500,000 FHLBank AHP $0 OHFA HDGF $0 Other $0 Deferred Developer Fee $0 Total Permanent Sources of Funds $1,500,000

Surplus/(Gap) $0

Rec ecovery H Hou

• using D

Development Toolk

• olkit – BUDGE

GET OPERATING BUDGET

Recovery Housing Operating Budget

ABC Development

Rents # of Bedrooms # of Units Gross Rent Utility Allowance Net Rent Annual Rent Restriction Occupancy Restriction 20 275 75 200 48000 1 30 335 90 245 88200 2 3 Total 50 $136,200 Operating Proforma REVENUE

Growth %

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Rent 1.02 136,200 138,924 141,702 144,537 147,427 150,376 153,383 156,451 159,580 162,772 166,027 169,348 172,735 176,189 179,713 Less Vacancy & Non Collection 7% 9,534 9,725 9,919 10,118 10,320 10,526 10,737 10,952 11,171 11,394 11,622 11,854 12,091 12,333 12,580 Operating Subsidy Gross Effective Rental Income 126,666 129,199 131,783 134,419 137,107 139,849 142,646 145,499 148,409 151,378 154,405 157,493 160,643 163,856 167,133 EXPENSES Per Unit Base Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 1.03 Management Fee (% Gross Rents) 8% 10,133 10,336 10,543 10,754 10,969 11,188 11,412 11,640 11,873 12,110 12,352 12,599 12,851 13,108 13,371 Utilities - Common Areas Utilities - Apartments 100 5000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 6,720 6,921 7,129 7,343 7,563 7,790 Water, Sewer, Storm Water 72 3600 3,708 3,819 3,934 4,052 4,173 4,299 4,428 4,560 4,697 4,838 4,983 5,133 5,287 5,445 5,609 Property Insurance 140 7000 7,210 7,426 7,649 7,879 8,115 8,358 8,609 8,867 9,133 9,407 9,690 9,980 10,280 10,588 10,906 Real Estate Taxes 160 8000 8,240 8,487 8,742 9,004 9,274 9,552 9,839 10,134 10,438 10,751 11,074 11,406 11,748 12,101 12,464 Maintenance 200 10000 10,300 10,609 10,927 11,255 11,593 11,941 12,299 12,668 13,048 13,439 13,842 14,258 14,685 15,126 15,580 Administrative 25 1250 1,288 1,326 1,366 1,407 1,449 1,493 1,537 1,583 1,631 1,680 1,730 1,782 1,836 1,891 1,947 Legal & Audit 40 2000 2,060 2,122 2,185 2,251 2,319 2,388 2,460 2,534 2,610 2,688 2,768 2,852 2,937 3,025 3,116 Property Marketing (1% GEI) Total Expenses 737 36,850 48,089 49,430 50,810 52,229 53,688 55,189 56,733 58,320 59,954 61,634 63,361 65,139 66,967 68,847 70,782 NET OPERATING INCOME 78,577 79,769 80,974 82,190 83,420 84,661 85,914 87,179 88,456 89,744 91,044 92,355 93,676 95,009 96,351

Rec ecovery H Hou

• using D

Development Toolk

• olkit – BUDGE

GET DEBT SERVICE

DEBT SERVICE 1st Mortgage - Permanent Financing Amount 500,000 Beginning Balance 500,000 495,134 480,294 464,711 448,349 431,169 413,130 394,190 374,302 353,419 331,493 308,470 284,296 258,914 232,262 Interest Rate 5.00% Principal 4,866 14,841 15,583 16,362 17,180 18,039 18,941 19,888 20,882 21,926 23,023 24,174 25,383 26,652 27,984 Amortization (Years) 20 Interest 8,333 24,757 24,015 23,236 22,417 21,558 20,657 19,709 18,715 17,671 16,575 15,424 14,215 12,946 11,613 Term in Years 20 Ending Balance 495,134 480,294 464,711 448,349 431,169 413,130 394,190 374,302 353,419 331,493 308,470 284,296 258,914 232,262 204,278 Annual Payment $39,597 Payment 13,199 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 Months in Service 1st year 4 Date of Loan Closing 03/01/19 1st Mortgage - Permanent Financing Amount Beginning Balance Interest Rate 0.00% Principal Amortization (Years) Interest Term in Years Ending Balance Annual Payment $0 Payment Months in Service 1st year 4 Date of Loan Closing 01/00/00 1st Mortgage - Permanent Financing Amount Beginning Balance Interest Rate 0.00% Principal Amortization (Years) Interest Term in Years Ending Balance Annual Payment $0 Payment Months in Service 1st year 4 Date of Loan Closing 01/00/00 TOTAL DEBT SERVICE 13,199 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 39,597 CASH FLOW 65378 40172 41376 42593 43822 45063 46317 47582 48858 50147 51446 52757 54079 55411 56754 Debt Service Coverage 1.56 1.58 1.59 1.61 1.63 1.64 1.66 1.67 1.69 1.71 1.72 1.74 1.75 1.76 Replacement Reserves Per Unit 17500 350 5,833 18,025 18,566 19,123 19,696 20,287 20,896 21,523 22,168 22,834 23,519 24,224 24,951 25,699 26,470

• Project Pre-Development
• Questions when identifying a property
• Questions when identifying an architect
• Questions when identifying a general contractor
• Soft Costs
• Hard Costs
• Operating Costs
• Green Elements
• Advanced Green Elements

Toolk

• olkit S

it Sect ectio ions

• Questions to consider when identifying a property
• New Construction
• NIMBY resistance?
• Utilities?
• Access?
• Existing Building
• Inspection
• Scope the sewers. NIMBY (Not In My Back Yard)

resistance?

PROEJ EJCT P PRE-DEVE VELOP OPMENT NT

• Describe how and why you believe you are the best

qualified firm for this project.

• How many projects of similar size and scope of you

completed?

• How many public works projects have you designed and

administered?

• How many registered architects do you have on staff?
• Do you have Errors & Omissions Insurance?
• Who will be the project manager? What is their

experience?

• How many hours will you be onsite during construction?
• References?

Ques estions w ns when s select cting ng a and a nd archi hitec ect

ARC RCHITEC ECT S SELEC ECTION

• How are you best qualified?
• What is their experience working with non-profit corporations?
• What is your bonding capacity?
• Liability insurance.
• What is your history of MBE/WBE participation?
• Will you entertain hiring qualified sub-contractors from our community?
• Prevailing wage.
• Who will be the project manager? Experience?
• References?

Ques esti tions w when selec ecting a a ge gener eral c contractor

CONT NTRACTOR OR S SELECTION ON

SOFT C COSTS

• Acquisition
• Demolition
• Project management
• Environmental review:

– New construction: Phase I environmental review is recommended. – Existing building: Inspection for asbestos, lead paint, etc.

• Soils testing
• Survey
• Civil Engineer
• Appraisal
• Legal fees
• Title search
• Market study/feasibility analysis
• Marketing/branding
• Office expense
• Architecture fees
• MEPs
• Rezoning
• Building permits
• Real estate taxes
• Utilities
• FF&E
• Owner insurance
• Builder’s Risk Insurance: $1.5 million
• Title Insurance
• Loan origination fee
• Lender legal
• Construction interest
• Lease-up reserve
• Contingency
• Development fee
• Construction vs. Permanent loan

• Site work
• Construction costs
• Contingency

HA HARD C D COSTS

OPERA RATI TING C COSTS

• Real estate taxes
• Utilities
• Lawn care/ landscaping
• Snow removal
• Regular janitorial costs
• Unit turn costs
• Pest removal
• Legal
• Marketing
• Property management
• Administrative
• Replacement reserve

GREEN B BUILDING NG S STAND NDARDS DS

Although not a requirement of ODMHAS funding green building practices will help reduce the following:

• Environmental Impact
• Health Issues
• Operating Expenses
• Water
• Gas
• Electric
• Taxes- possibly through local incentive programs

• Water conserving features
• Toilets: 1.28 gallons per flush
• Urinals: 0.5 gallons per flush
• Showerheads: 2.0 gallons per minute
• Kitchen faucets: 2.0 gallons per minute
• Bathroom faucets: 1.5 gallons per minute
• Appliances
• All appliances should be ENGERGYSTAR rated.
• This does not apply to small appliances like a toaster.
• HVAC
• Furnace should be at least 90% efficient.
• Size and select heating and cooling equipment in accordance with the Air Conditioning

Contractors of America (ACCA) Manuals J and S or ASHRAE handbooks.

• You may wish to include a cage for A/C condenser unit to deter theft.
• Lighting
• All fixtures must be ENERGYSTAR certified.
• Use compact florescent bulbs.

GR GREEN E ELEMENTS

• Insulation
• Water pipes: Heat loss can occur as hot water travels from the tank to the faucet.
• Exterior walls: Minimum of R-19 insulation. Traditional rolls or bats are fine but blown insulation

with recycled content is the gold star.

• Attic: Minimum of R-38 insulation. Traditional rolls or bats are fine but blown insulation with

recycled content is the gold star.

• Doors: ENERGYSTAR rated
• Windows: Install only windows that have NFRC ratings that meet or exceed the window

requirements for ENERGYSTAR rating.

• Flooring
• Use non-vinyl, non-carpet floor coverings throughout each building in the project.
• Use alternative flooring materials such as natural linoleum, ceramic tile, bamboo, cork or

hardwood.

• Walls
• No Volatile Organic Compounds (VOCs) in your paint, primer, sealant, caulk or other coatings.
• These products have become the norm at home improvement store, but make you convey this to

your general contractor.

• Landscaping
• Strategically placed trees can create shade and help lower your energy usage. Other landscaping

can slow or even prevent runoff, which minimizes the impact on the sewer system.

GR GREEN E ELEMENTS CONTINUED

• Tankless water heaters
• Solar thermal
• Photovoltaic

ADVANC NCED G GREEN ELEME MENT NTS

Programs to Consider:

• Enterprise Green Communities Standards

https://www.enterprisecommunity.org/solutions-and-innovation/green- communities/criteria

• LEED v4

https://new.usgbc.org/leed

• ICC 700 2012 National Green Building Standards

https://www.nahb.org/en/research/nahb-priorities/green- building- remodeling-and-development/icc-700-national-green-building- standard.aspx

ADVANC NCED G GREEN ELEME MENT NTS

If you should have questions or comments please contact:

Brian Higgins

Arch City Development BHiggins@archcitydevelopment.com @ArchCityCMH

614-563-3533