MI Casa, Inc.MI Casa, Inc.

Affordable Housing Affordable Housing Development ConsultingDevelopment Consulting

Fernando LemosFernando Lemos Executive Director Executive Director

Tenant Purchase ProjectTenant Purchase Project

TOPA law and Ownership Structure.TOPA law and Ownership Structure.

Ownership: what does each resident own?Ownership: what does each resident own?

OWNERSHIPOWNERSHIP

RENTALRENTAL COOPERATIVECOOPERATIVE CONDOMINIUMCONDOMINIUM

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 ProjectTenant Purchase ProjectPhasesPhases::

1.1. Meet the tenants and their building.Meet the tenants and their building. Tenant Profile Tenant Profile Building EvaluationBuilding Evaluation

2.2. Feasibility Analysis.Feasibility Analysis.

3.3. Create a Development PlanCreate a Development Plan Timeline Timeline Financial Pro formaFinancial Pro forma Tenant TrainingsTenant Trainings Acquire the propertyAcquire the property Hire an Architect for ConstructionHire an Architect for Construction Hire a contractor.Hire a contractor. Start and Finish ConstructionStart and Finish Construction

Tenant Purchase ProjectTenant Purchase Project Tenant Profile.Tenant Profile.

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 interviewedThe 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 DataThe 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.

Occupations

Services47%

Skilled Trades38%

Administrative5%

Professional5%

Retired5%

Age Groups

Persons 62+, 4%

Persons 50-61, 13%

Persons 40-49, 16%

Persons 30-39, 27%

Persons 18-29, 27%

Persons <18, 13%

Tenant Purchase ProjectTenant Purchase Project Building Evaluation.Building Evaluation.

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 ProjectTenant Purchase Project Feasibility AnalysisFeasibility Analysis

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 ProjectTenant Purchase Project Development Plan - Timeline.Development Plan - Timeline.

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 ProjectTenant Purchase Project Development Plan – Financial Pro-forma.Development Plan – Financial Pro-forma.

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 ProjectTenant Purchase Project

Board Development rolesBoard Development roles We own the building!We own the building! Select a management companySelect a management company Select an ArchitectSelect an Architect Managing training for coopsManaging training for coops

Development Plan – Tenant TrainingsDevelopment Plan – Tenant Trainings..

1. Managing the Association

2. Preside membership meetings

3. Sign documents4. Approve circulars and

correspondence

1. Administrar la Asociacion

2. Presidir las reuniones generales

3. Firmar documentos4. Aprobar circulares yc

orrespondencia

President: roles and responsibilitiesPresident: roles and responsibilities Presidente: funciones y responsabilidadesPresidente: funciones y responsabilidades

Tenant Tenant Purchase Purchase ProjectProject

Development Plan Architect

Contractor Construction