A NonProfit Developers Perspective - PowerPoint PPT Presentation


Title: A NonProfit Developers Perspective


1
A Non-Profit Developers Perspective
  • Acquisition, Renovation and Resale in Baltimore
    Citys Middle Neighborhoods
  • David Sann, St. Ambrose Housing Aid Center, Inc.
    4/21/09

2
St. Ambrose Housing AidCenter, Inc.
  • Comprehensive housing services in Baltimore since
    1968
  • Mission to create and maintain housing
    opportunities for low moderate income people
    and support strong neighborhoods
  • Five silos of services
  • Quality rental housing
  • Home-sharing
  • Pre-purchase counseling
  • Foreclosure prevention counseling
  • Housing Development

3
Housing Development Program
  • Acquisition, rehab and resale of FHA
    Conventional foreclosures in targeted Baltimore
    City neighborhoods
  • Scattered-site nature of program works well in
    relatively stable neighborhoods.

Fully renovated house in Belair-Edison
4
Community Revitalization Model
  • Ideal for neighborhoods in the middle
  • Stagnated housing values
  • Lack of investment by residents
  • Potential buyers with choices looking elsewhere
  • Existing / emerging foreclosure problem
  • Development objectives include
  • Improve the housing stock with targeted
    acquisitions
  • Jump start the real estate market
  • Reduce instability caused by foreclosures
  • Inspire current residents to invest in their
    homes
  • The community is the client

5
HUD Asset Control Area (ACA) Program (2004
Present)
  • Acquisition, rehab and resale of FHA foreclosures
  • Discounted purchase
  • Quality renovations
  • Market sales
  • High impact in neighborhoods with many FHA
    foreclosures

6
ACA Program Success since October 2004
  • Acquired, renovated and sold 150 houses to
    qualified moderate income buyers
  • Helped to jump start stagnated real estate
    markets in the communities we serve
  • Helped create significant equity for current
    homeowners
  • Have been able to expand the ACA program to new
    Baltimore neighborhoods

7
Challenges in Current Market
  • Slow sales pace resulting in higher costs
  • Falling prices reducing margins
  • Apprehensive buyers
  • Lack of closing cost funds for buyers
  • Lack of market comps pushing prices down further
  • St. Ambroses market sales are cushioning the
    fall by maintaining market comps

8
Lesson Learned 1 It Doesnt Work Everywhere
  • Scattered-site acquisition, rehab, resale
    typically does not work in highly distressed
    neighborhoods
  • Not enough scale to overcome community challenges
  • Scattered-site projects can work in relatively
    stable neighborhoods
  • Serviceable, functional housing stock
  • A functioning real estate market
  • Not too many vacant houses

9
Lesson Learned 2 Develop a Production Model
  • Components of a production model include
  • Research capacity for smart planning and
    development decisions
  • Financing in-place (speed ease of use)
  • Construction management in-house
  • Quality general sub-contractors lined-up
  • Marketing and sales expertise in-house

10
Lesson Learned 3 Choose Your Neighborhoods
Carefully
  • Know your market niche and price points
  • A functioning real estate market is essential
  • Look for housing stock that can be affordably
    rehabbed
  • Brick townhouse (3-bedroom preferable)
  • 1940s 1950s construction has fewer structural
    issues
  • Modest, consistent, functional layouts
  • Contractor familiarity results in lower
    construction costs
  • Look for a community-based partner

11
Lesson Learned 4Have a Marketing Plan In-Place
  • Develop to your market and price points
  • Work with realtors in the community
  • Include sales commissions in your budget
  • Provide pre-purchase counseling services
  • Include closing cost help in your budget
  • Partner with community groups non-profits

12
The NSP ProgramApplying Lessons Learned
  • Neighborhoods that were chosen are the middle
    neighborhoods
  • Higher foreclosure rates
  • Low vacant housing rates
  • Functional real estate markets
  • Moderate housing prices
  • Community based marketing and mortgage lending
    capacity in-place

13
St. Ambrose and the NSP Program
  • St. Ambrose chosen to help implement the
    homeownership portion of the NSP Plan
  • St. Ambrose will be working in most of the
    neighborhoods designated by the City
  • Many of the neighborhoods overlap our existing
    program areas.

14
The Development Model Applied to the NSP Plan
  • Research and acquisition expertise
  • Extensive lines of credit from local lenders
  • Experienced general contractors ready
  • Experienced construction management
  • Sales and marketing expertise
  • In-house real estate brokerage to list our houses
  • Network of realtors (100) who know and
    appreciate St. Ambroses work
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A NonProfit Developers Perspective

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Title: A NonProfit Developers Perspective


1
A Non-Profit Developers Perspective
  • Acquisition, Renovation and Resale in Baltimore
    Citys Middle Neighborhoods
  • David Sann, St. Ambrose Housing Aid Center, Inc.
    4/21/09

2
St. Ambrose Housing AidCenter, Inc.
  • Comprehensive housing services in Baltimore since
    1968
  • Mission to create and maintain housing
    opportunities for low moderate income people
    and support strong neighborhoods
  • Five silos of services
  • Quality rental housing
  • Home-sharing
  • Pre-purchase counseling
  • Foreclosure prevention counseling
  • Housing Development

3
Housing Development Program
  • Acquisition, rehab and resale of FHA
    Conventional foreclosures in targeted Baltimore
    City neighborhoods
  • Scattered-site nature of program works well in
    relatively stable neighborhoods.

Fully renovated house in Belair-Edison
4
Community Revitalization Model
  • Ideal for neighborhoods in the middle
  • Stagnated housing values
  • Lack of investment by residents
  • Potential buyers with choices looking elsewhere
  • Existing / emerging foreclosure problem
  • Development objectives include
  • Improve the housing stock with targeted
    acquisitions
  • Jump start the real estate market
  • Reduce instability caused by foreclosures
  • Inspire current residents to invest in their
    homes
  • The community is the client

5
HUD Asset Control Area (ACA) Program (2004
Present)
  • Acquisition, rehab and resale of FHA foreclosures
  • Discounted purchase
  • Quality renovations
  • Market sales
  • High impact in neighborhoods with many FHA
    foreclosures

6
ACA Program Success since October 2004
  • Acquired, renovated and sold 150 houses to
    qualified moderate income buyers
  • Helped to jump start stagnated real estate
    markets in the communities we serve
  • Helped create significant equity for current
    homeowners
  • Have been able to expand the ACA program to new
    Baltimore neighborhoods

7
Challenges in Current Market
  • Slow sales pace resulting in higher costs
  • Falling prices reducing margins
  • Apprehensive buyers
  • Lack of closing cost funds for buyers
  • Lack of market comps pushing prices down further
  • St. Ambroses market sales are cushioning the
    fall by maintaining market comps

8
Lesson Learned 1 It Doesnt Work Everywhere
  • Scattered-site acquisition, rehab, resale
    typically does not work in highly distressed
    neighborhoods
  • Not enough scale to overcome community challenges
  • Scattered-site projects can work in relatively
    stable neighborhoods
  • Serviceable, functional housing stock
  • A functioning real estate market
  • Not too many vacant houses

9
Lesson Learned 2 Develop a Production Model
  • Components of a production model include
  • Research capacity for smart planning and
    development decisions
  • Financing in-place (speed ease of use)
  • Construction management in-house
  • Quality general sub-contractors lined-up
  • Marketing and sales expertise in-house

10
Lesson Learned 3 Choose Your Neighborhoods
Carefully
  • Know your market niche and price points
  • A functioning real estate market is essential
  • Look for housing stock that can be affordably
    rehabbed
  • Brick townhouse (3-bedroom preferable)
  • 1940s 1950s construction has fewer structural
    issues
  • Modest, consistent, functional layouts
  • Contractor familiarity results in lower
    construction costs
  • Look for a community-based partner

11
Lesson Learned 4Have a Marketing Plan In-Place
  • Develop to your market and price points
  • Work with realtors in the community
  • Include sales commissions in your budget
  • Provide pre-purchase counseling services
  • Include closing cost help in your budget
  • Partner with community groups non-profits

12
The NSP ProgramApplying Lessons Learned
  • Neighborhoods that were chosen are the middle
    neighborhoods
  • Higher foreclosure rates
  • Low vacant housing rates
  • Functional real estate markets
  • Moderate housing prices
  • Community based marketing and mortgage lending
    capacity in-place

13
St. Ambrose and the NSP Program
  • St. Ambrose chosen to help implement the
    homeownership portion of the NSP Plan
  • St. Ambrose will be working in most of the
    neighborhoods designated by the City
  • Many of the neighborhoods overlap our existing
    program areas.

14
The Development Model Applied to the NSP Plan
  • Research and acquisition expertise
  • Extensive lines of credit from local lenders
  • Experienced general contractors ready
  • Experienced construction management
  • Sales and marketing expertise
  • In-house real estate brokerage to list our houses
  • Network of realtors (100) who know and
    appreciate St. Ambroses work
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