Presentation on theme: "Adding Value to New Orleans East"— Presentation transcript:
1Adding Value to New Orleans East Old Morrison HomesAdding Value to New Orleans East
2Old Morrison Homes Old Morrison Homes Overview Earning Equity Tax Credit OverviewBenefits of DevelopmentVOB Tax Credit ExperienceCommunity Partner Commitment
3Old Morrison Homes Overview 36 Single Family Homes21 3br ($800/mo) & 17 4br ($900/mo) Homes1675 Average Sq Ft$180,000 Cost/Home, ~$200k Average Retail ValueLease-Purchase Program (65% minimum of payments will go toward purchase of home after 15 years)Professional property management onsite, no absentee landlordAll tenants must meet strict criteria and be screened3,000 sf Community Center will be constructedDevelopers are responsible for all maintenance, taxes & property insurance over 15 year compliance period.
4Earning EquityAssume 2/3 (66%) of monthly payments will applied to the purchase price.Assume monthly payments total $150K over the 15 year leasing period and price of home is $200,000.Thus, in year 16 $100K (that is, 2/3 * $150K $100K) is applied to mortgage principal of $200K.Also after 15 years, only $100K remains to be owed on the home.After 15 years, at an average increase of 2.5% in the valuation of the home (i.e. increased equity), the $200K home would be worth $289,000K.Therefore, the resident with only $100,000 remaining on the mortgage principal would realize an equity in excess of $189K in year 16.(SEE TABLE)
5Earning Equity (EXAMPLE) YearValue of Home (Assumption of 2.5% increase in value)1$200,0002$208,000………15$264,00016$289,000In Year 16, resident owes ONLY $100,000 on home worth $289,000 Thus, resident earns $189,000 in equity in Year 16.
7Tax Credit Overview Purpose Process Income Requirements of Tenants Property Management GuidelinesOnsite ManagementResident Acceptance CriteriaCommunity Development Opportunity
8Resident Profile = Working Class OccupationAverage SalaryTeacher$31,000Police$35,500Paralegals$28,000Retiree$24,000Fireman$30,000Office Workers$25,000
9VOB Tax Credit Experience 6 Tax Credit developments completed and under management in MS and TN4 Tax Credit developments 90% complete in LA, MS and TN4 Tax Credit developments under construction4 Tax Credit developments in pre-development phase in LA and MS
10VOB Tax Credit Experience All existing properties are positive influences on neighborhoodsExample:Riverbend – uptown area of MemphisTax Credit program was a component of huge economic growthAs residents moved in, New Markets Tax Credits and other revitalization investments were made
11VOB Development properties Chattanooga, TNMemphis TNCanton, MSJackson, MSBaton Rouge, LA
12Benefits of Development New Development in N.O. EastIncreased population to benefit retail revitalizationLease-Purchase incentive program to spur home ownershipLease-Purchase is great alternative tool given current economic conditionsMaintain/Increased value of avg home in areaSpurring economic development/jobs in area
13Community Partner Commitment Tenant Selection & Screening ProcessOnsite Management – No Absentee LandlordHome Ownership Education ProgramHome Owners Association PartnershipVOB will continue reinvest in the New Orleans areaCore Old Morrison team is from N.O. East and is committed to its recovery
14Adding Value to New Orleans East Old Morrison HomesAdding Value to New Orleans East