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Old Morrison Homes Adding Value to New Orleans East.

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Presentation on theme: "Old Morrison Homes Adding Value to New Orleans East."— Presentation transcript:

1 Old Morrison Homes Adding Value to New Orleans East

2 Old Morrison Homes  Old Morrison Homes Overview  Earning Equity  Tax Credit Overview  Benefits of Development  VOB Tax Credit Experience  Community Partner Commitment

3 Old Morrison Homes Overview  36 Single Family Homes  21 3br ($800/mo) & 17 4br ($900/mo) Homes  1675 Average Sq Ft  $180,000 Cost/Home, ~$200k Average Retail Value  Lease-Purchase Program (65% minimum of payments will go toward purchase of home after 15 years)  Professional property management onsite, no absentee landlord  All tenants must meet strict criteria and be screened  3,000 sf Community Center will be constructed  Developers are responsible for all maintenance, taxes & property insurance over 15 year compliance period.

4 Earning Equity  Assume 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)

5 Earning Equity (EXAMPLE) YearValue of Home (Assumption of 2.5% increase in value) 1$200,000 2$208,000 ……… 15$264,000 16$289,000 In Year 16, resident owes ONLY $100,000 on home worth $289,000 Thus, resident earns $189,000 in equity in Year 16.

6 Old Morrison Homes Overview

7 Tax Credit Overview  Purpose  Process  Income Requirements of Tenants  Property Management Guidelines Onsite Management Resident Acceptance Criteria  Community Development Opportunity

8 Resident Profile = Working Class OccupationAverage Salary Teacher$31,000 Police$35,500 Paralegals$28,000 Retiree$24,000 Fireman$30,000 Office Workers$25,000

9 VOB Tax Credit Experience  6 Tax Credit developments completed and under management in MS and TN  4 Tax Credit developments 90% complete in LA, MS and TN  4 Tax Credit developments under construction  4 Tax Credit developments in pre- development phase in LA and MS

10 VOB Tax Credit Experience  All existing properties are positive influences on neighborhoods  Example: Riverbend – uptown area of Memphis Tax Credit program was a component of huge economic growth As residents moved in, New Markets Tax Credits and other revitalization investments were made

11 VOB Development properties Canton, MS Chattanooga, TNMemphis TN Jackson, MSBaton Rouge, LA

12 Benefits of Development  New Development in N.O. East  Increased population to benefit retail revitalization  Lease-Purchase incentive program to spur home ownership  Lease-Purchase is great alternative tool given current economic conditions  Maintain/Increased value of avg home in area  Spurring economic development/jobs in area

13 Community Partner Commitment  Tenant Selection & Screening Process  Onsite Management – No Absentee Landlord  Home Ownership Education Program  Home Owners Association Partnership  VOB will continue reinvest in the New Orleans area  Core Old Morrison team is from N.O. East and is committed to its recovery

14 Old Morrison Homes Adding Value to New Orleans East

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