old morrison homes adding value to new orleans east
TRANSCRIPT
Old Morrison Homes
Adding Value to New Orleans East
Old Morrison Homes Old Morrison Homes Overview Earning Equity Tax Credit Overview Benefits of Development VOB Tax Credit Experience Community Partner Commitment
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.
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)
Earning Equity (EXAMPLE)Year Value 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.
Old Morrison Homes Overview
Tax Credit Overview Purpose Process Income Requirements of Tenants Property Management Guidelines
Onsite Management Resident Acceptance Criteria
Community Development Opportunity
Resident Profile = Working ClassOccupation Average Salary
Teacher $31,000
Police $35,500
Paralegals $28,000
Retiree $24,000
Fireman $30,000
Office Workers $25,000
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
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
VOB Development properties
Canton, MS Chattanooga, TN Memphis TN
Jackson, MS Baton Rouge, LA
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
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
Old Morrison Homes
Adding Value to New Orleans East