Transcript Title Page - Vision West ND

Affordable Housing 101
Development Finance Basics
Western North Dakota Energy Project
Housing Solutions Webinar Series
December 9, 2014
1
What is “Affordable Housing”?
• No more than 30% of a household’s gross
income.
– Senior with $15,450 Social Security income
• $386 per month
– Preschool teacher earning $26,680 per year
• $667 per month
– Highway Patrol officer earning $46,250 per yr
• $1,156 per month
• Monthly rent of $2,500 requires $100,000 annual
household income
2
Factors Impacting Rent Levels
• Costs the same to develop whether rents
are affordable or market rate
• Special needs housing may cost more
• Rent revenue must be sufficient to cover
operating expenses, debt service, and
return on investment
• Direct relationship between development
costs and rent level
3
Options to Achieve Affordable
Rents
• Reduce development costs
• Reduce operating expenses
• Subsidize rents (vouchers)
• Subsidize development costs
4
Development Subsidy’s Impact on
Affordable Housing Development
• Low-cost development funding enables
rents to be affordable to more people
• Affordability is ensured for the long term
– Deed Restrictions limit incomes and rents
– Income and rent limits are adjusted annually
• One source may unlock the door to other
private, local, state and federal resources
5
24 Unit Apartment Building
$175,000 x 24 units = $4,200,000 Total Cost
Traditional Financing
•
•
Equity $1.26 million (30%)
Debt $2.94 million (70%)
$189,391 Debt Service (5%, 30 year)
$120,000 Operating Expense
$100,800 Return on Equity (8%)
$410,191 Needed Annual Revenue
= $1,424 Average Monthly
Rent per Unit
6
24 Unit Apartment Building
$175,000 x 24 units = $4,200,000 Total Cost
Traditional Financing
Development Subsidy
•
•
•
•
•
Equity $1.26 million (30%)
Debt $2.94 million (70%)
Equity $1.26 million (30%)
Soft Debt/Grant $1.26 mil. (30%)
Debt $1.68 million (40%)
$189,391 Debt Service (5%, 30 year)
$120,000 Operating Expense
$100,800 Return on Equity (8%)
$410,191 Needed Annual Revenue
$108,223 Debt Service (5%, 30 year)
$120,000 Operating Expense
$100,800 Return on Equity (8%)
$329,023 Needed Annual Revenue
= $1,424 Average Monthly
Rent per Unit
= $1,142 Average Monthly
Rent per Unit
7
24 Unit Apartment Building
Mixed Income Property
Rent Distribution Scenario
• 5 units @ $415
(30% AMI)
• 5 units @ $670
(50% AMI)
• 5 units @ $1,050 (80% AMI)
• 9 units @ $1,860
(“Market Rate”)
= $1,142 Average Unit Rent
8
Development Funding Resources
Grant Programs
– No repayment
– Provide equity into the project
– Tenant income and rent requirements
– Examples
•
•
•
•
Affordable Housing Program - FHLB
Community Development Block Grant
Private philanthropic foundations
Low Income Housing Tax Credits
– 9% “competitive” credits
– 4% credits with bond financing
9
Development Funding Resources
Soft Debt Programs
– Repayment is flexible
•
•
•
•
Deferred payments
Forgivable
Interest-only payments
Contingent payments based on cash flow
– Tenant income and rent requirements
– Examples
• Housing Incentive Fund
• HOME
• Neighborhood Stabilization Program
10
Development Funding Resources
Other Programs and Strategies
• Interest Buydown
– Flex PACE (BND and Local EDC/JDA)
– Rural Development Finance Corp. (NDAREC)
• Property Tax Reduction
– NDCC Section 57-02-08(43)
– Renaissance Zone
• Local concessions
– Land at Reduced Cost
– Permits, Fees and Utilities
11
12
24 Unit Senior Project
Costs
Operating Budget
Land Acquisition
$650,000
Tenant
New Construction
3,200,000
30% AMI
8
$450
$43,200
Fees and Permits
50,000
50% AMI
6
$750
54,000
Soft Costs
120,000
80% AMI
4
$1,100
52,800
Finance Costs
100,000
120%AMI
6
$1,450
104,400
Developer Fee
300,000
Gross Potential Rent
$254,400
80,000
Less Vacancy & Bad Debt
(17,808)
$4,500,000
Effective Gross Income
$236,592
Operating Reserve
Total Cost
# Units
Rent
Administrative Expense
Funding Sources
30,000
Operating and Maintenance
19,000
Property Taxes
35,000
7,200
Total Operating Expenses
($114,700)
Net Operating Income
$121,892
Debt Service (Principal & Interest)
Net Cash Flow
$0
$23,500
Utility Expense
Replacement Reserve ($300/unit)
Total Funding Sources
Annual
Debt Coverage Ratio
13
24 Unit Senior Project: Conventional Financing
Costs
Operating Budget
Land Acquisition
$650,000
Tenant
New Construction
3,200,000
30% AMI
8
$450
$43,200
Fees and Permits
50,000
50% AMI
6
$750
54,000
Soft Costs
120,000
80% AMI
4
$1,100
52,800
Finance Costs
100,000
120%AMI
6
$1,450
104,400
Developer Fee
300,000
Gross Potential Rent
$254,400
80,000
Less Vacancy & Bad Debt
(17,808)
$4,500,000
Effective Gross Income
$236,592
Operating Reserve
Total Cost
Owner Equity Investment
Rent
Administrative Expense
Funding Sources
Bank Debt (5% 15 years)
# Units
$4,000,000
500,000
$4,500,000
$23,500
Utility Expense
30,000
Operating and Maintenance
19,000
Property Taxes
35,000
Replacement Reserve ($300/unit)
Total Funding Sources
Annual
7,200
Total Operating Expenses
($114,700)
Net Operating Income
$121,892
Debt Service (Principal & Interest)
(379,581)
Net Cash Flow
($257,689)
Debt Coverage Ratio
0.32
14
24 Unit Senior Project: Land
Costs
Operating Budget
Land Acquisition
$650,000
Tenant
New Construction
3,200,000
30% AMI
8
$450
$43,200
Fees and Permits
50,000
50% AMI
6
$750
54,000
Soft Costs
120,000
80% AMI
4
$1,100
52,800
Finance Costs
100,000
120%AMI
6
$1,450
104,400
Developer Fee
300,000
Gross Potential Rent
$254,400
80,000
Less Vacancy & Bad Debt
(17,808)
$4,500,000
Effective Gross Income
$236,592
Operating Reserve
Total Cost
# Units
Rent
Administrative Expense
Funding Sources
$23,500
Utility Expense
30,000
500,000
Operating and Maintenance
19,000
450,000
Property Taxes
35,000
Bank Debt (5% 15 years)
$3,550,000
Owner Equity Investment
Discounted Land (City)
Replacement Reserve ($300/unit)
Total Funding Sources
Annual
$4,500,000
7,200
Total Operating Expenses
($114,700)
Net Operating Income
$121,892
Debt Service (Principal & Interest)
(336,878)
Net Cash Flow
($214,986)
Debt Coverage Ratio
0.36
15
24 Unit Senior Project: Fees & Permits
Costs
Operating Budget
Land Acquisition
$650,000
Tenant
New Construction
3,200,000
30% AMI
8
$450
$43,200
Fees and Permits
50,000
50% AMI
6
$750
54,000
Soft Costs
120,000
80% AMI
4
$1,100
52,800
Finance Costs
100,000
120%AMI
6
$1,450
104,400
Developer Fee
300,000
Gross Potential Rent
$254,400
80,000
Less Vacancy & Bad Debt
(17,808)
$4,500,000
Effective Gross Income
$236,592
Operating Reserve
Total Cost
Annual
$23,500
Utility Expense
30,000
500,000
Operating and Maintenance
19,000
450,000
Property Taxes
35,000
Bank Debt (5% 15 years)
$3,500,000
Owner Equity Investment
Discounted Land (City)
Total Funding Sources
Rent
Administrative Expense
Funding Sources
Waive Fees/Permits (City)
# Units
50,000
$4,500,000
Replacement Reserve ($300/unit)
7,200
Total Operating Expenses
($114,700)
Net Operating Income
$121,892
Debt Service (Principal & Interest)
(332,133)
Net Cash Flow
($210,241)
Debt Coverage Ratio
0.37
16
24 Unit Senior Project: Soft Debt
Costs
Operating Budget
Land Acquisition
$650,000
Tenant
New Construction
3,200,000
30% AMI
8
$450
$43,200
Fees and Permits
50,000
50% AMI
6
$750
54,000
Soft Costs
120,000
80% AMI
4
$1,100
52,800
Finance Costs
100,000
120%AMI
6
$1,450
104,400
Developer Fee
300,000
Gross Potential Rent
$254,400
80,000
Less Vacancy & Bad Debt
(17,808)
$4,500,000
Effective Gross Income
$236,592
Operating Reserve
Total Cost
$23,500
30,000
500,000
Operating and Maintenance
19,000
450,000
Property Taxes
35,000
$2,300,000
Owner Equity Investment
Discounted Land (City)
Total Funding Sources
Annual
Utility Expense
Bank Debt (5% 15 years)
Soft Debt (HIF, NSP)
Rent
Administrative Expense
Funding Sources
Waive Fees/Permits (City)
# Units
50,000
Replacement Reserve ($300/unit)
1,200,000
Total Operating Expenses
($114,700)
Net Operating Income
$121,892
Debt Service (Principal & Interest)
(218,259)
Net Cash Flow
($96,367)
Debt Coverage Ratio
0.56
$4,500,000
7,200
17
24 Unit Senior Project: Property Taxes
Costs
Operating Budget
Land Acquisition
$650,000
Tenant
New Construction
3,200,000
30% AMI
8
$450
$43,200
Fees and Permits
50,000
50% AMI
6
$750
54,000
Soft Costs
120,000
80% AMI
4
$1,100
52,800
Finance Costs
100,000
120%AMI
6
$1,450
104,400
Developer Fee
300,000
Gross Potential Rent
$254,400
80,000
Less Vacancy & Bad Debt
(17,808)
$4,500,000
Effective Gross Income
$236,592
Operating Reserve
Total Cost
$23,500
30,000
500,000
Operating and Maintenance
19,000
450,000
Property Taxes
10,400
$2,300,000
Owner Equity Investment
Discounted Land (City)
Total Funding Sources
Annual
Utility Expense
Bank Debt (5% 15 years)
Soft Debt (HIF, NSP)
Rent
Administrative Expense
Funding Sources
Waive Fees/Permits (City)
# Units
50,000
Replacement Reserve ($300/unit)
1,200,000
Total Operating Expenses
($90,100)
Net Operating Income
$146,492
Debt Service (Principal & Interest)
(218,259)
Net Cash Flow
($71,767)
Debt Coverage Ratio
0.67
$4,500,000
7,200
18
24 Unit Senior Project: Grants
Costs
Operating Budget
Land Acquisition
$650,000
Tenant
New Construction
3,200,000
30% AMI
8
$450
$43,200
Fees and Permits
50,000
50% AMI
6
$750
54,000
Soft Costs
120,000
80% AMI
4
$1,100
52,800
Finance Costs
100,000
120%AMI
6
$1,450
104,400
Developer Fee
300,000
Gross Potential Rent
$254,400
80,000
Less Vacancy & Bad Debt
(17,808)
$4,500,000
Effective Gross Income
$236,592
Operating Reserve
Total Cost
500,000
Operating and Maintenance
19,000
450,000
Property Taxes
10,400
Owner Equity Investment
Discounted Land (City)
Total Funding Sources
$23,500
30,000
$1,900,000
Grants (Found’n, CDBG)
Annual
Utility Expense
Bank Debt (5% 15 years)
Soft Debt (HIF, NSP)
Rent
Administrative Expense
Funding Sources
Waive Fees/Permits (City)
# Units
50,000
Replacement Reserve ($300/unit)
1,200,000
Total Operating Expenses
($90,100)
400,000
Net Operating Income
$146,492
Debt Service (Principal & Interest)
(180,300)
Net Cash Flow
($33,808)
Debt Coverage Ratio
0.81
$4,500,000
7,200
19
24 Unit Senior Project: FlexPACE
Costs
Operating Budget
Land Acquisition
$650,000
Tenant
New Construction
3,200,000
30% AMI
8
$450
$43,200
Fees and Permits
50,000
50% AMI
6
$750
54,000
Soft Costs
120,000
80% AMI
4
$1,100
52,800
Finance Costs
100,000
120%AMI
6
$1,450
104,400
Developer Fee
300,000
Gross Potential Rent
$254,400
80,000
Less Vacancy & Bad Debt
(17,808)
$4,500,000
Effective Gross Income
$236,592
Operating Reserve
Total Cost
Rent
Administrative Expense
Funding Sources
Bank Debt (Buydown to 1%)
# Units
$1,900,000
Annual
$23,500
Utility Expense
30,000
Owner Equity Investment
500,000
Operating and Maintenance
19,000
Discounted Land (City)
450,000
Property Taxes
10,400
Waive Fees/Permits (City)
Soft Debt (HIF, NSP)
Grants (Found’n, CDBG)
50,000
Replacement Reserve ($300/unit)
1,200,000
Total Operating Expenses
($90,100)
400,000
Net Operating Income
$146,492
Debt Service (Principal & Interest)
(136,457)
Net Cash Flow
$10,035
Debt Coverage Ratio
1.07
$175,000 Local FlexPACE Match (EDC/JDA)
Total Funding Sources
$4,500,000
7,200
20
24 Unit Senior Project: Final Pro Forma
Costs
Operating Budget
Land Acquisition
$650,000
Tenant
New Construction
3,200,000
30% AMI
8
$450
$43,200
Fees and Permits
50,000
50% AMI
6
$750
54,000
Soft Costs
120,000
80% AMI
4
$1,100
52,800
Finance Costs
100,000
120%AMI
6
$1,450
104,400
Developer Fee
300,000
Gross Potential Rent
$254,400
80,000
Less Vacancy & Bad Debt
(17,808)
$4,500,000
Effective Gross Income
$236,592
Operating Reserve
Total Cost
Rent
Administrative Expense
Funding Sources
Bank Debt (Buydown to 1%)
# Units
$1,700,000
Annual
$23,500
Utility Expense
30,000
Owner Equity Investment
500,000
Operating and Maintenance
19,000
Discounted Land (City)
450,000
Property Taxes
10,400
Waive Fees/Permits (City)
Soft Debt (HIF, NSP)
Grants (Found’n, CDBG)
50,000
Replacement Reserve ($300/unit)
1,200,000
Total Operating Expenses
($90,100)
400,000
Net Operating Income
$146,492
Debt Service (Principal & Interest)
(122,093)
200,000
Net Cash Flow
$24,399
$4,500,000
Debt Coverage Ratio
1.20
$175,000 Local FlexPACE Match (EDC/JDA)
Deferred Developer Fee
Total Funding Sources
7,200
21
• The NDSBDC can work with you to help
put the finance package together utilizing
this program and flex pace plus your local
programs.
• We have proforma spred sheets that will
calculate all ratios needed for
22
•
•
•
•
•
Bank
NDHFA
Appraiser
Developer
All will be have slightly different views of
rates of return, debt coverage needs and
ways to maximize what is important to the
project lead
23
operational expense
2013
$0.00
$17,424.00
$10,056.00
$0.00
$64,344.00
$89,808.00
$181,632.00
$12,714.24
$168,917.76
$1,440.00
$8,640.00
$720.00
$1,200.00
$288.00
$5,040.00
$1,440.00
$5,760.00
$8,640.00
$0.00
$5,040.00
$5,760.00
$3,600.00
$47,568.00
2014
$0.00
$17,772.48
$10,257.12
$0.00
$65,630.88
$91,604.16
$185,264.64
$12,968.52
$172,296.12
$1,483.20
$8,899.20
$741.60
$1,236.00
$296.64
$5,191.20
$1,483.20
$5,932.80
$8,899.20
$0.00
$5,191.20
$5,932.80
$3,708.00
$48,995.04
2015
2016
2017
2018
2019
2020
2021
2022
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$18,127.93 $18,490.49 $18,860.30 $19,237.50 $19,622.25 $20,014.70 $20,414.99 $20,823.29
$10,462.26 $10,671.51 $10,884.94 $11,102.64 $11,324.69 $11,551.18 $11,782.21 $12,017.85
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$66,943.50 $68,282.37 $69,648.01 $71,040.98 $72,461.79 $73,911.03 $75,389.25 $76,897.04
$93,436.24 $95,304.97 $97,211.07 $99,155.29 $101,138.39 $103,161.16 $105,224.39 $107,328.87
$188,969.93 $192,749.33 $196,604.32 $200,536.40 $204,547.13 $208,638.08 $212,810.84 $217,067.05
$13,227.90 $13,492.45 $13,762.30 $14,037.55 $14,318.30 $14,604.67 $14,896.76 $15,194.69
$175,742.04 $179,256.88 $182,842.02 $186,498.86 $190,228.83 $194,033.41 $197,914.08 $201,872.36
$1,527.70
$1,573.53 $1,620.73 $1,669.35 $1,719.44 $1,771.02 $1,824.15 $1,878.87
$9,166.18
$9,441.16 $9,724.40 $10,016.13 $10,316.61 $10,626.11 $10,944.89 $11,273.24
$763.85
$786.76
$810.37
$834.68
$859.72
$885.51
$912.07
$939.44
$1,273.08
$1,311.27 $1,350.61 $1,391.13 $1,432.86 $1,475.85 $1,520.12 $1,565.73
$305.54
$314.71
$324.15
$333.87
$343.89
$354.20
$364.83
$375.77
$5,346.94
$5,507.34 $5,672.56 $5,842.74 $6,018.02 $6,198.56 $6,384.52 $6,576.06
$1,527.70
$1,573.53 $1,620.73 $1,669.35 $1,719.44 $1,771.02 $1,824.15 $1,878.87
$6,110.78
$6,294.11 $6,482.93 $6,677.42 $6,877.74 $7,084.07 $7,296.60 $7,515.49
$9,166.18
$9,441.16 $9,724.40 $10,016.13 $10,316.61 $10,626.11 $10,944.89 $11,273.24
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$5,346.94
$5,507.34 $5,672.56 $5,842.74 $6,018.02 $6,198.56 $6,384.52 $6,576.06
$6,110.78
$6,294.11 $6,482.93 $6,677.42 $6,877.74 $7,084.07 $7,296.60 $7,515.49
$3,819.24
$3,933.82 $4,051.83 $4,173.39 $4,298.59 $4,427.55 $4,560.37 $4,697.18
$50,464.89 $51,978.84 $53,538.20 $55,144.35 $56,798.68 $58,502.64 $60,257.72 $62,065.45
debt service principal and interest
$117,088.00
$120,352.00
$120,352.00 $120,352.00 $120,352.00 $120,352.00 $120,352.00 $120,352.00 $120,352.00 $120,352.00 $120,352.00 $120,352.00 $120,352.00 $120,352.00 $120,352.00
$4,261.76
-$3,238.24
$7,500.00
$2,949.08
-$4,700.92
$7,650.00
Income
one bedroom 80 of hud
two bedroom 80 of hud
Three bedroom 80 of hud
one bedroom 140% and unrestricted
two bedroom and unrestricted
three bedroom and unrestricted
Gross income
vacancy rate
total income
Supplies
Maintenance
Ad/Promotion
audit
Telephone
utilities for low income
utilities for common areas
Insurance
water sewer garbage
Real Estate Taxes
management fee
grounds snow lawn
reserves
net income-vacancy rate
Second Net Income
return to investors at 10
24
$4,925.15
-$2,877.85
$7,803.00
$6,926.04
-$1,033.02
$7,959.06
2023
$0.00
$21,239.76
$12,258.21
$0.00
$78,434.98
$109,475.45
$221,408.39
$15,498.59
$205,909.81
$1,935.24
$11,611.44
$967.62
$1,612.70
$387.05
$6,773.34
$1,935.24
$7,740.96
$11,611.44
$0.00
$6,773.34
$7,740.96
$4,838.10
$63,927.41
2024
2025
2024
2025
$0.00
$0.00
$0.00
$0.00
$21,664.55 $22,097.85 $22,539.80 $22,990.60
$12,503.37 $12,753.44 $13,008.51 $13,268.68
$0.00
$0.00
$0.00
$0.00
$80,003.68 $81,603.75 $83,235.83 $84,900.54
$111,664.96 $113,898.26 $116,176.22 $118,499.75
$225,836.56 $230,353.29 $234,960.36 $239,659.57
$15,808.56 $16,124.73 $16,447.23 $16,776.17
$210,028.00 $214,228.56 $218,513.13 $222,883.40
$1,993.30 $2,053.10
$2,114.69
$2,178.13
$11,959.78 $12,318.57 $12,688.13 $13,068.78
$996.65 $1,026.55
$1,057.34
$1,089.06
$1,661.08 $1,710.91
$1,762.24
$1,815.11
$398.66
$410.62
$422.94
$435.63
$6,976.54 $7,185.83
$7,401.41
$7,623.45
$1,993.30 $2,053.10
$2,114.69
$2,178.13
$7,973.19 $8,212.38
$8,458.75
$8,712.52
$11,959.78 $12,318.57 $12,688.13 $13,068.78
$0.00
$0.00
$0.00
$0.00
$6,976.54 $7,185.83
$7,401.41
$7,623.45
$7,973.19 $8,212.38
$8,458.75
$8,712.52
$4,983.24 $5,132.74
$5,286.72
$5,445.32
$65,845.24 $67,820.59 $69,855.21 $71,950.87
$8,951.81 $11,002.51 $13,078.15 $15,178.77 $17,304.36 $19,454.91 $21,630.39 $23,830.77 $26,055.97
$833.57 $2,721.90 $4,631.94 $6,563.63 $8,516.91 $10,491.71 $12,487.93 $14,505.46 $16,544.16
$8,118.24 $8,280.61 $8,446.22 $8,615.14 $8,787.45 $8,963.19 $9,142.46 $9,325.31 $9,511.81
$28,305.92
$18,603.87
$9,702.05
$30,580.53
$20,684.44
$9,896.09
12
rent
one bed room
two bedroom
three bed room
0
2
1
total
605
726
838
0
1452
838
2290
3
1.4
0
1
2
900
1162
1342
0
0
3
investors
150000
0.05
7500
$625.00
unit
Supplies
Maintenance
Ad/Promotion
Acct & Legal
Telephone
heat
common utilities
Insurance
manange,emt fee
Real Estate Taxes
grounds snow and lawn
water sewer garbage
reserve account
number of units monthly
10
60
5
5
2
70
10
40
35
70
40
60
25
12
12
12
12
12
6
12
12
12
0
12
12
12
25
$120.00
$720.00
$60.00
$60.00
$24.00
$420.00
$120.00
$480.00
$420.00
$0.00
$480.00
$720.00
$300.00
Yearly
$1,440.00
$8,640.00
$720.00
$720.00
$288.00
$5,040.00
$1,440.00
$5,760.00
$5,040.00
$0.00
$5,760.00
$8,640.00
$3,600.00
0
1162
2684
3846
0
unrestricted
0
3
3
6
total rent
900
1400
1600
0
4200
4800
9000
$15,136.00
Client Name:
FINANCIAL STATEMENT:
Client Nam e
Pro Form a Incom e Statem ent
The North Dakota Sm all Business Developm ent Center has prepared these
financial projections from inform ation com m unicated by the Client.
Date Prepared
Date
We are not licensed by the state of North Dakota to practice Public Accounting
and can therefore give no opinion or assurance on the statem ents.
Year 1
REVENUE
COST OF GOODS SOLD
GROSS PROFIT
EXPENSES:
Bad Debts
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
TOTALS
$181,632
100.0%
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$181,632
100.0%
#
Ow ner's Salary
Ow ner Payroll Taxes
Jan-14
$15,136
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
15.30%
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
0.00%
#
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
Outside Services
#
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
Supplies
#
$140
$140
$120
$140
$140
$140
$140
$140
$140
$140
$140
$140
$1,660
0.9%
Maintenance
#
$600
$600
$600
$600
$600
$600
$600
$600
$600
$600
$600
$600
$7,200
4.0%
Ad/Promotion
#
$70
$70
$120
$70
$70
$70
$70
$70
$70
$70
$70
$70
$890
0.5%
Of f ice Expense
#
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
common utilities
#
$140
$140
$140
$140
$140
$140
$140
$140
$140
$140
$140
$140
$1,680
0.9%
Acct & Legal
#
$70
$70
$70
$70
$70
$70
$70
$70
$70
$70
$70
$70
$840
0.5%
management
#
$720
$720
$720
$720
$720
$720
$720
$720
$720
$720
$720
$720
$8,640
4.8%
Telephone
#
$50
$50
$48
$50
$50
$50
$50
$50
$50
$50
$50
$50
$598
0.3%
w ater sew er garbage
#
$800
$800
$800
$800
$800
$800
$800
$800
$800
$800
$800
$800
$9,600
5.3%
Insurance
#
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$6,000
3.3%
return to investors
#
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
Real Estate Taxes
#
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
low income utilities
#
$490
$490
$490
$490
$490
$490
$490
$490
$490
$490
$490
$490
$5,880
3.2%
grounds snow and grass
#
$560
$560
$560
$560
$560
$560
$560
$560
$560
$560
$560
$560
$6,720
3.7%
reserves
#
$350
$350
$350
$350
$350
$350
$350
$350
$350
$350
$350
$350
$4,200
2.3%
Int - Loan 1
$1,358
$1,351
$1,344
$1,337
$1,330
$1,323
$1,316
$1,309
$1,302
$1,295
$1,288
$1,281
$15,837
8.7%
Int - Loan 2
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
Int - Loan 3
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
Depreciation
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
Amortization
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
$5,848
$5,841
$5,862
$5,827
$5,820
$5,813
$5,806
$5,799
$5,792
$5,785
$5,778
$5,771
$69,745
38.4%
$9,288
$9,295
$9,274
$9,309
$9,316
$9,323
$9,330
$9,337
$9,344
$9,351
$9,358
$9,365
$111,887
61.6%
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.0%
$9,288
$9,295
$9,274
$9,309
$9,316
$9,323
$9,330
$9,337
$9,344
$9,351
$9,358
$9,365
$111,887
61.6%
$1,452
$1,452
$1,452
$1,452
$1,452
$1,452
$1,452
$1,452
$1,452
$1,452
$1,452
Int-Line of Credit
0.00%
TOTAL EXPENSES
NET PROFIT BEFORE TAX
INCOME TAX
0.0%
NET INCOME
PROFIT CENTERS
p1 tw o bed low
$1,452
$17,424
10%
p2 three bed low
$838
$838
$838
$838
$838
$838
$838
$838
$838
$838
$838
$838
$10,056
6%
p3 tw o bed mod
$1,162
$1,162
$1,162
$1,162
$1,162
$1,162
$1,162
$1,162
$1,162
$1,162
$1,162
$1,162
$13,944
8%
p4 three bed mod
$2,684
$2,684
$2,684
$2,684
$2,684
$2,684
$2,684
$2,684
$2,684
$2,684
$2,684
$2,684
$32,208
18%
p5 tw o bed open
$4,200
p6 three bed open
TOTAL
COGS
TOTAL
26
$4,200
$4,200
$4,200
$4,200
$4,200
$4,200
$4,200
$4,200
$4,200
$4,200
$4,200
$50,400
28%
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$57,600
32%
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$181,632
100%
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Client Name:
FINANCIAL STATEMENT:
Date Prepared
BUDGET MONTH
CASH INFLOW
Cash Sales
Collection f rom Credit
Client Nam e
Pro Form a Cash Flow
Date
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
$15,136
$0
$15,136
$0
$15,136
$0
$15,136
$0
$15,136
$0
$15,136
$0
$15,136
$0
$15,136
$0
$15,136
$0
$15,136
$0
$15,136
$0
$15,136
$0
$181,632
$0
Draw /(Repay) LOC
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Notes Injected / (Repaid)
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Loan Injection (Net of Fees)
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Equity Injection
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$15,136
$181,632
TOTAL CASH RECEIVED
Year 1
The North Dakota Sm all Business Developm ent Center has prepared these
financial projections from inform ation com m unicated by the Client.
We are not licensed by the state of North Dakota to practice Public Accounting
and can therefore give no opinion or assurance on the statem ents.
TOTAL
CASH PAID OUT
Outside Services
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Supplies
$140
$140
$120
$140
$140
$140
$140
$140
$140
$140
$140
$140
$1,660
Maintenance
$600
$600
$600
$600
$600
$600
$600
$600
$600
$600
$600
$600
$7,200
$890
Ad/Promotion
$70
$70
$120
$70
$70
$70
$70
$70
$70
$70
$70
$70
Of f ice Expense
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
common utilities
$140
$140
$140
$140
$140
$140
$140
$140
$140
$140
$140
$140
$1,680
Acct & Legal
$70
$70
$70
$70
$70
$70
$70
$70
$70
$70
$70
$70
$840
management
$720
$720
$720
$720
$720
$720
$720
$720
$720
$720
$720
$720
$8,640
Telephone
$50
$50
$48
$50
$50
$50
$50
$50
$50
$50
$50
$50
$598
w ater sew er garbage
$800
$800
$800
$800
$800
$800
$800
$800
$800
$800
$800
$800
$9,600
Insurance
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$6,000
return to investors
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Real Estate Taxes
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
low income utilities
$490
$490
$490
$490
$490
$490
$490
$490
$490
$490
$490
$490
$5,880
grounds snow and grass
$560
$560
$560
$560
$560
$560
$560
$560
$560
$560
$560
$560
$6,720
reserves
$350
$350
$350
$350
$350
$350
$350
$350
$350
$350
$350
$350
$4,200
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Int - Loan 1
$1,358
$1,351
$1,344
$1,337
$1,330
$1,323
$1,316
$1,309
$1,302
$1,295
$1,288
$1,281
$15,837
Int - Loan 2
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Depreciation
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Amortization
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Subtotal
$5,848
$5,841
$5,862
$5,827
$5,820
$5,813
$5,806
$5,799
$5,792
$5,785
$5,778
$5,771
$69,745
Princ. Pmt - Loan 1
$8,397
$8,404
$8,411
$8,418
$8,425
$8,432
$8,439
$8,446
$8,453
$8,460
$8,467
$8,474
$101,229
Princ. Pmt - Loan 2
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Capital Purchases
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Income Taxes
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Ow ner's Withdraw al
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$14,245
$14,245
$14,273
$14,245
$14,245
$14,245
$14,245
$14,245
$14,245
$14,245
$14,245
$14,245
$170,974
CHANGE IN CASH
$891
$891
$863
$891
$891
$891
$891
$891
$891
$891
$891
$891
$10,658
Beginning Balance
$0
$891
$1,781
$2,644
$3,534
$4,425
$5,315
$6,206
$7,096
$7,987
$8,877
$9,768
$891
$1,781
$2,644
$3,534
$4,425
$5,315
$6,206
$7,096
$7,987
$8,877
$9,768
$10,658
Other
TOTAL CASH PAID
Ending Balance
27
Debt Coverage Ratio Analysis
Net Profit Before Taxes
Projected Year 1
$111,887
+ Depreciation
$0
+ Amortization
$0
+ Interest
$15,837
- Increase in Permanent Working Capital
$0
- New Capital Expenditures (Net of New Loans Injected)
$0
= Total Cash Flow Available for D/S
$127,724
/ Total Debt Service
$117,066
= Debt Coverage Ratio
28
1.09
• We can run several different scenarios so
you can fine tune the rent to best possible
level for your project and your community
and make sure it fits what you are trying to
accomplish.
29
Questions?
North Dakota Housing Finance Agency
www.ndhfa.org
Bill Hourigan
Housing Outreach Officer
701/328-8080 or 800/292-8621
[email protected]
Keith Olson
SBDC Director
Williston State College SBDC 1-701-570-4260
[email protected]
30