Andy Haines S & A Homes November 14, 2016 Construction Costs - PowerPoint PPT Presentation

Andy Haines S & A Homes November 14, 2016

 Construction Costs and Trends  Development Perspective  Hard & Soft Costs  Operations  15 year  PHFA  Equity Challenges

 Hard- see my previous slide  Title Insurance over $50k per project  Insurance costs double non LIHTC deals  Consultant fees for Energy Audit  Tap Fees, Municipal Review Fees  More design, more time, longer construction periods

 Management face same challenges as other businesses, employees, health care  Maintenance of more intricate systems  Outside/Third Party maintenance  Shorter life term of systems  Tax Appeals  Tenants- 1/10 pass our litmus test  Energy Efficiency/utility costs

 “There is no way the US will elect an African American to the presidency”  “ There is no way the US will elect Donald Trump to the presidency”  “ I will not be as grumpy as my Dad”  “Someone else will be here in Year 15”  “There is no value in these deals at year 15”  “ the investor will be reasonable and just wants to get out of the deal”

 Investor view value in deals at year 15  Yorkshire Village Lesson  Valuation  Current rents v Max 60% Rents

 PHFA  Investors  Forward allocation  Pricing very aggressive  Staff turnover  Due Diligence aggressive  Carryover/ 8609’s  More knowledge of risks  Next year  Operating Reserves