November 2009 Welcome to CAHEC’s 2011 Partner’s Conference: Surviving our Changing Tax Credit Environment Property Manager’s Workshop June 8, 2011

Overcoming the Challenges of Compliance (Part I) Erik Whitton, Spectrum Enterprises June 8, 2011

2011 CAHEC Conference June 8, 2011 Advanced Tenant Certification Erik Whitton – Spectrum Enterprises, Inc.

“Advanced Tenant Certification” Tax Credit Compliance “Beyond the basics; an examination of complex non- compliance issues discovered in tenant files. How to look at a file from an auditor’s perspective and gain insight on the types of indicators that raise flags during a file review.”

“Advanced Tenant Certification” We will examine actual tenant files and discuss issues such as: Inconsistent information within a file Incorrect math Applicants failing to disclose all income/assets Being aware of federal laws impacting compliance Due diligence requirement Applicants adding minors to the household in order to qualify First recerts showing income increases Etc.

“Advanced Tenant Certification” Over the past year our staff has been setting aside files that contain more advanced issues of non-compliance which could lead to a credit loss. Files used in this presentation are meant to illustrate the concepts being discussed. In all cases we cautioned our clients that the household could jeopardize the tax credit. In most cases we work with investors reviewing first year qualifying tenant files for new deals. These files are extremely important as the initial qualified basis triggers the flow of tax credits into the deal. Mistakes made with first year files can be very damaging to the overall tax credit funding for the project.

“Advanced Tenant Certification – ARTHUR FILE” Be aware of file inconsistencies. Check and double check all information. Sometimes 3 rd party verifications can contain errors! Arthur File: TIC listed $20, Applicable income limit was $21,960 A checking account verification from the bank stated the average 6 month balance as $814.88

“Advanced Tenant Certification – ARTHUR FILE” However, the file also contains bank statements (required by the management company) as supporting documentation. These list the following balances: OCT - $1, NOV - $131, DEC - $128, JAN - $128, FEB - $127, MAR – missing The actual 5 month average checking account balance computes to $103, The imputed asset income would be an additional $2, This would place the HH over the income limit There’s no way the 6 month average balance could be $ It’s mathematically impossible.

“Advanced Tenant Certification – ROSANNA FILE” Spectrum has a policy which we strongly encourage all clients to adopt. Where an applicant has provided inaccurate information during the screening process we do not issue an approval for them to move into an affordable unit. NO EXCEPTIONS ARE MADE! If you can find false/inaccurate information about one aspect of eligibility how can you trust any of the other information provided? ROSANNA FILE On 4 different documents in the file the HOH certified zero assets. Our auditor noted that a pay stub showed a direct deposit. Upon further questioning the applicant revealed over $53,000 in assets. Suggest adding to your tenant selection criteria that providing false or inaccurate information will result in an immediate rejection of the application.

“Advanced Tenant Certification – JASMIN FILE” When a household is very close to the income limit additional steps are needed to meet the due diligence requirement This is especially true with first year qualifying households at new LIHTC properties Jasmin File: Tenant has 2 jobs. The PT job is not in question. Income is $3, For the FT job EV listed a current weekly salary; no raise expected. $ x 52 = $32, Letter from employer echoes the salary but also mentions a $500 year end bonus. Manager did not include this on the TIC. $32, $500 = $32,930.32

“Advanced Tenant Certification – JASMIN FILE” Plus PT job and small amount of asset income = $36, Income limit is $36,840 Less than $300 from the income limit. This property is required to submit pay stubs in addition to the EV. Our auditor noticed that the salary went from $ to $ The increase was shown on the first 2010 pay stub (January 4). This could be an annual scheduled raise. We asked the manager to follow up with the employer to obtain a history of pay raises (tenant had the same job for 4 years). If the follow up came back showing sporadic raises we would have accepted the file.

“Advanced Tenant Certification – JASMIN FILE” However, the follow up showed a raise every year in January. Therefore we feel the TIC should reflect a raise (anticipated income for the 12 months following move in). This was an April 1 move in. We counted 39 weeks at the current rate and 13 weeks with an additional $28/week. The additional $364 places the HH over the income limit.

“Advanced Tenant Certification – JENNY FILE” Be aware of file inconsistencies. Check and double check all information. Jenny File: TIC listed $27,144; Applicable income limit was $27,420 Since the household was close to the income limit (less than $300) and there was a question regarding OT, we asked the manager to submit pay stubs. Both the EV and phone verification list $24, as the amount of YTD pay Our staff compared this to the pay stub which listed $26, Note that the YTD amounts are only off by one digit How is this possible? A simple mistake or something more sinister? Using the pay stub YTD placed the HH over the limit 26, divided by 49 weeks = $27,707.75

“Advanced Tenant Certification – DWIGHT FILE” When reviewing 1 st year recertification files we always look for income increases, changes in jobs, etc. All recertification files with a change in income, household composition, etc. must include very detailed explanation. Include the nature and timeframe of the change. Ask whether the change should have been known at time of initial move in. Dwight File. Moved in 06/04/2009 Household Income = $26, Income Limit = $27, June 4, 2010 Recertification Income = $29, $2,000+ over the income limit.

“Advanced Tenant Certification – DWIGHT FILE” Our staff began to examine the nature of this income increase. At move in the tenant worked at Heavey’s earning $9.15 per hour. EV is dated 05/02/2009. Recert shows a job at Neill Corp which started on 06/08/2009 paying $12.24 per hour. At time of move in (06/04/2009) the tenant would have known he was starting a new job in 4 days.

“Advanced Tenant Certification – DWIGHT FILE” We asked the manager to obtain & provide additional explanation including When did he apply for the job? When did he interview? Sometimes the follow-up provided by the manager does not help put the issue to rest The original (Heavy’s) job was verified to have terminated on 02/23/2009.

“Advanced Tenant Certification – MICHIO FILE” Another 1 st recert that went over income. This particular property has a pattern of first recerts where people went over the limit. Examining the recert file our team found an EV form for a job that listed a hire date preceding the date of move in, yet the job was not disclosed when the HH was processed for move in a year ago. Very clear that the tenant did not reveal all income at time of move in. In this scenario you should not renew the lease or complete the recertification. Household should be evicted and replaced by a qualified tenant. IRS 8823 audit guide says that an owner should not lose credits for tenant fraud. However, due diligence requirement must be met. No loose ends.

Overcoming the Challenges of Compliance (Part II) Erik Whitton, Spectrum Enterprises June 8, 2011

2011 CAHEC Conference June 8, 2011 HUD Income Definitions Erik Whitton – Spectrum Enterprises, Inc.

“HUD Income Definition” An applicant applies for an apartment. His EV form says he is paid $12/hour and works hours per week. There is no other pay from overtime, shift, commission, bonus, tips, or raise. The correct way to factor the job is: a)$12 x 35 x52 = 21,840 b)$12 x 40 x52 = 24,960 c)$12 x 37.5 x52 = 23,400 d)$12 x 40 x 4 x 12 = 23,040

“HUD Income Definition” a)$12 x 35 x52 = 21,840 b)$12 x 40 x52 = 24,960 c)$12 x 37.5 x52 = 23,400 d)$12 x 40 x 4 x 12 = 23,040 Always use the highest amount when a range is given. Best Practices: Call employer for further clarification Especially if eligibility is on the line

“HUD Income Definition” An applicant applies for an apartment. His EV form says he is paid a weekly salary of $480. There is no other pay from overtime, shift, commission, bonus, tips, or raise. The correct way to factor the job is: a)$480 x 4 x 12 = 23,040 b)$480 x 2 x 24 = 23,040 c)$480 x 52 = 24,960 d)$480 x 4.33 x 12 = $24,940.80

“HUD Income Definition” a)$480 x 4 x 12 = 23,040 b)$480 x 2 x 24 = 23,040 c)$480 x 52 = 24,960 d)$480 x 4.33 x 12 = $24, Always use actual pay frequency to factor income. Don’t convert weekly pay to monthly. Best Practice: Make sure pay frequency is documented for all sources of income.

“HUD Income Definition” A divorced individual applies for an apartment. His only income is a government pension in the amount of $4,000 per month. According to the terms of his divorce from his spouse, she receives 25% of this pension. It is paid directly to her from the government. The correct way to factor the pension is: a)$4000 x 12 = 48,000 b)$1000 x 12 = 12,000 c)$3000 x 12 = 36,000 d)$0.00

“HUD Income Definition” a)$4000 x 12 = 48,000 b)$1000 x 12 = 12,000 c)$3000 x 12 = 36,000 d)$0.00 As of June 2009 the HUD handbook was revised to state: Other state, local government, social security or private pension funds paid directly to an applicant’s/tenant’s former spouse pursuant to the terms of a court decree of divorce, annulment, or legal separation are also not counted as annual income and should be handled in the same manner as 4, above. The decree and copies of statements should be obtained in order to verify the net amount of the pension that should be applied in order to determine eligibility and calculate rent.*

“HUD Income Definition” An individual applies for an apartment. She is a PT student, aged 25, with the following financial aid: $10,000 annual scholarship $5,000 annual grant $5,000 annual loan Tuition costs $7,000/year She has a Section 8 voucher. The correct amount of income is: a)$8,000 b)$15,000 c)$20,000 d)$0.00 e)$13,000

“HUD Income Definition” a)$8,000 b)$15,000 c)$20,000 d)$0.00 e)$13,000 (b) Count financial in excess of tuition (c) Loans never count towards income (d) Since she has Section 8 you have to count this (e) Loans do not count towards the formula

“HUD Income Definition” A self employed roofer applies for an apartment. Each month he makes $2,000 but spends $400 on roofing supplies; $100 on child support; and $100 on expenses for his roofing truck. The correct way to factor this income is: a) $2,000 x 12 = $24,000 b) $1,600 x 12 = $19,200 c) $1,500 x 12 = $18,000 d) $1,400 x 12 = $16,800 e) None of the above

“HUD Income Definition” a) $2,000 x 12 = $24,000 b) $1,600 x 12 = $19,200 c) $1,500 x 12 = $18,000 d) $1,400 x 12 = $16,800 e) None of the above For self employed individuals you count NET income after business expenses are deducted.

“HUD Income Definition” An individual applies for an apartment. His income consists of a job paying $12/hour with hours/week. There is no other pay from overtime, shift, bonus, tips, etc. and no raise. This is an AmeriCorps job. The correct way to factor the income is: a) $12 x 20 x 52 = $12,480 b) $0 c) $12 x 20 x 4 x 12 = $11,520 d) $12 x 20 x 4.33 x 12 = $12, e) $12 x 25 x 52 = $15,600 f) $12 x 22.5 x 52 = $14,040

“HUD Income Definition” a) $12 x 20 x 52 = $12,480 b) $0 c) $12 x 20 x 4 x 12 = $11,520 d) $12 x 20 x 4.33 x 12 = $12, e) $12 x 25 x 52 = $15,600 f) $12 x 22.5 x 52 = $14,040 1.Some jobs are excluded. See HUD exhibit 5-1. These include VISTA, AmeriCorps, Foster Grandparents, Retired Senior, Senior Aides, Green Thumb, and more.

“HUD Income Definition” An individual applies for an apartment. He says he does not have any income whatsoever. He completes a budget sheet which shows a local Catholic orphanage paying his cell phone bill ($50/month), car payment ($350/month), giving him $150/month in cash to buy food, and $250/month in cash to pay for rent and utilities. You count the following as income on the TIC: a)$0 b)$250/rent + $150/cash but nothing else c)All of it d)Everything except the cash for food e)Everything except the cash for rent

“HUD Income Definition” a)$0 b)$250/rent + $150/cash but nothing else c)All of it d)Everything except the cash for food e)Everything except the cash for rent From HUD Handbook: Owners must count as income any regular contributions and gifts from persons not living in the unit. These sources may include rent and utility payments paid on behalf of the family, and other cash or noncash contributions provided on a regular basis. Groceries and/or contributions paid directly to the childcare provider by persons not living in the unit are excluded from annual income. Temporary, nonrecurring, or sporadic income (including gifts) is not counted.

“HUD Income Definition” An individual applies for an apartment. His household includes himself and a foster child. The foster child is 17 years old; receives monthly SSDI income, and works after school at a movie theatre. The correct way to factor income for this HH member is: a)Count SSDI but not the job. b)Count the job but not SSDI c)All of it d)None of it Use the 2 person income limit for this household: a)True b)False

“HUD Income Definition” a)Count SSDI but not the job. b)Count the job but not SSDI c)All of it d)None of it Use the 2 person income limit for this household: a)True b)False For foster children you do not count earned income but all unearned income is counted. Foster children do not count as household members.

“HUD Income Definition” An individual applies for an apartment. Her household includes herself and a foster adult. The foster adult is 25 years old; receives monthly SSDI income, and works at a movie theatre. The correct way to factor income for this HH member is: a)Count SSDI but not the job. b)Count the job but not SSDI c)All of it d)None of it Use the 2 person income limit for this household: a)True b)False

“HUD Income Definition” a)Count SSDI but not the job. b)Count the job but not SSDI c)All of it d)None of it Use the 2 person income limit for this household: a)True b)False For a foster adult you count both earned & unearned income. Foster adults do not count as household members.

“HUD Income Definition” An individual applies for an apartment. 4 weeks ago he started a new job as a ballpark announcer. The first 2 weeks he had to work 40 hours/week to get trained. After finishing training he started his normal schedule of working only 10 hours per week. His rate of pay is $10/hour and he is paid every week. The employer says nothing will change in the next 12 months (no more training, raise, etc). YTD pay has been verified as $1,000. The correct way to factor income for this HH member is: a)$10 x 10 x 52 = $5,200 b)$1,000 / 4 = $250; $250 x 52 = $13,000 c)$1,000 x 12 = $12,000 d)None of the above

“HUD Income Definition” a)$10 x 10 x 52 = $5,200 b)$1,000 / 4 = $250; $250 x 52 = $13,000 c)$1,000 x 12 = $12,000 d)None of the above You can disregard higher YTD income as long as you clearly document the reasons YTD income is greater than projected income. Best Practice: Use Spectrum YTD Clarification Form

“HUD Income Definition” An individual applies for an apartment with a move in date of January 1. He is unemployed and collecting $500/month in UEB. His application lists a seasonal job starting in April and going through December as a landscaper. The job pays $1,000/month. The correct way to factor income for this HH member is: a)$1,000 x 12 = $12,000 b)$500 x 3 = $1,500; and $1,000 x 9 = $9,000 = $10,500 c)$500 x 6 = $3,000; and $1,000 x 6 = $6,000 = $9,000 d)$500 x 12 = $6,000

“HUD Income Definition” The correct way to factor income for this HH member is: a)$1,000 x 12 = $12,000 b)$500 x 3 = $1,500; and $1,000 x 9 = $9,000 = $10,500 c)$500 x 6 = $3,000; and $1,000 x 6 = $6,000 = $9,000 d)$500 x 12 = $6,000

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Socialserve.com See also

Taking Advantage of Individual Immunity: Pros & Cons of the Recertification Exemption

►Jill King, KHC, ►Brenda Hawkins, VHDA, ►Dennis Cokley, SCSHF&DA,Director Compliance Monitoring & Inspections ►Susan Westbrook, NCHFA, Supervisor of Rental Compliance Operations ►Tim Morgan, Evergreen Construction Co., Raleigh, NC ►Mitzi Ramsey, Winterwood Management Co., Louisville, KY Panel of Speakers

On July 30, 2008, President Bush signed H.R known as the Housing & Economic Recovery Act of 2008 (HERA). The bill included several revisions to the Low Income Housing Credit regulations. The Act:  Eliminates the annual income recertification requirement for 100 percent qualified unit developments, applicable for years ending after the date of enactment. Our Panelists will discuss how their respective Agency developed a policy for implementing this change, and the pro’s and con’s in determining whether to take advantage of the exemption. Recertification Exemptions: Yes or No?

CAHEC’s Policy On 100% LIHTC projects placed in service after July 30, 2008,  CAHEC does allow the implementation of the annual recertification exemption:  as long as the applicable state allocating agency’s policies are properly utilized and  as long as all required forms are used to provide continuous documentation to certify non-income related eligibility status per household annually thereafter.

“It’s a Tug of War”: Determining the Financial Integrity of a Rental Property: Whose Responsibility Is It? Jill Odom, CAHEC Frankie Pendergraph, Pendergraph Companies

Question - Who’s Responsible for achieving and Maintaining Financial Integrity?

Answer …Anyone with a vested interest in the property. This would include: The owner The management agent The syndicator/investor The lender(s) The State allocating agency Who else? Financial Integrity cannot be achieved without a coordinated team effort

Integrity 1.The state or quality of being entire or complete; wholeness; entireness; unbroken state; 2. Moral soundness; honesty; freedom from corrupting influence or motive; -- used especially with reference to the fulfillment of contracts, the discharge of agencies, trusts, and the like; 3. Unimpaired, unadulterated, or genuine state; entire correspondence with an original condition; purity. Syn: Honesty; truthfulness, veracity, reliability, honor.

What is Financial Integrity? – From the Investor’s perspective

Financial Integrity Synonymous with Financial Stability, or Financial Viability The ability of a property to achieve or exceed all of the financial projections relating to its development and operational phases Adhering to or exceeding expectations with regard to timing and delivery of projected tax credits Maintaining property performance standards in accordance with IRC regulations, Federal, State and local laws The ability to generate revenue and absorb costs with minimal variances using a realistic and achievable budget.

Tools for determining Financial Integrity AHIC Watchlist Criteria Development Phase, including lease-up Construction Delays over 3 months Construction cost overruns exceeding 15% of contract or contingency reserves spent Leasing delays over 3 months First mortgage closing delays over 3 months Mechanics Liens Revenue & Expense variances Any change in qualifying units Litigation Bankruptcy

Tools for determining Financial Integrity AHIC Watchlist Criteria Operational Phase High Receivables/High Vacancies Debt Coverage Unpaid real estate taxes Insurance coverage Mortgage or guarantee delinquency or default Deferred Maintenance or extraordinary repairs not budgeted Physical Inspection/Physical Deterioration Significant life-safety issues Unauthorized debt Required Deposits and inadequate funding of reserves GP Removal/replacement GP/management agent failure to perform Litigation or Bankruptcy

Tools for determining Financial Integrity Industry Best Practices – Risk Rating Policies Development Phase Construction/Lease-Up Schedules Financial (sources and uses) Construction Loan status Permanent Loan status Program Compliance General Contractor GP/Sponsor/Management Recapture risk

Tools for determining Financial Integrity Industry Best Practices – Risk Ratings Stabilized Phase Debt Service Coverage Occupancy Benefits (tax credit and losses) Reserves Physical issues GP/Sponsor/Management Program Compliance Insurance/Taxes Reporting Recapture/Foreclosure risk

Tools for determining Financial Integrity LIHTC Program regulations Contracts LIHTC Application and Awards letters Partnership Agreements Management Agreements Guarantee Agreements Loan Documents IRS 8823 Audit Guide

Tips to Attain Financial Integrity To the Owner Be aware of the terms and conditions of your agreements and contracts – insuring that they are reasonable and achievable Timing is EVERYTHING! Use realistic and achievable revenue and expense assumptions – Voodoo math can cripple a project Communication is CRITICAL – share the important details with your entire team, especially your property management agent

Tips to Maintain Financial Integrity To the Management Agent The success or failure of the first year of operations almost always determines the long-term viability of the project Hold a “kick off” meeting with your owners (and syndicator) – to confirm all the specifics of a new property Set-asides Rent/utility schedules Tax Credit delivery/lease-up schedule Review marketing plan Reserves: Funding amounts and timing Review budget Review all promises made in the TC application and pertinent terms of the partnership agreement (ie: reporting requirements)

Tips to Maintain Financial Integrity To the Management Agent Use a “By the Book” methodology of management Know which housing program handbooks are applicable and which regulations to follow for determining initial and continued compliance HUD Handbook 8823 Audit Guide State Allocating Agency guidelines and requirements Landlord/Tenant laws Fair Housing Laws Local Codes ADA/Accessibility & design requirements Know your market and advertise creatively and pro-actively Focus on lease enforcement and resident retention Recruit experienced site staff: provide on-going training, support and motivation!

Financial Integrity of a Rental Property Whose Responsibility? 2011 CAHEC Conference June 8, 2011 Frankie W. Pendergraph, The Pendergraph Companies

What is Financial Integrity? Each of the following people have a different perspective: Contractor Fee Developer Developer/Owner Investor Lender Management Company

Financial Integrity to the Contractor Getting paid pursuant to the contract Getting paid for change orders Minimizing cost overruns Wants plans he can build by Wants the Notice to Proceed at an appropriate time of the year Wants a responsive Owner Wants a municipality he can work with

Consequences of Construction Is the contractor knowledgeable of the programs? Is the Construction Budget realistic? Bonding and obtaining a Letter of Credit How to pay for change orders and cost overruns Timing Penalties – Lease-up Adjusters Untimely Notice to Proceed, Time of Year 3 rd Party Professionals – Architect, Engineer etc. Delays caused by indecisions of Owner Difficulties dealing with municipalities and State permitting agencies Affiliated Contractor vs Non-Affiliated Contractor

Financial Integrity to the Fee Developer Maximizing tax credit pricing Receiving 100% of the development fee Receiving timely equity installments Completing the development on time And get out

Financial Integrity to the Developer/Owner All items under Fee Developer PLUS Putting together the right team Obtaining loans – new underwriting standards Maximizing cash flow Maintaining the property physically and for compliance Satisfying all governmental compliance Meeting occupancy and debt service requirements Per unit operating costs

Consequences related to the Developer and Owner Is the Developer/Owner knowledgeable of the programs? It might work on paper, but does not in reality Building a project not right for the market Unit mix, location, site issues, unrealistic rent structures Not having a realistic budget - development and operations Point chasing Accepting the units before they are truly ready Promising an unrealistic lease-up schedule and rent structure Signing documents without reading them or understanding them Not communicating with management regarding equity and agency requirements Debarment issues, Recapture, Adjusters, Guarantees

Consequences related to the Investor Is the Investor knowledgeable of the programs? Not contributing equity in a timely manner costs the deal Equity documents not matching up with loan documents First year compliance – who is looking Forcing the developer to agree to unrealistic lease-up to get the necessary yield Originators vs. Asset Managers Expectations vary “One more thing…”

Financial Integrity to the Lender Is the borrower/guarantor financially sound? Is the deal financially sound? Can the property operate within the proposed budget? Are the takeouts in place? Is management company capable of maintaining compliance?

Consequences related to the Lender Is the Lender knowledgeable of the programs? Reserve requirements Reporting Dealing with different divisions within a single bank Permanent Lender requirements may delay the closing of the permanent loan Equity timing also may delay closing of the permanent loan

Financial Integrity to the Management Company Can I get my management fee? Can I pay the bills? Cash Flow / Return to Owner Taxes and Insurance, Reserves Physical Condition Cash Calls from Owners Compliance, Keeping the Gov’t happy

Consequences related to Management Is the management agent knowledgeable of the programs? Not meeting the lease up schedule Vacancies and Delinquencies Not meeting debt service requirements Unable to pay bills and transfers to T&I and Reserves Out of compliance – agencies, loan and equity documents, program rules Poor physical condition, deferred maintenance Can’t pay asset management fee, cash flow to owner 8823’s, 2530, black marks, can’t do business

Poorly Developed Property = Poor Construction = Poor Management = YOU WILL BE POOR! Bad Construction = Cost Overruns = More Debt = Less Developer Fee = Less Cash Flow = More Deferred Maintenance = Troubled Property Failed Marketing = Failed Leasing = Failed Cash Flow = Troubled Property = Work-out Plan = Angry Owner who has to put in money, has to answer to the lenders, investors and government agencies, and their spouses! Just 4 vacant units at $400/month = $1,600/month = $19,200/year

Knowledge Clueless = Emptiness (empty units and empty wallet) If you do not know what you are doing, you should not be in this business - or get someone who has the knowledge to help you

Surviving on Limited Resources: Money-Saving Tips from Our Property Managers Debbie Honeycutt, GEM Management, Inc. Sherre Whitley, Evergreen Construction Co. Emisha Reed, Pison Development Group Tammy Murphy, Excel Management Co.

“It’s a Social Game”: Successful Leasing Strategies & Maximizing Curb Appeal Beverly Patrone, Millennia Housing Management Frankie Pendergraph, Pendergraph Companies

“It’s a Social Game” Successful Leasing Strategies Beverly A. Patrone Millennia Housing Management Ltd.

Affirmative Fair Housing Marketing Plan Leasing up a community takes a lot of planning on the management team’s part. During the development of the community the development team normally creates an Affirmative Fair Housing Marketing Plan. These plans are good for 3 or 5 years depending on the type of financing that is on the community.

Affirmative Fair Housing Marketing Plan This plan gives the staff the information needed to market all of the demographic areas. The plan also provides the required marketing sources and community contacts that are to be utilized in the plan.

Affirmative Fair Housing Marketing Plan The marketing done to ensure compliance with the plan should be kept in a binder for proof when an auditor comes to the community. Even though the plan is only required to be updated every 3 or 5 years, it should still be reviewed annually to insure it is still current.

Marketing Plan In addition to the AFHMP, the community should develop a marketing plan. The marketing plan will describe all of the different marketing ideas for the lease up of the property.

Marketing Plan Examples of the types of marketing that can be done: Advertisements Advertisements can be run in various types of mediums such as. Local Newspapers Newspapers in the surrounding cities. Free Local Newspapers

Marketing Plan Local Bulletin Board Newspapers Church Bulletins TV Radio Internet Advertising/Social Networks Craigslist Facebook Twitter

Marketing Plan Community Outreach Use of Flyers, Brochures and Tear Off Flyers at: Churches Pizza Places Convenient Stores Laundromats Gas Stations Small Restaurants Community Outreach Locations (i.e. Department of Job & Family Services, VA Office, & Section 8 Office)

Marketing Plan Get your name out there in unique ways… Pharmacy bags Back of grocery receipts Small town restaurant place mats Pizza boxes Have the local Meals on Wheels pass your flyer out with their deliveries.

Marketing Plan Hold events for your community. Open Houses Resident Party, BBQ, Holiday Gatherings Have the Neighborhood Watch meet in the community room. Live radio spots Hold a Grand Opening Have a Wellness Clinic in the community room Hold a Craft Fair Have a booth at local fairs. Have a table in local events at malls.

Marketing Plans At your community Have realtor signs out front and leading to your community. Have flags displayed outside of the office building drawing attention. Place balloons along the road. Have the curbs cleaned and flowers planted. Make sure that the trash dumpster areas are clean. Make sure that the exterior looks great, no torn screens, broken mini blinds or trash sitting outside.

Marketing Remember …… Be creative ….. Be aggressive ….. Be imaginative …..

Maximizing Curb Appeal 2011 CAHEC Partners Conference June 9, 2011 Frankie W. Pendergraph, The Pendergraph Companies

How is this for curb appeal?

What about this?

What is Curb Appeal? Webster’s defines “curb appeal” as: the visual attractiveness of a house as seen from the street. According to Wikipedia: Curb appeal is attractiveness of the exterior of a residential or commercial property. The term was extensively used in the United States during the housing boom and continues to be used as an indicator of the initial appeal of a property to prospective buyers.

Before – no curb appeal

After – curb appeal

Before

After

Before

After

Frankie’s Definition of Curb Appeal How you, your property and everything about your property is perceived by anyone. It’s just that simple. The desire to live, work or visit a particular location. “Perception is reality!”

Curb Appeal = Perception = Reality Tenant Selection Financial Integrity Occupancy Safety Compliance Issues

What makes up Curb Appeal Written Word and Phone/Answering Machine Publications Phone Notices to Tenants Newsletters Office Hours

What makes up Curb Appeal Physical 55 Drive By 25 Drive By Get out of the car What you have heard Internet Apartment Ratings Current and ex-tenants do talk

What makes up Curb Appeal Staffing Friendliness Knowledge Attitude and Appearance Personnel and Physical Office Starts the moment you pick up the phone Tenants are like children

Curb Appeal PERCEPTION IS REALITY

Soap, Water and Trash Disposal Cheap Just do it Take your blinders off Shop each other’s properties