The unique opportunity is that the Boulder County Housing Authority
would like to make an offer for my 8 unit apartment building, which is
adjacent to there 13 unit building. I would like to help them and help
myself.
I need insight/advice on:
a.How do we arrive at a sales price?(the normal things DO NOT interest
them, ie:ROI,vacancy rate, etc.)((for lack of a better idea, iam using
current county tax evaluation(which is historically low)and a State
Farm per square foot replacement calculation(which is only a
percentage w/o land))
b.What are a Housing Authority "Hot Buttons"?
-ie:(they liked my willingness to lend them the origial building
plans.they like the adjacent/common parking lots(only need one on site
manager). they like that my unit is in very good condition( i do work
myself).))
Need insight! are the following of value to them?
---my tenants are on month to month rental agreement. no long term
leases.(they DO NOT WANT my tenants!)
-- I own apartment FREE & CLEAR.(no mortgage companies,no loans.)
-- Do not need vanilla real-estate company to broker an agreement.
c.How does a Housing Authority do financing for property?
 ? would they be interested in (no down/low down, 25yr, moderate rate)
agreement?
 ? do they commonly pay off owners and use government sources for
financing?
 ?I have a tax advisor BUT she has never seen this situation. could
you direct me to an experienced advisor?
 I do not know how to price these questions, would consider a bonus
for answers/insights to"How to Tame and Ride a Gift Horse.". Thanks!
GRO

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Request for Question Clarification by pafalafa-ga on 12 Jun 2003 14:25 PDT

Hello,

Just wanted to check in and ask:  are any of the comments thus far
useful to you and if so, what more can we provide in the way of an
answer to your question.

Sometimes this process takes a bit of back and forth before the
researchers can zero in on how to best meet the customer's needs.  So,
hope to hear from you...

pafalafa-ga

---

Clarification of Question by grobrien-ga on 16 Jun 2003 19:38 PDT

to pafalafa-ga: responding to request for clarification:
i got most of my questions answered by digging locally. However, you
might have some insight to "tax credits"....the housing authority
director said something about possible "tax credits" as part of the
sales agreement.
What do you know about this? have you heard of "a two for one" tax
credit?
is the credit good for ALL taxes? is the idea of "tax credit" unusual
or normal in charity/housing situations?(my acountant didn't have a
clue about this)
thanks.( ps. first meeting with housing authority went very well.
bottom line seems to be they want building for three reasons
Location,location and location.)

---

Request for Question Clarification by pafalafa-ga on 17 Jun 2003 07:29 PDT

Hmmmm...I *think* I know what they're talking about, but it's hard to
know for certain, since I'm not privy to all the details of BCHA's
plans for the property, or the type of arrangements you all are
considering.

There is a federal program, administered by the States, called the Low
Income Housing Tax Credit program.  Here is a brief description from
the Colorado Housing and Finance Authority site:

------------------

http://www.colohfa.org

The Low Income Housing Tax Credit program (LIHTC) was created by
Congress in 1986 as Section 42 of the federal Tax Reform Act. Its
purpose is to encourage the construction and rehabilitation of low
income rental housing by providing a federal income tax credit as an
incentive to investors. Both individual and corporate investors may
receive ten years of tax credits in return for investing equity
capital into the development of eligible housing projects.

The Colorado Housing and Finance Authority is the designated state
allocating and compliance agency for Colorado, and is responsible for
designing and implementing the program in Colorado.

--------------------

As for the "two for one" deal, this seems to refer to a provision of
the tax credit program that has repeatedly been introduced as a *bill*
in Congress (to increase the amount of credit available) but as far as
I know, has never actually been made into law.  In other words, it's a
nice idea, but it hasn't yet become reality (though I suppose there's
always a chance it will in the current Congress).

By the way, take all this info with a few grains of salt, as I haven't
done any in-depth research on this yet.  But I'm certainly willing to
do so, if you think that would be useful information to post as an
answer to your question.

Let me know if any of this would be helpful.  I'd be more than happy
to describe the operations of the LIHTC program in Colorado in detail,
if that would meet your needs.

Glad to hear, by the way, that things are going smoothly so far...best
of luck.

pafalafa-ga

Hello Grobrien-ga,

Not a bad problem to have!  I can't answer your question with any
specifics, but I just wanted to offer a general comment or two.

I work for a government agency myself, and have some familiarity with
government purchases of private property.

Basically, the government as a buyer is no one special.  You need to
price out the value of your property just as if it were on the
commercial market -- the BCHA will likely accept any offer you put on
the table, if you can convincingly show them it's a reasonable offer
based on current market conditions, and it falls within their budget
capabilities.

A good real estate agent should be able to gin up these kinds of
numbers no sweat, based on whatever similar, recent transactions have
taken place in the area.  At the very least, the value of the land
should be fairly easy to pinpoint, even if the value of the building
is more of a judgement call.

Even if you don't want a real estate agent involved in the actual
transaction, it may not be a bad idea to have them involved in just
pricing out the property for you, and providing detailed information
that you can use to justify the price when you enter into a contract. 
A commercial agent can also tell you what other properties the BCHA
has purchased or leased in recent years and what type of arrangements
were involved (for that matter, BCHA can give you that information
themselves, if they're so inclined).

If they're going to purchase the property outright, it's normally cash
up front.  If they're offering to lease, then you'll have to work out
arrangements that seem to best suit.

Wish I could offer more specifics.

Good luck.

Just another comment:

After reading pafalafa-ga's comment, although he mentioned it, he
didn't call it by name: any RE Agent in the area will do a
"Comparative Market Analysis". They will find several similar
properties, that have recently sold, all near your property.

If you price your property in that range, and do not have an agent
(point this savings out to them) my bet is that since they obviously
want your property, they will take a reasonable offer.

~~Cynthia