Peoples Self-Help Housing. Opening Doors Building Neighborhoods Improving Lives

Transcription

1 Peoples Self-Help Housing Opening Doors Building Neighborhoods Improving Lives

2 The Mission To provide affordable housing and programs leading to self-sufficiency for low-income families, seniors, and other special needs groups on California s Central Coast

3 Peoples Self-Help Housing Over 40 Years Experience providing services on California s Central Coast National Award Winning Community Based Non-Profit Organization Rental and Ownership; New and Rehabilitation; General Contracting; Homeownership Counseling Providing Education, Health and Social Services in Collaboration with local organizations

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5 Rental Housing & Homeownership Development Approximately 1,500 rental units completed and under management, plus 1,100 sweat-equity homes for ownership

6 Planned Developments: common community spaces, apartments, and homeownership through self-help Common Use Space - Community Centers Townhome Apartments Single Family Homes

7 Learning Center Classrooms On-site Health Clinic Providing Primary Care

8 SERVICES Primary Healthcare Clinics Youth Education Enhancement Program K-12 Adult Ed ESL, GED, Social and Supportive Services Financial Literacy, Foreclosure Prevention, Homebuyer Education

9 Quality asset management Property Management The Duncan Group Regulatory compliance services On-site management Education programs & Support staff on-site Effective house rules

10 What s keeping you up at night? General Categories of Sleep Deprivation: Balance Sheet Management Profitability Management (P&L) Corporate Debt vs Equity Financing Cash Management (Ensuring Liquidity)

11 Cash Management Flow (Incoming/Outgoing/Timing) Reserves (Restricted, Unrestricted) Revenues: likelihood of receiving Expenses: ability to control (budgeting) Ensuring LIQUIDITY Filtering financial decisions and plans through meeting the liquidity test first helps ensure sustainable operations and financial soundness (so, let s you sleep better).

12 Liquidity Test Can we afford to do this? - Will we earn enough before we need to spend it? - If yes, then you can afford it, test is met. - If not, what other source can we use to pay for it? - Excess earnings from other lines of business not already paying for something else? - Costs savings that will be realized? - Equity/Grant sources? - Affordable Financing? And if we can afford it, then: - Profit & Loss should improve - Balance Sheet should grow - Mission should be sustainable

13 What Drives Cash Flow? Here s what drives our Cash Flow for our Business: Sources (Incoming Cash) Primary Pipeline (Single-Family, Multi-Family, Rehab and Refinance) Developer Fees (30%) Grants Donations (20%) General Contracting Services (20%) Sale of Real Estate (20%) Secondary (10%) 3 rd Party Service Contracts ($120K; IT, Supportive Housing) Portfolio Management (Asset Management Fees & Program Fees) Partnership Management Fees Financing (Line of Credit, etc.)

14 What Drives Cash Flow? Here s what drives our Cash Flow for our Business: Uses (Outgoing Cash) Primary Pipeline Sustainability Overhead Labor Loan Payments Growth Land Acquisition Land Holding and Development Costs Site Research Secondary Legal Costs Insurance Property and Construction Advances Program Specific Overhead

15 What Different Drivers Does Your Business Have?

16 What are the Risks Affecting Drivers? Availability of Affordable Financing Real Estate Cost Market Public Funding, Support & Opportunities Legislation Local, State, Federal Market Volatility interest rates and lender regulations Pipeline Feasibility & Viability Geographic Location Construction Costs Staff Retention

17 Ways to Manage Risks Specialized Knowledge and Negotiating Skills To navigate and affect specialized and complex legislation and funding sources To establish and foster local, state and federal government relationships Diversity of Pipeline Product Type Mix Financing Types: 4% and 9% Tax Credit Deals Housing Types: SRO, Veteran, Senior, Multi-Family and Single Family New Construction and Acquisition & Rehab Readiness/Timing (mix of projects in different development stages Entitlement, Financing, Construction, Lease-Up / Sale Geographic Locations Ensure projects are competitive (different markets, high needs/demand areas) Extending Escrows & Options Collaborations & 3 rd Party Service for Fees Lines of Credit Acceptable level of working capital Reserves (supplement long-term financing) Endowments Restricted vs. Unrestricted

18 How do You Manage Your Risks?

19 What is the Right Level of Liquidity? Who determines this in your organization? Board, CEO, CFO Is there a policy? How is this determined in your organization? Size of business Uniqueness of business By individual line of business basis or consolidated? Other?

20 What are Your Take Aways from Today s Peer Exchange Session?

21 Peoples Self-Help Housing Turning Dreams into Reality John Fowler Opening Doors Building Neighborhoods Improving Lives

22 Peoples Self-Help Housing Corporation NW CFO Peer Group May 2014 What s keeping you up at night? Cash Management Ensuring Liquidity Can We Afford This? What Drives Cash Flow? What Different Drivers Does Your Business Have? What are the Risks Affecting Drivers? Ways to Manage Risks How do You Manage Your Risks? What is the Right Level of Liquidity? Who determines this in your organization? How is this determined in your organization? What are Your Take Aways from Today s Peer Exchange Session?