Greater Minnesota Housing Fund (GMHF) staff interviewed representatives from organizations across the U.S. that are active in NOAH-related transactions. The interviews yielded NOAH preservation best practices and lessons learned gained in multiple metropolitan areas throughout the US and locally in the Twin Cities.
The information gathered from these conversations formed the strategic basis for GMHF’s thinking when setting up the NOAH Fund.
Below are some of the key points gleaned from those interviews.
- Securing lower-cost capital results in lower, more affordable rents for tenants.
- Due to the speed at which speculators and national investors acquire properties, it is essential to have the readily available capital and professional capacity to close deals within 60 days, or NOAH properties will not be secured for preservation.
- NOAH property management requires highly engaged property management complemented with fund-level asset management to oversee budget conformance, leasing, staffing, etc. Robust asset management is key to a successful portfolio.
- Cost effective scale requires transactions to be at least 45 rental units or more in one or more buildings and/or locations.
- Strategic property improvements include modest upfront and ongoing repairs to address tenant needs and provide curb appeal to reposition property. The need for large-scale improvements in a potential acquisition is generally cost-prohibitive and deleterious to the success of a NOAH project.
- Energy-saving, green improvements may help increase cash flow by lowering operating costs.
- Acquiring properties in opportunity areas near transportation, jobs, and quality schools increases quality of life and outcomes for low-income individuals, families and children.
GMHF thanks the following organizations for sharing their lessons learned and best practices:
- Mercy Housing, Chicago, IL
- Eden Housing, Hayward, CA
- National Housing Trust, Washington, D.C.
- Homes for America, Annapolis, MD
- Abode Housing, Fremont, CA
- Hispanic Housing Development, Chicago, IL
- MidPen Housing, Mountain Valley, CA
- Community Preservation & Development Corporation, Norfolk, NA