Amend 2 - Laserfiche WebLink

Home Browse Search

Sample Pro Forma Single Family Rentals oulloers rlsK lnSurance as Insurance atalnsr casuatry ano ilaoltty nsKS ounng conslrufiton. urnenutse,builder's risk insurance is typically obtained by the building contractor and will be included in theconstruction contract amount, above. ln addition, grantees typically require developers to obtaincommercial general liability insurance, the cost of which is typically covered by the developer fee. ' NSP funds or other funds can be used to pre-fund a replacement reserve so long as the amount isreasonable and as required by a lender or equity investor. ' operating reserve ^ Pre'funding this reserve can cover the cost of operating the property while lease up isoccurring, or during periods when the property is not fully leased up. ln this example, the operating reservewascalculatedconservativelyastwomonth'srentrevenues. TobefundedbyNSp,HUDrequiresthatthis amount be reasonable and as required by a lender or equity investor. ' Tenant relocation- For occupied properties requiring relocation of tenants, the developer agreementshould spell out whether the financial and management responsibilities of tenant relocation lie with thegrantee or developer. o Rent-uP marketing costs - This line item includes the estimated costs of rent-up, such as advertising.Develop€rsshould makesurethatthestaffingcostsofrent-uparecoveredeitherinthedevelopment budget or in the operating budget for the fir5t year, but not in both pro formas. ' Soft cost contingency - This is a contingency amount that may be used if one or more soft costs are higherthan anticipated. ' Developer fee - This is the fee a developer charges to the project for their time and risk, Developer fees asa percent of total development costs generally fall between 10% and 15%, tf funded by NSp, HUD requiresthat the fee be reasonable and customary in the market for this type of development project. Developerfees should be calculated based on the estimated time, effort and risk required of the developer. ln general, higher developer fees are allowed if the developer is not being reimbursed by any funding source foi