Can someone ELI5 how the buyer of these LIHTC buildings make money post acquisition?
Being that the affordable and LIHTC space is very niche and easier to digest when you’re developing them, who here is purchasing existing LIHTC deals and what’s the value add play here to make money if you aren’t making a developer fee? Do you get one for repositioning the property?
Following. My firm is currently evaluating a LIHTC value-add acquisition. I'll report back with what I can find out from the acq team.
In Year 5 you can re-syndicate the tax credits and rehab the building, and take a developer fee for that. Or maybe it makes sense and is allowed in Florida to go the QC route and deregulate the units, I don't know enough about the local regulations.
I think you mean Year 15. And from what I hear, in high cost housing markets, municipalities (think NY, SF, LA) make it extremely tough to convert units to market. Conversion only really makes sense in those kind of high cost markets because there is a large spread between LIHTC and market.
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