How to learn LIHTC
Trying to do affordable deals and don't know where to start. Should I hire a consultant? How can ppl learn LIHTC if they've never done LIHTC deals before? Specifically, how do people learn about acq/rehab?
Trending Content - Real Estate Forum
Career Resources
Based on the most helpful WSO content, here are some steps and resources to learn about LIHTC (Low-Income Housing Tax Credit) and acquisition/rehab deals:
Educational Resources:
Consulting and Mentorship:
Practical Experience:
Financial and Guarantee Requirements:
Networking and Forums:
For more detailed discussions and resources, you can visit the Wall Street Oasis forum on affordable housing acquisitions: https://www.wallstreetoasis.com/forum/real-estate/qa-affordable-housing…</a">Q&A: Affordable Housing Acquisitions.
Sources: Q&A: Affordable Housing Acquisitions, Q&A: Affordable Housing Acquisitions, Resources for Learning How to Finance Affordable Housing - LIHTC Course, LIHTC during the next recession, Moving from Appraisals to REPE Acquisitions?
The only way i've seen most groups get into acq/rehab deals is through co-GP's or directly hiring someone who has done a deal. Very hard to get into it and feel comfortable about spending a lot of $ on pursuit costs without a partner who knows what they are doing
Seen a few market rate groups who couldn’t navigate 2021-2022 pricing shift entirely to affordable housing developers…. Just by hiring an SVP lol. Can change the dog in the fight, but can’t change the fight in the dog….
Right, but that doesn't mean they're any good at it, that they'll be successful at it, or that they're even doing what they claim they are.
Affordable can be lucrative, and since the barrier to entry is knowledge, you can theoretically hire your way into some expertise in short order... but at the end of the day it is also a relationship business, and the only market rate group that is shifting "entirely to affordable" is one that was doing extremely few deals to begin with and is still doing extremely few deals. Only so much a single guy can do
Check with different municipalities to see if they offer training programs for those who wish to operate in affordable housing. Don't know where you're located, but I know NYC's HPD (Housing Preservation & Development) has courses. https://www.nyc.gov/site/hpd/index.page
Where do you see training programs on that website? I see term sheets etc. but no in person training programs?
There are some very basic informational courses. There are also some internship-type rotations and programs. There really aren't training programs in the way I interpreted OP to be asking, not at HPD.
Novogradac training courses (not cheap) & AHIC are the industry standard for general training/teaching of the LIHTC program & project structuring.
If you’re wanting to develop then you’re best bet would be to seek out an established/experienced developer & try to convince them to let you JV a project with them. These days most investors & debt providers are going to have some very material barriers to entry for a developer with “zero years of LIHTC experience & zero completed LIHTC projects”…now if you’re sitting on $10mm liquid signing guarantees then they’ll show much less scrutiny toward such details. It’s tough to start developing on your own in this space without extensive experience (under another developer/existing ownership in affordable properties) or extensive financial wherewithal. But if you are sitting on $10mm liquid, I’ll be sending you a bill for my above “consulting”
If you just want to get base level acquainted with LIHTC deals in a region, I'd recommend starting by reading the QAP for your state, that'll be one of the most useful free things you can do to understand the deal structuring a bit more. Outside of that, you can look at the applications other people have submitted to get a good idea of how the other players in the industry build out a deal, and Novogradac should have the other supplementary docs you can review.
Modeling the deals is a bit different, but you can use the application numbers as a baseline and back into a TC pricing estimate based on the state you are in. Where it can get a bit more convoluted is when you layer in soft funds with other mixed requirements or if you are pursuing 9% deals where you'll have to make programmatic changes to hit your point scoring goal.
Acq/rehab follows a similar line of research, the only good public info where you aren't needing to splurge on course stuff is through the submitted applications, but realistically, you can get a baseline competency just using the docs provided by Novogradac.
EDIT: Good point was made about lack of experience being a bit of a headache to navigate especially when trying to get a housing authority on board with approving your deal so I'd either go the route of co-GP if possible until you get a track record or at least have someone/a group that can provide you with a bit of credibility (since reputation can drive a LOT of the results in terms of deals getting done).
Consequuntur sit eaque consequuntur cum reprehenderit quia. Commodi nostrum quae deserunt nobis. Voluptatum est aut optio consequatur laboriosam quia est odit.
Illo consequuntur sapiente ut aut. Sit laboriosam qui accusamus id saepe incidunt facere. Non nemo ea ut neque quis soluta.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...