Year 15: Expiring Partnerships

expiring partnerships

A publicAtion of GreAt lAkes cApitAl fund Volume 19 | issue 1 | 2012

© 2012 Baker Tilly Virchow Krause, LLPBaker Tilly refers to Baker Tilly Virchow Krause, LLP, an independently owned and managed member of Baker Tilly International.

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d e p A r t m e n t s

f e A t u r e s

when year 15 can be year 11 ...............................6

Today’s Year 11/15/Disposition Market

year 15 exit process ...............................................8

AKA. What the Hell Did I Get Into?

shift happens ........................................................13

Current Exit Strategies in an Ever Changing Market

appraisals for year 15 properties .......................14

new board members ............................................25

building homes & healing vietnam veterans ...2828

ceo’s message .........................................................5

The Impact of Year 15

effective leadership ..............................................22

Leadership Insights

title issues ..............................................................24

What Does the Title Industry Do?

events & happenings ...........................................26

advertiser’s index .................................................30

8

6

14

ceo’s messAGe

THE IMPACT OF YEAR 15by marK mcdaniel, ceo/presidentgreat laKes capital fund

In 1993, when the Capital Fund became operational and we began raising equity for Hous-

ing Tax Credit developments with a 15 year investment horizon, the “unwind” timeframe

seemed like it was a lifetime away. My youngest son was born in 1994 and he is 17 now. So

our early tax credit investments (like my kids) have grown up much quicker than I could

have imagined. Many of our early assumptions and many of the things we (and our very

capable consultants) thought we knew have turned out, in reality, to be a little different than

what we had originally envisioned...very similar to watching our children grow and mature.

This edition of Avenues takes a look at our investment partnerships that have reached — or

are approaching — their year 15 disposition. It reflects back upon assumptions that were

made back when we established the early investment fund partnerships and we closed into

our first several batches of project partnerships. We start with some insights about decisions

we all made 15 years ago: from the developer’s, lender’s and investor’s perspective. We pro-

vide some perspectives about the issues and decisions faced today by developers, lenders, and

investors as these partnerships are “unwound”.

As is often the case, some projects move through the “unwind” process smoothly; but, in

other cases, the interests of the various parties aren’t well aligned and things can get messy.

It sort of reminds me of a Vince Lombardi quote: “What in the hell is going on out there”!!!!

As you will see, there is no one single method to unwind the partnership at the end of the

15-year compliance period. Most people thought it would be some kind of cookie cutter

process. Unfortunately, it isn’t. We have found it takes a lot of patience, cooperation and

technical skills to manage through the process. It’s important that all parties start looking

at and preparing for disposition well before the 15th year (like in year 10 when we have the

ability to plan for and be flexible with our exit strategies).

5

GOVERNING BOARDWendell Johns, ChairRetired

Michael J. Taylor, Secretary/TreasurerPNC Bank

James S. BernackiComerica Bank

Catherine A. CawthonFifth Third CDC

William C. PerkinsWisconsin Partnership for HousingDevelopment, Inc.

James W. StretzGeorge K. Baum & Company

Donald F. TuckerDon Tucker Consulting

Paul J. WeaverRetired

CORPORATE OFFICERSMark S. McDaniel, President & CEOChristopher C. Cox, CFOJames L. Logue III, COOJennifer A. Everhart, Executive Vice PresidentRick Laber, Executive Vice President

This magazine is published quarterly by the Great Lakes Capital Fund (GLCF) to provide readers with informa-tion on the Low Income Housing Tax Credit and other community development resources.This publication is copyrighted. The reproduction of Avenues to Affordability is prohibited by law. For additional copies, comments, con-cerns or to be added to the mailing list, please contact the Great Lakes Capital Fund office at 517.482.8555 or visit www.capfund.net.Editorial and AdvertisingMary McDaniel, CMP • Alternative Solutions, LLC 517.333.8217 • [email protected] DesignMelissa Travis • Ink Ideas Graphic Design, LLC989.272.3101 • www.inkideasgraphicdesign.comCover IllustrationPam Coven • Coven Creative989.834.2009 • www.covencreative.usLansing Office1000 S. Washington, Suite 200Lansing, MI 48910 Phone 517.482.8555Detroit Office1906 25th StreetDetroit, MI 48216 Phone 313.841.3751Indianapolis Office320 N. Meridian St., Suite 1011Indianapolis, IN 46204 Phone 317.423.8880Madison Office2 E. Mifflin Street, Suite 101Madison, WI 53703 Phone 608.234.5291Willowbrook Office7223 South Route 83, PMB 227Willowbrook, IL 60527

...continued on page 27

T he world is searching for $value$ — so why should the LIHTC universe be any different? Today’s market for dispositions has syndicators, investors and developers each trying to position

themselves as a winner in the back end game. The key is whether there is any value in the limited partner’s interest (property plus reserves is worth more than the outstanding debt) and how that value is split between the Limited and General Partners. The search for value can result in wide ranging conversations but I always come back to this formula when designing my strategy: Know the Property, Know the Stakeholders, Know the Documents (all the documents) and then make your plan.

determining valueShort of getting an appraisal a simple back of the envelope exercise can quickly tell you whether there appears to be any value in your property your LP might want to capture a piece of. Using your current NOI — and assuming your rents are at the maximums you can achieve and your expenses are comparable to other LIHTC properties in your area — simply cap the NOI (after replacement reserves) at the Cap Rate currently being used in your market (you can call your friendly local multi-family appraiser to get a “sample” cap rate). Take this value and subtract from it the outstanding debt on the property. If the net num-ber is negative or a small positive it is highly likely exiting your lim-ited partner will be easier than figuring out how to keep your property afloat for the next 15 years.

WHEN YEAR 15 CAN BE

YEAR 11today’s Year 11/15/disposition market by dan mendelson

dtm & associates

f e A t u r e

partnership agreementsProperties coming out of the 10 year credit period or hitting Year 15 were placed in service 1998 to 2001. The partnership agreements will generally call for a spilt of sales proceeds between the General and Lim-ited Partner at 50/50 or up to 75/25 with the General Partner receiving the higher percentage. Many of these partnership agreements have op-tions for the General Partner to purchase the property but nothing that requires the General Partner to take any action (sell the property, buy the limited partner’s interests at Fair Market Value, etc.).

Two things to note here: 1) with no party having an ability to force an action the General Partner can opt to try and continue operations as is or negotiate a “number” with the Limited Partner. 2) If you are required to sell the property or have an option based on sales proceeds, capital accounts may come into play prior to any split of proceeds — this can significantly change the flow of cash proceeds. As you can see you really need to know what your document says- your proceeds may depend on it.

right of first refusal & option to purchase limited partner’s interest — the non profit advantageMost nonprofit transactions coming up on Year 15 contain a Section 42 authorized Right of First Refusal and an Option to Purchase the Limited Partner’s interests for a price equal to the greater of the Fair Market Value of the Limited Partner’s Interests or Exit Taxes. Which method is used depends on a number of factors including, reserves,

6 GreAt lAkes cApitAl fund

state transfer taxes, exit taxes and value (if any is present). The vast ma-jority of non profit transactions are purchasing the Limited Partner’s interests for $100. There really was an advantage to dealing with Great Lakes, Ohio Capital, Enterprise and NEF.

early exitsWith the removal of the requirement of posting a Tax Credit Recapture bond in the HERA legislation several years ago the market has seen an increase in Limited Partners exiting Limited Partnerships prior to the 15 year initial compliance period. This may also coincide with a sale of the General Partner interests and a distribution of proceeds to both the Limited and General Partner. Here again getting to “locked up” $value$ is often the driving factor. For the developer without value, an early exit can reduce reporting and audit requirements. Early exits though do not reduce recapture liability and/or guarantees from the Developer/General Part-ner- most investors will require an indemnity agreement and underwrite the indemnitor’s financial capacity to make good on the guarantee.

disposition feesIncreasingly, the market in new transactions is seeing disposition fees included as part of the documents governing the Limited Partner’s exit. These fees will help cover the Syndicator/Limited Partner’s costs re-lated to exiting. Also have seen investors/syndicator’s try and charge this fee for old deals, even if the fee is not included in the original docu-ments — and why not try, might get somebody to pay it!

broKers ready to help and are standing byBoth Limited and General Partners have easy access to several firms specializing in selling LIHTC properties or interests. These firms have been very active in Early Exits and are very familiar with the valuation process — although perhaps more often from the Limited Partner’s perspective. Owners interested in selling need to just pick up the phone and Limited Partner’s trying to determine top of the market pricing or get assistance in selling a property know the numbers to dial.

other observationsIn working on projects, I have noticed that some investors/syndicators seem to either have not read the documents or make things up in the hope that you have not read the documents. Also, some syndicators/investors are not motivated to work on exits and want to wait till they have “the time” to deal with projects or till the losses run out.

final notesGo read your documents on your old deals, pay attention on your new deals or else someone may pick your pocket.

editor’s note: in the glcf portfolio, it is typical for the partnership

agreement to provide for the transfer of the limited partner interest

for a price of the assumption of existing outstanding debt plus trans-

actions costs (accounting, legal, etc.) and exit taxes when debt ex-

ceeds the value of the investment.

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by James white, eQuity dispositionsgreat laKes capital fund

f e A t u r e

When the Low Income Housing Tax Credit (LIHTC) Program was rolled out to market in the late 1980’s and reached maturity in the early 1990’s, many developers and investors found themselves explor-ing virtually uncharted territory. Seeking to understand how to best utilize the LIHTC program as well as maintain consistency with con-gressional intentions and policy expectations, General Partners (GP’s) planned for the eventual exit of their Limited Partner (LP’s) investors from their operating partnerships. Fast forward to today, over 25 years later. The industry is mature and in full bloom with many of those projects completed in the 1990’s reaching (or are close to reaching) the end of their compliance period; referred to by many in the LIHTC industry as “Year 15”.

While planned for, most of the developments are finding that they don’t have the projected real estate value that investors and finan-cier’s anticipated at the initial development stage of those properties. Whether this is due to market conditions, operating performance, or other factors; the results are that developments have reached or are reaching the end of their compliance period and are often highly lev-eraged. For example, of the 30 properties combined in GLCF Fund I through Fund 4, nearly 90% are overleveraged resulting in virtually “no value”. Most of these debt laden properties are so overleveraged that Lenders may be faced with the prospect of foreclosure, significant restructuring, and/or debt forgiveness.

Limited Partner investors, on the other hand, have a different set of circumstances to contend with. In the 1990’s, the primary concern of most investors was “yield on investment” (also known as ROI) based on tax credits received and losses generated. Capturing value post compliance period was a secondary concern to targeted investment and social impact. However, in today’s LIHTC industry, competition and market forces have investors evaluating, not only social impact and ROI, but appreciation value as well. Investors want to participate in that “back end” value which is often reflected in the operating partner-ships between LP investors and GP/Sponsors.

As a result, investors are requiring third party assessments of value. This is accomplished through obtaining either a real estate appraisal and/or an appraisal of “partnership interest”. In some cases, investors will accept or rely upon a “Brokers’ Opinion of Value (BOV)” to estab-

YEAR 15 ExIT PROCESS


lish or benchmark value. One reason investors and GP/Sponsors may want to obtain third-party evaluation of value is because one of the critical components of valuation (i.e., the cap rate) has fluctuated wildly over the past sev-eral years. This is due in large part to the vola-tility of the real estate market since the Great Recession of 2007/2008. Within the GLCF portfolio, several GP’s in our first four multi-investor funds were not-for-profit sponsors who were expected to ac-quire the operating partnership LP interest via a “Right of First Refusal (ROFR)” clause at the end of the project’s compliance period. This ROFR clause allows the non-profit GP to acquire the LP interest of the operating partnership for a pre-determined amount; usually the assumption of existing outstand-

ing debt plus transactions costs (accounting, legal, etc.) and exit taxes. In terms of estimated transaction costs, they vary but, typically range between 1–3 per-cent of total value depending on a number of factors. For instance, in the case of funding by a state Housing Finance Agency (HFA) the exit transaction may need to be reviewed by the HFA and approved by its legal dept. For example, in Michigan; if a project was funded with Michigan State Housing De-velopment Authority (MSHDA) financing, it will need to be reviewed by MSHDA and approved by its legal dept. In addition, in Michigan, even if the LIHTC partnership was not financed by MSHDA, it will still need a compliance review (i.e., state review) by MSHDA in order to complete the exit

transaction. However, in the state of Indiana, if a project has reached the end of its compli-ance period, no such review is required and transfer documents can be filed without any state HFA approval.

In either case, the operating partnership will incur legal costs to draft “exit documents” for LP investors. If multiple LP investor Funds are involved, each “Fund” will need to draft legal documents as well as approve the “exit transaction” on behalf of its investors. In most cases, “partnership reserves” of an operating partnership can be utilized to absorb these transaction costs.

In addition to the ROFR option provided to GP/Sponsors, most agreements allow (of-ten within the ROFR) for the GP/Sponsor

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f e A t u r e

to purchase the real estate assets from the operating partnership at “Fair Market Value (FMV)”. While given as an option, this choice is rarely (if ever) chosen.

In terms of exit strategies, given that develop-ments may be debt laden, some GP/Spon-sors, particularly not-for-profits, may seri-ously consider foreclosure as a potential “exit strategy”. In some instances, Lenders may choose the foreclosure option (as opposed to debt restructuring with the current or poten-tial new owner) to determine the value of the collateral, which may or may not maximize the value of the asset. In addition, some non-profits may exist in “name only” due to an in-ability to maintain board participation and/or corporate viability. Without resources or the ability to maintain the partnership as a “going concern”; not-for-profits may be forced to ei-ther sell their interest to a third-party or allow the property to go into foreclosure.

Given that most properties are over leveraged, the most common exit for the LP is for the GP to assume the LP interests for $1 plus costs as previously described. At any rate, GP/Sponsors and LP Investors should pre-pare for the disposition and transfer of part-nership interest.

GP/Sponsors should begin evaluating their projects operations around the tenth year of being placed in service. If the project has expe-rienced losses that outpace original projections, they should work with their syndicator to look for ways to minimize the impact of those losses to their LP investors. Then over the next few years, manage those issues that might impact the partnership interest transfer.

James white is an asset manager and eQuity dis-

position specialist at great laKes capital fund.

he can be reached at [email protected].

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M uch has been written during the last 10 years regarding the disposition of LIHTC projects reaching the end of their initial compliance periods - the aptly named “Y15” proj-

ect — and hardly a week passes without a new flyer or an email blast promoting the latest and greatest “exit” strategies for such properties. And why not? Ours is a dynamic industry, and the profile of tax credit projects has changed over time from smaller, more rural transactions to larger, more urban projects using multiple sources of financing with of-ten conflicting regulatory structures. The shift in project type coupled with state and federal regulatory changes during the last 25 years limit a standard disposition strategy for most LIHTC properties and may complicate any exit strategies that are currently available.

In order to understand how to exit an LIHTC transaction in the pres-ent, you first need to understand what provisions were made to exit the transaction at the beginning. This starts with a thorough review of the existing partnership or operating agreement and any related loan documents. Partnership agreements, operating agreements, lender agreements and regulatory agreements can and do frequently contain terms governing the sale of the development or partnership interests but may also seek to control the disposition of projects after the initial compliance period.

Current exit strategies available to owners include the sale of property, sale of a partnership or member interests, bargain sale of the property or a partnership interest, re-syndication, or a qualified contract as dis-cussed below.

sale of propertyAt the end of the compliance period, an LIHTC partnership may sell the property to the general partner, a related party, residents or other third-party buyer. Most partnership and operating agreements con-tain specific requirements for the sale of the property; however, other restrictions may also apply depending on lender requirements. Care should be given to the cash distribution waterfall of the sale proceeds and the gain and loss calculation on the sale on tax basis.

l e G A l c o r n e r

SHIFT HAPPENScurrent exit strategies

in an ever changing marketby ted roZeboom

loomis, ewert, parsley, davis & gotting, pc

sale of ownership interestsWhen the compliance period ends, in general, the investor may choose to sell its partnership interest to the general partner. Alternatively, the general partner may exercise a call option to buy the investor’s partner-ship interest pursuant to terms within the original partnership agree-ment. Apart from any approval required under the partnership or op-erating agreement for the sale or transfer of ownership interests, other restrictions may apply depending on lender requirements.

bargain sale of property or ownership interestUpon reaching year 15, the LIHTC partnership might donate the property to a charitable organization or the investor may donate its partnership interest to a charity through a bargain sale transaction. As discussed above, partnership agreements, operating agreements, and loan documents frequently contain provisions governing the sale of the project or ownership interests in the project.

re-syndicationAt the end of the 15-year compliance period, an owner of an LIHTC property might also consider rehabilitating the property through re-syndication.

Qualified contractAccording to IRC §42(h)(6)(F), an LIHTC project could become a market-rate project if upon the owner’s written request and within a one-year period beginning on the date after the 14th year of the com-pliance period, the housing credit agency is unable to find a qualified contract for the acquisition of the low-income portion of the building. Some partnership and operating agreements require a general partner to pursue a qualified contract in year 14 while others are silent on the issue. Owners should be on notice, however, to check to see if more stringent requirements are provided in any agreement or in the laws of the state where the project is located.

ted roZeboom is an attorney with loomis, ewert, parsley, davis & got-

ting, pc. he can be reached at [email protected]


APPRAISALS FOR

YEAR 15PROPERTIES

f e A t u r e

by alan l. Johns, mai, cpm, appraisal advisory groupand m.a. allgeier, mai, allgeier company

Q how do appraisers of lihtc properties looK at “encumbered” and “unencum-bered” valuations? does this vary depend-

ing on the purpose for the appraisal (sale, refi-nance, purchase of partnership interests within the current ownership entity, etc.)?If the purpose of the appraisal is to estimate a market value of the real estate, then the methodology does not change with the intended use or intended user – a lender for financing, an owner for negotiating a sale, an investor buying a partnership – it is the same. Market value is market value. In some instances, additional values are requested, such as the value of the partnership interest in a LIHTC property, which may include tax credits…but that is an investment value component that is separate from the market value of the real estate.

As to how appraisers look at encumbered vs. unencumbered, the crux of the valuation is the highest and best use of the property. The primary difference between valuations as “encumbered” versus “unencumbered” is whether the appraiser is going to value the property with the govern-ment restrictions in place (encumbered) or as a market rate property without any government restrictions (unencumbered). In considering highest and best use, there are four tests: legal permissibility, physical possibility, financial feasibility and maximum productivity. If a prop-

As more and more LIHTC properties move toward the end of their 15-year compliance periods, we thought it would be useful to check in with our partners who provide appraisals.


erty is encumbered with legal restrictions, then those restrictions must be considered in determining the value. If they are long term, as in 30 year affordability restrictions with most LIHTC properties, the appraiser must use the impact of both the rent and income restrictions in the valuation.

However, many clients will also request a market value assuming there are no restric-tions. Although this is a hypothetical con-dition (since the restrictions actually DO exist), the report must make it very clear to the reader that the appraised (encumbered) value is based upon the current reality. The “unencumbered” value assessment may as-sist the client in making a decision about seeking regulatory relief from the state al-locating agency. For example: a property

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may be located in a gentrifying market where, if the restrictions were not in place, the property would produce considerably higher rents. This then becomes a consid-eration in the test of financial feasibility and/or maximum productivity. The “unen-cumbered” value assessment could help the client determine if he/she should attempt to remove the restrictions. In many cases, of course, LIHTC rents mirror market rents and there is very little difference in value with or without restrictions.

Q what information does the appraiser need from the entity that is

reQuesting the appraisal?1. Legal description2. Property sales history for past 3

years, or under current sales contract3. Current offering information if prop-

erty is now offered for sale4. Survey or site plan5. Building Plans & specs (if available)6. 3-year history of income & expenses7. Detailed rent roll8. Unit mix & unit sizes9. Quoted rent for each unit type (ei-

ther “contract” or “basic” rental rates)10 . Rent concessions if any11. Explanation of unusually high/low one-

time expenses (e.g. capital expenses)12. Copy of recent Rent Comparability

Study (RCS)13. Copy of Capital Needs Assessment14. Expiration date of rental assistance

(e.g. HUD Section 8 HAP) con-tracts if applicable


Copies of documentation related to all re-strictions on the property is also critical, in-cluding the AMI levels, any special set-aside such as senior or handicapped restrictions, and the remaining terms of those restric-tions. If rental subsidies exist, copies of the contracts that provide the rents, utility al-lowances and remaining term of the contract are essential.

If a property will be required to make specific improvements because of HUD REAC, or if there is deferred maintenance that must be addressed (such as a leaky roof ), these costs must be deducted from or at the very least considered within the final value estimate. But any on-going maintenance is addressed in the routine operating expenses.

The current loan documents are not typically relevant. A property is appraised as if unen-

cumbered by debt, and under the assumption that market-level loans would be available to any buyer. Once an appraiser starts introduc-ing financial characteristics of a particular ownership, the value is no longer considered a “market value” and becomes an “investment value” as it is the value to a particular investor, not the general market. But generally speak-ing, a good appraiser will accept and review any information related to the real estate that is made available to better understand the subject being appraised.

Q if a future rehab is contemplated, what methodology & fac-

tors are used to determine cur-rent (as is) value and future (as improved) value? how much do you depend on the operating history of the subJect property

f e A t u r e

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vs. the rents & expenses you’re seeing in the marKetplace? with year 15 appraisals: is there a different weighting that’s used between the 3 basic method-ologies for determining the value of the property?The appraiser has three methods for estimat-ing value: Income Approach, Sales Compari-son Approach and the Cost Approach. The highest and best use for a given property will determine which approaches are most ap-plicable; but for restricted multi-family real estate, the Income Approach is the primary driver. The property is only worth the income it can produce and any investor/buyer would analyze the investment based on a reasonable return on that income.

When an appraiser values a property in an “as is” condition, this is typically the current physical condition of the property with its current economic characteristics as of the date of value (i.e. the date of the appraiser’s inspec-tion). “As is” values consider not only the his-toric operations of a property, but must con-sider competing properties as well. A property may have very high occupancy but at the cost of low rents. Or a property may be beautifully maintained and managed, but to an excess. A comparison of historical operating income and expenses to other similar properties is critical to the analysis. The impact of any new product coming on-line must also be considered.

If the appraiser is requested to value the property as if it were already rehabilitated, an itemized list of capital improvements will be required as well as the estimated date of the construction completion. Certain capital im-provements may represent an increase in the obtainable market rental rates as well as low-ering expenses (i.e. maintenance costs, utili-ties, etc.). In the prospective value, because the appraiser is reporting a future value after construction, the costs of construction are not included. The historical operations are still very important, but are adjusted to reflect the

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renovations. This can include utility savings with more efficient systems, new windows and reduced maintenance expenses. If rents can be increased, depending on the restric-tions to the property, then the impact of in-creased rents on occupancy is considered. In some instances, with Section 8 or RD proper-ties where the contract rents may not increase even with the renovation, the only impact would be in reduced expenses and potentially in a reduced capitalization rate as well as an increase in the remaining economic life.

The Sales Comparison approach is almost al-ways developed, but rarely does it produce as reliable an indication of value as the Income Approach. For newly constructed LIHTC developments there are seldom comparable sales because LIHTC real estate cannot be transferred without a recapture of the cred-its. This would cause market rate properties

the cost - and the actual income the project is going to generate, capitalized. And so it is self-proving.

Sometimes appraisers do a preliminary ap-praisal which is called a “restricted use” format appraisal. This is much shorter than a typical appraisal (i.e. summary or self-contained) with only an Income Approach to value being un-dertaken. These are typically done before any signed purchase agreements are in place and they are utilized by the potential purchaser in the negotiation process. The “restricted use” ap-praisal will provide an estimate of market rent as well as an indication of value of the property. This appraisal can be done at a reduced fee and gives the potential purchaser the oportunity to ascertain whether the purchase of the property is attainable based upon both the purchaser’s and the seller’s needs and/or requirements. A “restricted use” report must be expanded to at

to be used; or perhaps older LIHTC proper-ties; or perhaps other subsidized properties that might have little physical comparability. In the end, the economic characteristics of the comps are adjusted to those of the sub-ject – which ends up being similar to the Income Approach for determining value. A basic premise of the Sales Comparison Approach is that the more a comparable is adjusted the less reliable of an indicator of value that comparable and subsequently ap-proach becomes.

Appraisers generally don’t use the Cost Ap-proach (unless required to by the client, such as with HUD’s MAP appraisals). The cost to construct the property is typically going to be higher than its market value. The eco-nomic obsolescence (depreciation) is mea-sured as the difference between the income needed to make the project feasible – to meet


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least a “summary” format appraisal for any po-tential lender, investor, etc.

Q what are the most diffi-cult preservation proper-ties to appraise & why?

We have found that the RD properties that are being renovated with LIHTCs can be very difficult, but that is due to the number of us-ers of the appraisal (all with their specific re-quirements). Users include: the state allocating agency, RD, investors, developers and lenders. The individual analyses are not particularly dif-ficult, but pulling the pieces apart to provide all of the required values and reporting them in a way that is not only understandable to all read-ers but accomplishes the goals of all users is challenging. In December 2011, Rural Devel-opment implemented new appraisal guidelines which have led to various coordination issues between the different governmental entities as well as the private sector. We strive to have a single product that provides consistency of analysis to all users, saving the project the cost of having multiple appraisals.

Q how do you establish value on properties with expiring section 8

contracts? does the valuation change if the developer ob-tains a letter from hud stating the proJect will receive a new hap contract (but it’s subJect to annual congressional appropriation)? how do you value properties with a section 8 “overhang” (i.e. where the current section 8 rents exceed local “fair marKet rents”)?If the HAP contract is under annual appro-priations, we typically make an “extraordinary assumption” stating that we anticipate the HAP contract will continue through its term (i.e. 10 – 20 years). The critical component in valuing properties with HAP contracts is understanding the durability of the income. There are few markets where rental subsidies go unused, and so demand/occupancy is rare-ly questionable.

When the Section 8 rents exceed market rents, the appraisal can estimate a value of this income difference. A present value of the future rent differential income stream is estimated through the remaining term of the HAP contract. This is considered to be a val-ue of the intangible personal property (VIPP)

and should not be confused with the value of the tangible personal property (V TPP) or value of the real property (VRP).

But with the multiple HUD programs with varying methods of determining contract rent (OCAF vs. rent comp study to name


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two), a property could be easily over -or under-valued. We recently appraised an el-derly Section 202 property that was recently beautifully renovated, has a renewed 20 year contract with HUD, the rents are double market levels because they have received rent increases annually for years based on OCAF, and we were told they cannot be re-duced over that 20 year contract. We talked with every local and regional HUD official to verify the last point and in the end were convinced that it was the case. We therefore used the current contract rent, reasonable expenses and capitalized the net income at a moderately low risk cap rate.

On the other hand, if it is known that a property is going to lose its rent subsidy but continue with the affordability restrictions, we then comp the property to other restrict-ed properties that do not have rental subsi-

dies, such as is the case with many LIHTC developments.

Overshadowing all rental subsidy programs is the potential for Congressional interven-tion. The risk associated with current eco-nomic conditions, as it always has been, is theoretically reflected in the capitalization rates that are extracted from arm’s length sales agreements.

Q are there any differ-ences in methodology based upon who is

ordering the appraisal (i.e. com-mercial banK, state housing finance agency, rural devel-opment, or a mortgage banK originating fha, fannie mae or freddie mac loans)?The appraiser’s “scope of work” will be outlined

by the client and agreed to by the appraiser as being complaint with the Uniform Standards of Appraisal Practice (USPAP); and this will determine the type of appraisal report (self-contained, summary, restricted use, etc.) and subsequently the valuation scenarios that will need to be prepared. Certain lenders such as HUD require specific forms to be completed within the appraisal report: some lenders (HUD MAP lenders) require the cost analy-sis be included; and some banks require insur-able replacement cost, or a land valuation to be included. An appraiser is capable of providing any number of values and of analyzing a prop-erty in any number of ways without violating USPAP. But the appraisal report must not be misleading. The reader must have a clear un-derstanding when a hypothetical condition is being used; or where an investment value is being provided rather than a market value. Today’s rules and regulations preclude the use


MC

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Mitchell MilnerandJoseph CaringellacongratulateGreat Lakes Capital Fund for its commitment to the development of housing for homeless veterans.

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the homeless, veterans, andother special needs groups.

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of appraisals by certain lenders if the appraiser was contracted directly by the borrower or de-veloper (i.e. the lender must hire the appraiser per FIRREA guidelines).

Q how do you handle situations where the property has siZable

reserves that can be conveyed to the purchaser? does this factor into the appraisal – or is it a separate negotiation be-tween the buyer and seller?Reserves accounts are rarely included in the appraisal – although operating reserve requirements do come into play. While the reserve accounts may be considered, they would fall into the “investment value” catego-ry and in a transfer, are typically considered separately – not within the valuation of the real estate. Reserve accounts may be part of

the overall negotiations between the buyer and seller; but don’t typically factor into the appraised value.

Q what factors come into play when you determine what the cap

rate should be for a property?The cap rates that we have been using range, of course, depending on the strength of the market and of the particulars of the prop-erty. There are numerous factors that come into play when choosing an overall cap rate. Appraisers look at sales comparables as well as current and proposed mortgage terms and equity returns. These can be utilized within the “band of investment” technique when estimating an overall rate. Terms are best derived from sales of similar proper-ties in the same or similar locations (which rarely exist); and so the appraiser searches

for the best sales data available, considering the comparability of location, other physical characteristics and economic characteristics. Additional information on cap rates can be extracted from investor surveys and other in-dustry publications, and from current mar-ket derived loan terms – but not property specific terms or special financing. Favorable financing may have value in and of itself, but it is not considered in the development of market value of the real estate. Valuing fa-vorable financing terms (i.e. RD properties) would be considered a value of intangible personal property (VIPP).

alan l. Johns, mai, cpm is president of apprais-

al advisory group, inc. he can be reached at

[email protected]. m.a.

allgeier, mai is a partner in allgeier company.

she can be reached at m.a.allgeier@allgeier-

company.com.


integrity & self respectby: anaya Johnson

I will keep my word in all I doNo lying, cheating or misleading youThe characteristics of those who careEnsuring that I will always be there

Getting things done, the best that I canRemember what I promised to each and every man

I will tell if there’s something I can’t doTruthfulness, reliability and honesty is the least that I owe You!

Staying positive when times are toughEnergizing your sprits, just trying to keep them up.

Loving yourself no matter whatForever healing your personal cuts

Realizing that you are greatElevating above all those who hate

Stabilizing all your hopes and dreamsPracticing for you, while going along with the team

Excited about the will God has for you, whileCreating an image that gets your approving nod

Through our eyes we take pride in being children of God!

alf through my eyesby: Jon l. greenawalt, sr.

oK, Jon’s not a student, but we liKe his poem!It’s not what the Vision is, it’s what it does

Who knew Dede’s dream would bring this buzz?She delivered the power of a compelling Mission,

Saw the potential for kids, and brought them her passion.With Cornerstone as the launch, by legions they cameNow ten years hence, what a difference they’ve made!What these young’ns have shown, there is no doubt

With the tools and support, and held to accountOvercoming the challenges and conquering their fears

Bringing out our laughs and the joy in our tearsOn they have marched, in education and careersThey inspire us all with their courage and drive

Many are here tonight, forever they’ll striveGiving back what was gained, like the bees to the hiveOur future assured with their spark and their buzzIt’s not what the vision is, for we know what it does.

LEADERSHIP INSIGHTSby denise stein, community leadershipgreat laKes capital fund

effectiVe leAdersHip

Regardless of your age, your position, your background, or your train-ing, true words of wisdom are hard to deny. This year, as the Art of Leadership Foundation celebrates yet another year of “Inspiring vision and leadership in young people, giving them the skills to succeed in their lives and to be leaders in the communities,” we are proud to pres-ent their insights on leadership.

In preparation for the celebration, we asked that our students write about their experiences with Art of Leadership, expressing how they view ALF “through their eyes.” Here are just a few of their many thoughts:

through my eyesby: winona flanagan

Blinded from dreams, ripping at the seemsNo hope at all, trying not to fall.Giving my all, feeling so small.

Knowing I have potential to do whatever I want.No one to lift me up,

but a lifestyle like this, I’ve had enough.Turned to ALF, and it’s made me stronger.Being in this program, I wish it was longer.

College is coming sooner then I think.Freshmen year went by in a blink

Hopes, dreams, and a wonderful ALF family.Building a foundation, and growing strong.

This is a place where I belong.My dreams are expanding.

Proud, I stay standing.Don’t want to go back to that place;

I’m winning this race.To success, I will be the best.

Trying to get everybody to follow my pathThanks to this class.

I’m going to be something big, be bigger than you thinkBecause this is the life I choose.

Through my eyes, my life will be the greatest.I’ll be able to stand tall “I MADE IT! ”


trustby ZaKia brewer

To have trust first you have to haveRespect that means have esteem and

Understand the people that are around you also haveSelf-Respect for yourself and the people you are with, you need to be a

Team together and have each other’s back all the time

As captain, I found it difficult to be a leader on my sports team. Art of Leadership helped me to understand the importance of having self-respect and respect for others. I learned to trust my teammate’s judgments and opinions. This provided my team-mates a level of comfort and allowed them to respect me as the captain of our team. I want to thank all my coaches and Art of Leadership staff that make this program possible. I don’t know what I would have done if it wasn’t for this program. Thank you Art of Leadership for helping me to become a better leader.

i can be a leaderby natayai collins

Although things begin to hurt you, because you’re in denial or painCome up and be strong about it, don’t begin to blame

Even though things look hard, forget that they are toughGood things do happen, happiness comes to diamonds in the rough

I have learned these things, just as good as many moreKind and becoming a leader, laughing when I come through the class door

Much love, ALF, I needed the things you taughtSo I can be a leader, performing in my own way and changing the way I thought

OVER 35 YEARS OF EXPERIENCE IN AFFORDABLE HOUSING

Representing developers and syndicators before the

Michigan State Housing Development Authority, U.S. Department of

Housing and Urban Development, Rural Housing

and municipalities, and with private lenders.

Karl L. Gotting

Kenneth W. Beall

Michael G. Oliva

Jeffrey L. Green

Eldonna M. Ruddock

Kevin J. Roragen

Richard W. Pennings

Ted S. Rozeboom

Tracey L. Lackman

Tamika A. Hale

124 W. Allegan, Suite 700

Lansing, Michigan 48933

Phone 517.482.2400

www.loomislaw.com

Upon first glance, you may find these words to be sweet, cute, even clever or charming, but there is so much more to be seen. Take a moment — yes, right now — and read them again. When you read through these poems this time, consider your own life, your position, your relationships…both professional and personal…and consider the impact that these thoughts and concepts would have on you and your colleagues, family, and friends, if you were to pursue them each and every day.

Each year, I introduce a radical concept to these amazing young folks...“you are NOT the leaders of tomorrow.” When I say this to them, I am met with many startled faces; after all, they have been told time after time that they are. We all know, however, that they are actually the leaders of TODAY! With the wisdom and insight that we read in their words above, it is easy to see that we, as “grown adults,” will benefit greatly from taking their simple advice in our work and in our lives.

Please take their words and put them to use; I promise that you will see a dramatic change in your relationships and in your effectiveness. I can tell you that I, for one, have been forever changed by them.

denise demers stein is the vice president of community leadership for

great laKes capital fund. she can be reached at [email protected].


WHAT DOES THE TITLE INDUSTRY DO?by steve smith, director, title servicesgreat laKes capital fund

t itle issues

Despite existing for well over 120 years, and issued in 49 states (Iowa being the loan excep-tion, but that is another story), title insurance remains a big mystery to many people. What does it do? What is it for? Why do I need it? These are questions that are asked by many consumers.

As with any insurance product, it would not be necessary if bad things never happened. Prop-erty insurance would not be a worthwhile com-modity if there was never a chance of damage being done to your home. A title policy would not be a sound purchase if all seller’s fully dis-closed how they encumbered the property dur-ing their ownership (the same way they noti-fied you about that wet spot in the basement?), if the owners of the property prior to them, and prior to them and on and on, all lined up, (if they were still alive) and let you know how they encumbered the property. If all contrac-tors fully paid all sub-contractors 100% of the time, there would be no need for a title policy. If a prospective owner never cared about what restrictive covenants may exist that would pre-vent their use and enjoyment of the property, there would be no need for title insurance. But, none of the aforementioned situations are re-alistic. All sellers are not forthcoming, all con-tractors do not pay their subs and many pur-chasers want to know how they are restricted from using their property.

Fundamentally, title insurance is intended to protect the insured from risks associated with defects in the ownership of the property they

have purchased. Or, if a lender, then it insures the priority of the mortgage that secures the debt of the borrower. The defects referred to can result in total losses of ownership, such as in the case of a defective foreclosures, forgery or impersonation, where the end result is no title was legally conveyed. Other defects can be partial in nature, such as where a neighbor’s garage or fence encroaches on the insured per-son’s property. In those cases, title insurance might pay for the removal or relocation of the encroachments.

In addition to providing insurance to its in-sured, title insurance products also provide information so that the consumer can make an educated decision prior to purchasing a piece of property. Or, for a lender, prior to lending money that is secured by a mortgage against the property. The insurance product will disclose such matters as easements and restrictions that the property is subject to.

Before agreeing to issue a policy a title in-surer will gather information that will help them make a decision on the insurability of the property. Just as a life insurance company would rely on actuary tables before issuing a life insurance policy, a title insurance com-pany will conduct its necessary research that involves reviewing the local property records.

A title examiner will create a “chain of title” for a designated period of time. The title ex-aminer checks to make sure that the chain of title is unbroken, meaning that each seller’s

ownership is evidenced by a deed or other documents showing how that seller obtained the ownership. They also consult other official records such as court judgments, bankrupt-cies, divorces, probate matters, tax sale fore-closures, water and sewer accounts (which are liens). They look at a current survey to review the property’s boundaries, to see whether any neighboring properties encroach on the prop-erty (or if the seller’s improvements encroach on someone else’s property.) A survey shows where public or private easements, such as power lines, may exist. They also look at front, side and back setback requirements.

Once the exam is completed the insurance company and the consumer now have a picture of the insurability of a piece of land. The com-pany can decide if it wants to insure the prop-erty, and if so, what potential risks to the title need to be remedied before it is insured. Upon satisfying certain matters that may be unac-ceptable risks, the policy can be issued. The consumer now has the backing of financially strong company to defend and insure their property rights. Without the title policy they would be on their own defending those rights.

The next time you wonder what a title policy and the title insurance industry do, know that without it, the products it issues and the ser-vices it offers, real estate transactions in this country would come to a screeching halt.

steve smith is with great laKes capital fund. he

can be reached at [email protected]


G l c f n e W s

NEW BOARD MEMBERSJim stretz and don tucker focused on expanding affordable housing projects

As the newest Great Lakes Capital Fund board members settle into their posts, they each stress the importance of Cap Fund’s mission to ex-pand vastly needed affordable housing projects.

Jim Stretz, 62, joined the board just under a year ago, bringing more than 25 years of ex-perience in national housing finance. He said he accepted the post because “it’s important to have an entity like GLCF to bring more capi-tal into the markets they serve — the hard to develop. “We wouldn’t need Cap Fund if more investors served the needs of the low to mod-erate income community,” he said.

Don Tucker, 65, who was appointed to the Cap Fund board in the Fall of 2011 after about a de-cade serving GLCF as a governmental relations and legal consultant, agreed that GLCF serves an important niche. He said that the public’s idea of the “American Dream” as home owner-ship not only misleads many who would likely benefit greatly from renting in an affordable community, but also results in a lack of atten-tion to the problem of sparse affordable hous-ing from most in the housing industry and in the public policy arena. “I have been interested in Cap Fund professionally for years because I believe that its mission is integrally impor-tant to the community it serves,” said Tucker, who serves as Of Counsel for Clark Hill PLC and whose many years of experience in hous-ing include an eight year stint as chair of the Michigan State Housing Development Board and another two years as a board member. “The concept of providing affordable housing is in-tensely important now more than ever given the national housing crisis,” he said.

While he is semi-retired, Tucker said he in-tends to remain active “in the fringe of politics” from the home he shares with Leslie, his wife of 18 years, in the Blue Ridge Mountains in

Landrum, South Carolina. But he also enjoys more traditional recreational pursuits such as golfing, reading and playing Bridge, along with spending time with his blended family of four children and six grandchildren.

Stretz, who has worked across the Southwest on projects from coast-to-coast, including with Cap Fund on several deals, has now set-tled back into his hometown in Denver, Colo-rado with Julie, his wife of 41 years, his two adult daughters and one grandchild. When he

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isn’t enjoying time with his family, he volun-teers for various non-profits, including at the local hospice group.

stretZ tucKer


eVents & HAppeninGs

MICHIGAN BENEFITS FROM HUNTINGTON

plus: mcdaniel receives high honorsand institutes leadership award


residents across michigan to benefit from $100 million huntington affordable housing commitmenthuntington’s commitment to

michigan is single-largest affordable

housing support announcement in

state history

Huntington Bank announced it is committing

$100 million to Michigan affordable rental

housing through 2015 through dedicated in-

vestments and financing. It is the biggest one-

time affordable housing commitment ever in

the state.

Huntington’s investment will provide ap-

proximately 3,000 new or refurbished af-

fordable housing units for more than 9,500

Michigan residents statewide in need of rea-

sonably priced, quality rental housing. And

it is expected to support 1,600 construction

jobs over the duration of the partnership.

glcf president/ceo receives high honorsMark McDaniel was honored to receive the

Bernice R. Bensen Service Award from Habi-

tat for Humanity Michigan, for his advocacy

and service to the organization. As a founding

board member, McDaniel helped established

Habitat Michigan in 1993 to provide services

to the 76 local affiliates serving families in

nearly every county throughout Michigan.

The Bernice R. Bensen Service Award was es-

tablished in 2001 to recognize an individual

who demonstrates an outstanding supportive

and leadership role on behalf of Habitat for

Humanity of Michigan.

“He is a founding member of Habitat Michi-

pictured l to r: Ken bensen, founder of habitat of michigan, marK mcdaniel, ceo/president, glcf, lt. governor brian calley and sandy pearson, executive director, habitat of michigan at the habitat awards dinner.

a higher return on experience.

A knowledgeable team of CPAs and specialists who are well-versed in low income housing tax credits, brownfield development, historic rehabilitation, and new markets tax credits investments is

Contact: Robert Edwards 517.336.7460plantemoran.com

{Questions answered.}


Over the next several years a significant number of

developments will reach the end of their compli-

ance periods. Some of the messages we are trying

to convey are: don’t wait — start planning now;

and if you are a lender, don’t adopt a strategy to deal

with dispositions one-by-one as they come along.

Instead, establish an overall strategy and develop

options now so when hundreds of these partner-

ships come along in the near future, you’ll be able to

handle them economically and efficiently.

The cover illustration attempts to depict the force

and impact of year 15 dispositions that are head-

ing our way. It’s not a time to ignore the signals

...continued from page 5

president’s message: the impact of year 15gan and has consistently and generously sup-

ported Habitat in its mission to serve families

in need of simple, decent affordable housing.

His faithful support over many years has

made a huge impact in our organization and

our ability to partner with more Michigan

families,” Pearson continued. “We are de-

lighted to present Mark with the Bernice R.

Bensen Service Award for outstanding service

to Habitat for Humanity of Michigan.”

art of leadership institutes the marK mcdaniel visionary leadership awardThe Detroit Institute of Arts hosted the Art

of Leadership’s 10th Anniversary Celebration

this month. ALF wanted to acknowledge an

Art of Leadership student for visionary lead-

ership, and when naming the award, Mark

McDaniel was the first person to come to

mind.

“Mark was the only choice,” Stein said. “He

challenged me to grow my mission greater

than I ever imagined—and has stuck by me

and this organization ever since.” Thus, the

Mark McDaniel Visionary Leadership Award

was instituted, was presented to Mark Mc-

Daniel this year, and will be presented to an

outstanding student leader in future years.

Two other awards were presented. The Jon

Greenawalt Courageous Coaching Award, and

the Clark Durant Vision Driven Award.

and keep flying straight into the mass; but, instead

to take planned and decisive action now in order

to avoid the pain of ignorance. I hope you find this

edition of Avenues to be helpful for your planning.

On another note, we have listened to all of you

and started to publish the magazine in printed

form again. For a while, we only provided it

electronically, but based upon the input from

our partners and advertisers, we are now pro-

viding both a printed and an electronic ver-

sion (through our website) so you can eas-

ily access previous editions as a reference and

have the ability to send it as a link to others

who you think would benefit from reading it.

I hope you are pleased with this decision.

neWs & eVents

by Karen bensen,closing coordinator,great laKes capital fund

One of the most memorable experiences on my “bucket list” happened earlier this year and knowing that Habitat for Humanity is near and dear to the GLCF family, I wanted to share my experience.

Our goal was to build three homes in My Tho Tien Giang Province, Vietnam. This was no easy feat. After six months of extensive plan-ning through conference calls, emails, newslet-ters, and phone calls we were prepared to board the flight that would take us on our journey.

As I boarded the plane, I realized my prep work wasn’t complete. So, prior to the doors shutting, I was frantically emailing my coun-terpart, Xuan in Vietnam on last minute de-tails, knowing that if we didn’t have our plans solidified, the build would not go smoothly. After three planes, twenty five hours of flying and five hours of layovers, I finally arrived at my destination. Over the next two days, volunteers continued to arrive. Our group of thirty people included fourteen Vietnam Veterans.

Not only were the volunteers arriving, but we also encountered a little storm named Ty-phoon Pakhar. Luckily, it diminished into a tropical storm prior to landfall, allowing our official build to begin on April 3.

As we walked to our destination, we encoun-tered thousands of stacked bricks and a huge pile of sand/gravel. We continued on for

about a quarter mile to the plots of land to be built on. We quickly realized all the houses were to be built in a location that was not only full sun, but a distance from the materials to build the dwellings.

Our first challenge was to move the brick and sand/gravel in temperatures reaching the high 90s in the shade and close to 100 percent hu-midity. We had to get used to the small wheel-barrows, as they were very low unlike the weight we were putting in them.

The key was to pace ourselves, stay hydrated with the water that we carried down the path every day, and eat the fruit the hotel packed.

Teamwork was the imperative. Someone would make a trip to the road for supplies and then rested while another person made the next trip. It was incredible to watch the activ-ity taking place on all the sites: Haulers, brick-layers, mixers and the “everything else people”.

To give you an idea of the difficulty of our build, one of our teammates made the com-ment, “to mix mortar or concrete it takes four volunteers and two Vietnamese”, because it was done by hand.

Our build took eight days to complete. I was in awe with how we were able to accomplish what we sent out to do. Each house consisted of four exterior walls, two interior walls, sub-

BUILDING HOMES &HEALING

VIETNAM VETERANSfloor, roof, septic tank, and the pad for the bathroom. Over the next month, the bath-room building, kitchen lean-to, and tile floor was installed. Three families are now settled in their new homes.

One of the most memorable and moving events on this trip was when we visited a Viet-namese Military Cemetery. It was powerful to watch as the Veterans stood in formation and saluted. In order, they approached the cast iron urn, placed three sticks of incense inside, saluted and went back to their places. When all were done they saluted again and broke formation. There was not a dry eye in the group.

Our mission was to build houses, but in real-ity we built three homes. As for the Vietnam Veterans, some had previously returned to Vietnam, some had not — none of them had been able to freely discuss what they had ex-perienced forty-years ago; however, through the build, they developed new friendships, a bond, if you will and now have each other to share their experiences with.

Our hope is to do this again next year to pro-vide the experience to more people, as there are more homes that need to be built and more Veterans that need healing.

Karen bensen is with great laKes capital fund.

she can be reached at [email protected].


PEOPLE • HOMES • PLACESThe Michigan State Housing Development Authority’s (MSHDA) vision in the 21st century is to improve the quality

of life for all Michigan residents and create vibrant communities by focusing on providing safe, affordable housing

through homeownership and rental programs; ending homelessness; and revitalizing neighborhoods and downtowns.

For information on MSHDA programs, visit the Web site at michigan.gov/mshda.

Equal Housing Lender 517.373.6840 • TTY 800.382.4568

AdVertiser’s indeX

Allgeier Company ................................................................................... 19

Applegate Thorne-Thomsen ................................................................. 17

Baker Tilly Virchow Krause, LLP........................................................... 2

Block Affordable Housing Consulting, LLC ....................................... 16

Blystone & Bailey, P.C. ........................................................................... 15

Chesapeake Community Advisors, Inc. ............................................... 20

Clark Hill ................................................................................................. 32

Community Economic Development Association of Michigan ........ 16

Crestline Communities ............................................................................ 9

Dauby O’Conner & Zaleski .................................................................. 10

Economides Incorporated Architects ................................................... 21

Gill Group, Inc. ......................................................................................... 4

Herman & Kittle Properties, Inc. ......................................................... 18

Huntington National Bank ................................................................... 12

Keystone Construction Corp ................................................................ 15

Lighten-Gale Group ............................................................................... 10

Loomis, Ewert, Parsley, Davis & Gotting, P.C ..................................... 23

McCartney & Company, P.C ................................................................... 9

Medallion Management, Inc. ................................................................. 19

Michigan State Housing Development Authority .............................. 30

Milner & Caringella, Inc. ....................................................................... 21

MHT Housing, Inc. ............................................................................... 31

O’Brien Construction Company, Inc. ................................................... 11

Plante Moran ........................................................................................... 27

St. James Capital ..................................................................................... 17

Vogt Santer Insights ............................................................................... 15

Wisconsin Partnership for Housing Development ............................ 25


Promises Made, Promises Kept.Syndicators and lenders will attest to our

rock solid reputation.

For more information, contact Krystal Covington248.833.0558

Great lakes capital fund1000 s. Washington, suite 200lansing, mi 48910www.capfund.net

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