April 2014 cic DEVELOPMENTS. Recipient of the 2012 MacArthur Award for Creative and Effective Institutions

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1 April 2014 cic Community Investment Corporation Chicagoland s Leading Multifamily Rehab Lender DEVELOPMENTS Recipient of the 2012 MacArthur Award for Creative and Effective Institutions Property Management Training: A recipe for success IN FY2013 ALONE, CIC CONDUCTED 78 TRAINING SESSIONS ATTENDED BY 1,852 CURRENT AND PROSPECTIVE MANAGERS/OWNERS OF AFFORDABLE HOUSING. Taft West Director of Property Management Training From the time that CIC began its multifamily lending program in 1984, it soon became evident that wellmanaged properties tended to be successful. Acting on that observation, CIC launched its Property Management Training program in Property Management Training (PMT) teaches owners and landlords how to better manage, market and maintain their properties. Since its creation by the late Larry McCarthy, the program s centerpiece has been the four-evening, 12-hour course entitled Basics of Residential Property Management. Alternatively, single all-day (usually Saturday) classes are scheduled from 9:00 a.m. to 5:00 p.m., covering core topics for those who cannot commit to four consecutive evenings. Every PMT participant receives a detailed procedures manual describing best practices in property management and building maintenance as well as a certificate upon completion of the course. Typically, two of the following topics are taught per night in the four-session version of the class: marketing and tenant selection; routine and preventive maintenance; fair housing laws; eviction laws; other laws governing residential rental property; real estate taxation; housing choice vouchers (Section 8); and dispute resolution. The program also offers seasonal three-hour single-topic sessions, such as boiler repairs in the fall and landscaping in spring. Under Taft West, the current director of property management training, the number of classes and participants have both increased dramatically. In FY2013 alone, CIC conducted 78 training sessions attended by 1,852 current and prospective managers/ owners of affordable housing. Since its inception, PMT has provided training to more than 12,500 owners and managers of apartments throughout the Chicago area, with no foreseeable drop in demand expected. In the last two years, it has devoted special attention to helping landlords succeed in the midst of a very challenging economy. 222 South Riverside Plaza, Suite 2200 Chicago, IL

2 Participant Feedback... Thank you for the great training seminar yesterday. It was invaluable. And you were right you predicted a fun session and wow, did you deliver! Our full day with you flew by. Your speakers were fabulous; obviously, experts in their fields. Not only were you informative, but the real-life experiences you shared with us put the information into an even clearer perspective. I could have listened to your stories for hours! The property management program you led last week was amazing. I learned more than I could have ever expected, and want to thank you for the variety of topics and highly-informed speakers. At a class held last year, a North Loop insurance agency owner said that he had been inspired by CIC s training to realize his true passion. He sold his insurance business, purchased several buildings, and pursued the development of affordable housing, hiring area residents as partners to work with him and to learn management skills. The success of the program has inspired several productive partnerships with other local institutions: CIC was asked by the Chicago Housing Authority (CHA) to be a training partner in its new Owner Excellence Program. Owners whom the CHA selects for their already promising performance spend several days learning the details of how the Housing Choice Voucher Program [formerly known as Section 8] works; they then are required to take the CIC four-evening, 12-hour course. In return these landlords receive longer subsidy payments for vacancies and can self-certify their units. During 2013, CIC trained more than 300 attendees at nine CHA landlord sessions. For the last few years, CIC has regularly offered a dedicated version of Property Management Training to the membership of the Chicago Association of Realtors at their downtown office. This relationship also increases awareness of CIC s lending products among a targeted population. CIC also works in cooperation with the Chicago Alternative Policing Strategy (CAPS), Department of Buildings and the Department of Law/ Troubled Buildings Unit to teach landlords best business practices in property management. During 2013, CIC hosted 16 sessions for over 400 landlords at City Hall and in Police District community rooms. The usual fee of $50 for the four-evening or full-day courses does not begin to cover the full cost of the training. CIC is committed to supporting the program, and substantial funding also comes from the City of Chicago Department of Housing and Economic Development as well as a number of CIC bank investors: JPMorgan Chase Citibank BMO Harris NA The Northern Trust MB Financial PNC Bank Cole Taylor Bank Wintrust Financial Group Charter One US Bank The PrivateBank Urban Partnership Bank Bank of America In addition to leading all these training sessions, Taft West writes a regular column in the CIC newsletter and last year answered over 1,800 requests for assistance that come directly to CIC or through the City of Chicago s 311 hotline from landlords and building managers. It was no surprise that Taft was named 2013 Educator of the Year by the Illinois Association of Real Estate Educators in recognition of his outstanding dedication to real estate education. PROPERTY MANAGEMENT TRAINING UPCOMING SESSIONS Thurs, 9am-5pm Mon-Thurs, 6-9pm Mon-Thurs, 6-9pm MAY 8 MAY JUNE 2-5 CHA Historic Pullman Albany Park Headquarters Visitor Center Community Center 60 East Van Buren S. Cottage Grove 1945 W. Wilson Chicago Chicago Chicago FOR INFORMATION OR TO REGISTER CIC DEVELOPMENTS

3 cic and StreetWise make a good team Now and then you may buy an issue of StreetWise, a newspaper sold throughout the Chicago area by street vendors who either are homeless or trying to avoid becoming so. Once a month, CIC places a full-page color ad on the back page of StreetWise to promote our loan products and Property Management Training as well as to support an important social enterprise. StreetWise is among the largest street papers in the United States, serving as a model across the country. By engaging the unemployed and underemployed as vendors, StreetWise provides them with a viable income opportunity. The StreetWise organization also offers social services and financial literacy education to help vendors achieve personal and financial stability. The relationship between StreetWise and CIC goes back to Anthony Oliver, thenexecutive director of StreetWise, approached CIC with a proposal to make CIC one of the newspaper s first advertisers in a new section STREETWISE dedicated to affordable housing. CIC President John Pritscher liked the idea, but he thought of it more as a donation than a marketing tactic. The format of the CIC ad changed over the first few years from a narrative-heavy infomercial style to a crisper half-page graphic design. In 2009, CIC began its present run of monthly full-page ads on the back cover, and the original intangible rewards of knowing CIC was supporting a good cause were complemented by business rewards, too: potential customers began inquiring about CIC loan programs and Property Management Training. What began as an attempt to be charitable has blossomed into a good business decision, said Marty Berg, CIC director of marketing and communications. We have found that the prominence of our ad on the back of StreetWise brings us calls from people who may miss our other advertising outlets. It s good for us and good for StreetWise and its clients. The CIC-StreetWise connection also worked out for Anthony Oliver, the StreetWise leader who originally sold CIC on the value of StreetWise as an advocate for the alleviation of poverty in the community. Oliver then became sold on the value of CIC, and he has preserved a number of affordable multifamily buildings of his own through CIC financing for acquisition, rehab, and Energy Savers improvements. To find out more about StreetWise, visit Anthony Oliver is in front of his building in North Lawndale at 1256 N. Independence. What began as an attempt to be charitable has blossomed into a good business decision. Marty Berg CIC DEVELOPMENTS 3

4 cic profile: JOHN BRAUC With cic, the personal touch counts How did you get into this business? It s a long story. I had my first introduction to multifamily when I was very young. My parents purchased an 18-unit apartment building that we lived in. I remember helping my dad shovel coal into the furnace. Unfortunately, a few years later my parents sold the building, which was a shame because now I see the true power of holding assets for long periods of time. When I was in high school my mom purchased a 5-unit building with a storefront that she used for her beauty shop (and guess who had to help fix things all the time!). I started in the business when my father passed, and he left me $40,000. I did not want to waste it on a car well I did want a new car but I wanted to put the money to good use, so I purchased my first apartment building. It was a 9-unit that I still own today. How did you become aware of cic? I was introduced to CIC when I purchased my first building on the South Side of Chicago. The building was coming out of receivership, and the receiver was erecting new porches but I needed to find out who was going to pay for them. That s when I met Angela Maurello, who was very helpful walking me through the process and also discussed what CIC is all about and the rest is history. I have worked with CIC ever since. What s your favorite part of working with CIC? First and foremost, it s the people, the personal touch, being able to talk to the person you need to, and the ability to make a deal work when most other banks won t touch it. CIC was lending to me through the hard times, like a few years ago when very few, if any, banks were lending, especially on the South Side. What do you see on the horizon for multifamily and/or affordable housing? In the last few years, bigger players and foreign investors have begun buying up the 20- to 40-unit apartment buildings on the South and North Sides, which is great for the most part. I believe it will help stabilize the South Side as long as the investors stay in the game and will also drive up prices. On the North Side prices have increased to precrash levels without the condo conversion end play or maybe that s in the future and they are very forward thinkers. When I was in my 20s and wasn t worried about returns that was fine, but these days it s all about the numbers. John Brauc CIC Borrower Community Investment Corporation has the ability to make a deal work when most other banks won t touch it. What is something interesting about you that most people don t know? I m pretty much an open book, but I am a 5th degree black belt and competed in full contact kickboxing and full contact Kali-Eskrima, which is a stick and knife martial arts from the Philippines. I have taught martial arts for over 20 years. I have also been lucky enough to speak about multifamily to groups as large as 600 people throughout the USA and South Africa. CIC DEVELOPMENTS 4

5 Winter ends, energy savings begin What has been one of the most stressful winters in recent memory has brought utility bills far in excess of what we are used to paying. While we can t do anything about the weather, we can control the pain of utility costs for our properties, and it will be easier to make changes now that the battle with snow and ice is over. Some improvements literally can pay for themselves in a short time through reduced utility bills. Such changes include but are not limited to: Air sealing Attic or roof cavity insulation Boiler controls or programmable thermostats Energy Star lighting fixtures Duct sealing and insulation Common area lighting CIC and its partner Elevate Energy (formerly known as CNT Energy) provide building owners a solution to these challenges the Energy Savers program. Energy Savers is available for multifamily properties in the cities of Chicago and Rockford, as well as in the seven metropolitan counties of Cook, DuPage, Kane, Kendall, Lake, McHenry, and Will. Elevate Energy offers a no-cost, no-obligation energy assessment/audit of the building along with a detailed report and recommendations for retrofitting the building, projected energy savings that will result from the retrofit, and two years of ongoing energy monitoring of the building. CIC offers a low-cost Energy Savers loan to pay for the retrofit (currently at a 3% fixed-rate, fully amortizing for terms of 7 years). The loans have no prepayment penalty and are secured by Jim Wheaton Manager, CIC Energy Savers Fund a subordinate mortgage. A borrower can finance all of the retrofit recommendations from the energy assessment/audit, as well as other energyrelated improvements. Energy Savers loans may be combined with other CIC loan products for acquisition/rehab, refinance, or refinance/rehab of multifamily properties. While Energy Savers participants typically follow the recommendations from their energy audit, more sophisticated energy retrofit measures, such as solar panels, can be financed as well. Owners who have retrofitted their buildings average 30% savings on their utility bills, with savings in some cases as high as 45%. The CIC/Elevate Energy partnership has gained a national reputation as the most successful multifamily program of its kind. More than 17,500 apartments in 429 buildings have been retrofitted through Energy Savers and carbon emissions from those buildings have been reduced by more than 32,700 metric tons. CIC has provided more than $15 million in financing to help in these retrofits. Property owners in the Energy Savers counties and cities can order the no-cost, no-obligation Energy Assessment/Audit by going to www. elevateenergy.org/energy-savers or by calling For owners considering CIC Energy Savers financing, information can be found on the CIC website or by calling Jim Wheaton at CIC DEVELOPMENTS 5

6 cic Corporation 222 South Riverside Plaza, Suite 2200 Chicago, IL Community Investment Non-Profit Org. U.S. Postage PAID Chicago, IL Permit No What s Inside April 2014 PMT: A recipe for success page 1 cic, StreetWise make a good team page 3 cic profile of John Brauc page 4 Winter ends, energy savings begin page 5 Farewell and thanks, Anita! After 44 years in the affordable rental housing finance industry, I am retiring. My 19 years at CIC have been the most rewarding of my career. It has been an honor and a pleasure to work for this great and worthwhile company. Its mission and dedicated staff are a Chicago treasure. With those words, CIC Senior Loan Officer Anita Bundze delivered the news that her fellow workers and clients hoped would not come so soon. This Detroit native has been a wonderful, friendly, knowledgeable professional who has touched many people over her nearly two decades with CIC. Her last day was April 4, and she will be missed. Bon Voyage, Anita! Contact cic for all your multifamily financing needs! Mortgages for Acquisition and Rehab NEW Lower Rates for Less/No Rehab NEW 1-4 Unit Program Buildings For Sale Call a cic Loan Officer for details