Scattered Site Rental Toolkit:

Business Planning for Development & Management










C. SSR Business Planning Overview:Key Questions You Must Answer


Mission and Goals

Why are you entering into SSR?

1.    Does SSR fit well with your existing mission and goals?

2.    Will your board, neighborhood, and funders see SSR as a good fit?



Know your market and let it drive strategy and design

1.    What kind of market are you operating within?

2.    Is there a shortage of affordable housing or a need for stabilization?

3.    How do local preferences, needs and trends shape unit designs?

4.    Are you locating units in a market thatís experiencing complete failure?

5.    Are other investments occurring near your units?



Whom do you seek to serve?What do they need and want?

1.    What is your target tenant profile?

2.    How can you attract excellent tenants?

3.    What services are needed to help tenants keep their housing?



Where and How will you Build?

1.    Achieve Scale: Varies for organization and market.

2.    Cluster Units to make development and management easier:

What units will attract your target renters?

1.    Rehab/build to a home purchase standard with standardized construction specifications.

2.    Units must attracts quality tenants and contribute to stabilization


How will you pay for development?

1.    Conventional multifamily underwriting often isnít appropriate for SSR

2.    Think in terms of what is in the best interest of the block and neighborhood.

3.    Negotiate a developer fee of 8 to 12 percent.

4.    Offer funders additional detail to justify higher subsidy needs.

How will you pay for operations?

1.    Avoid debt to keep positive cash flow and sufficient reserves.

2.    Negotiate an adequate management fee to professionally manage.

3.    Maximize contributions to operating and replacement reserves.

4.    Plan on more expensive maintenance.

5.    Pursue real estate tax abatements wherever possible.


How will you cultivate organizational capacity to manage the property?

1.    Before you take on property management, budget how much it will cost to staff operations or hire a third party manager. Will the revenue cover all staff and operating costs and provide for a general management fee?

2.    If you donít have in-house management capacity, how will you engage it?


How will you manage your portfolio as a long-term asset?

1.    Allocate more time and resources to management than anticipated.

2.    Establish detailed tracking systems, standard operating procedures and sufficient staff.

3.    Embrace property and asset management as a new line of business. It is an important community service unto itself.

4.    If a property/project fails, what is your strategy for ďexitingĒ without harming residents, the neighborhood, or your organizationís reputation?


Next:I.D. Tips for Making the Conceptual Sale