This project was developed by the current owner, Winton Woods Phase 2 Associates AWLP (Shelter Resources Inc. + Limited
partners) back in 1995. This project was originally financed as an affordable rental complex with affordable housing tax credits
(LIHTC) reserved for the project by the Washington State Housing Finance Commission. These credits were sold to limited partner
investors to raise equity for the development and then these funds were combined with a smaller soft loan (below market interest)
provided by the Kitsap County Dept. of Community Development, and a conventional 1st position mortgage loan. There was no direct
loans or subsidy provided by the Federal Government as was the case with Winton Woods 1. Along with the benefits provided by the
tax credits and the Kitsap County soft loan came certain obligations (Regulatory Agreements) by ownership to keep the project as an
affordable project for an extended period (37 years, through year 2032). This means that there are both income restrictions on who is
eligible to rent these apartments, and also a restriction on the rent levels that can be charged during this period. These restrictions are
clearly laid out in the afore mentioned Regulatory Agreements which will be made available to prospective Purchasers. Upon review
Purchaser’s will discover that the prospective rents shown in our pro forma forecast are lower than those shown for the phase 1
project, and that is due to the rental rate restrictions imposed by the Housing Commission (WSHFC) Tax Credit Regulatory Agreement.
Likewise the operating expenses are slightly higher, due to the need to adhere to certain program compliance and reporting obligations
and perform an annual audit to confirm operations to the Regulatory bodies. As a result the Net Operating Income of the Winton
Woods 2 phase is lower and the resulting asking price is considerably lower than phase 1 @ $4,400,000 or $102,326 per unit.
Purchasers should note that the rent levels dictated by the Affordable Housing Tax Credit are considerably below market, and as such
will assure high occupancy for the duration of ownership.
Phase 1 and Phase 2 to be Sold as a “Package”:
While Winton Woods 1 and Winton Woods 2 are owned by separate and distinct Limited Partnership entities, ownership’s current
position is that the two complexes be sold together and the physical plants are best operated in conjunction with one another.
Landscaping and maintenance are currently shared expenses, the management office is physically located on the Winton Woods 2 side
of the project ( actually services tenancy in both of the phases) and the access drive Winton Lane, accesses both complexes via
separate driveways. This also enables Purchasers to accumulate a greater number of units and affect certain economies of scale in
project operations. While accounting functions will need to be collected and reported independently due to the Phase 2 Regulatory
obligations under the tax credit program, project operations are best addressed both physically and economically with common
ownership. At this time we will not be accepting offers for anything but both properties simultaneously. We will work with the
Purchaser to obtain the necessary approvals for ownership transfer from any Regulatory Agencies that have oversight authority.
Unit Mix & Projected Market Rents (Under Tax Credit Program):
3 - 1 bdrm 1 bath units (50% X median) @ 675 sq ft - current rent restriction/Kitsap County after utility allowance @ $717 ($58
4 - 1 bdrm 1 bath units (60% X median) @ 675 sq ft - current rent restriction/Kitsap County after utility allowance @ $872 ($58
10 - 2 bdrm 1 bath units (50% X median) @ 905 sq ft - current rent restriction/Kitsap County after utility allowance @ $854
17 - 2 bdrm 1 bath units (60% X median) @ 905 sq ft - current rent restriction/Kitsap County after utility allowance @ $1,040
4 - 3 bdrm 1.5 bath units (50% X median) @ 1072 sq ft - current rent restriction/Kitsap County after utility allowance @ $980
5 - 3 bdrm 1.5 bath units (60% X median) @ 1072 sq ft - current rent restriction/Kitsap County after utility allowance @ $1,195
43 Total Units in 10 Buildings
Project Operating Expenses (Historical):
This project has experienced annual operating expenses of $227,377/year in 2015, $236,774/year in 2016, $222,117/year in 2017 or an
average of $5,319 per unit per year or $228,756 annually. We have projected expenses going forward after purchase in operating year
2018 at $233,103. These calculate out slightly higher than that projected for phase 1 due to slight cost differences in auditing expense,
assumed sharing in project maintenance, and higher replacement reserves scheduled in the budget.
Property Physical Condition:
The property has been well maintained in accordance with requirements of the Regulatory Agencies (Wash. State Housing Finance
Commission and Kitsap Community Development Dept.) and standard management practices. The project has provided new roofing as
needed, significantly patching and re-roofing 6 buildings in 2014, and 2 buildings this summer (2018). 2 additional buildings are being
scheduled for repairs in the short term this year. This purchase as dictated by the Purchase & Sale Agreement will be an “As Is” sale
wherein the Purchaser has full rights to inspect the subject property during the designated “feasibility period”, but no re-trading on the
purchase price is anticipated.
Address: 20043 Winton Lane NW, Poulsbo, Wash.
The subject property is an extension of the Phase 1, Winton Woods 1 property lying adjacent to the North. The site is surrounded by
large evergreen trees providing privacy and shade. Local schools and shopping conveniences are located in close proximity to both
project phases, yet their seclusion off of the main traffic right-of-way on Winton Lane provides a safer environment for children.
Approval of Purchaser (Entity):
Since the property operates under a Regulatory Agreement recorded on Title by the Washington State Housing Finance Commission
(WSHFC) in Seattle, the new purchaser (incl. members of purchaser entity) will need to be approved by WSHFC. A copy of the
WSHFC Chapter 9 Property Transfers approval process is attached.