|split equity||<– Date –> <– Thread –>|
|From: Kate Taylor (katetihug.co.nz)|
|Date: Tue, 25 Aug 1998 17:43:28 -0500|
Hi, I belong to a New Zealand intentional community founded back in 1971. The properties are all owned by a the collective and residents pay a mixture of cash-rental and sweat-rental. We are looking at expanding and perhaps moving to some sort of buy-in situation, as we believe it may create greater stability of membership over time. It would also add to the total amount of finance we can raise. Most people who live here now - or are likely to live here in the future -are in the bottom income quadrant so they're unlikely to be able to raise the full cost of an apartment. Is it possible to have a split equity, with say the collective owning a 70% share and the resident a 30% share (the proportion staying constant despite rising or falling valuations). Does anyone have experience of this situation? Will banks loan on a partial equity situation? What are the pitfalls? Is there a literature on such schemes? I realise the New Zealand situation/laws may vary but if we can start with some overseas imput it may give us a base to work from. Thanks to anyone who can be of help. Dave Welch Chippenham Community, Christchurch NZ
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