|Lot development, coho financing||<– Date –> <– Thread –>|
|From: Sherri Rosenthal (enocommonscompuserve.com)|
|Date: Wed, 2 Dec 1998 07:59:13 -0600|
Rob commented that it can be hard to finance cohousing. I pitched Eno Commons to three banks, and had two offers to provide the construction financing. While I'm sure there are some areas where "cohousing" is difficult to finance, I find myself wondering if some of the problem isn't also due to the mistakes of inexperience in not structuring a project in more easily financed ways. I think there are things that can be done to make our projects stronger, and also make them more easily bankable. It helps to have someone on your development or consultant team that knows how to do this kind of structuring and how to talk to bankers. On another topic: The "lot development model" is sometimes spoken of as if there is one animal by that name. There are actually a number of variations on the theme. The main drawbacks of a "pure" lot development model--by which I mean that lots are sold individually, and each household then chooses its own home design and builder, include: * Mish mash of building styles * No shared goals or priorities for the homes * Potentially long build out time before the neighborhood is "complete" * Expensive end costs for each household, since each home is probably one of a kind There are, however, ways of compensating for these downsides, and of having a modified lot development structure. The big benefits of the lot development model is that each household obtains its own financing to build its own home, which greatly reduces the risk for the development entity, and also tends to cut down on overall development interest costs. Best, Sherri Zann Rosenthal Eno Commons Cohousing Which became sold out about two months ago, and where eight of our 22 households now live on site.
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