Re: Financing site purchase, Part I
From: Fred H. Olson (fholsoncohousing.org)
Date: Tue, 23 Feb 1999 16:51:44 -0600
Judy Baxter, Monterey Cohousing Community, baxter [at] epivax.epi.umn.edu
is the author of the message below but due to a problem it was posted
by the Fred the list manager: owner-cohousing-L [at] cohousing.org
--------------------  FORWARDED MESSAGE FOLLOWS --------------------

Lots of questions - I'll try to answer a few as I can find time and hands,
since I suspect we are one of the few groups who have done this - i know there
are others.

<<Greetings all.  We are in the early stages of forming a group (check out
www.arcadia-farm.org for more info).  I'm looking for information from
groups who purchased land with an existing house on it (in our case, it'll
be used as the common house).  How did you finance your initial
purchase?>>

        We bought a building to use roughly half as Common House, half with 8
coop apts.  It's a long story - we spent about 8 months hoping another buyer's
deal would fall through, it looked good, then 4 months later we had 6 weeks to
put it all together.  Somehow, we did have 8 households ready to buy, tho one
was buying as an interim measure till we could build the townhouses.  So about
80% of the down payment came from those 8 hh, the rest came as loans from
members planning to buy townhomes.  We financed the whole building and land as
a coop.

<<How many families were involved at the time, vs. how many now?  Did taking
the initial risk translate into any financial benefit for the founders down the
line? How did you make this "fair?">>

I think 12 households then, 15 households now.  No benefit for the founders, I
guess it *isn't* fair, but we didn't want to make things any more expensive for
the rest of the community.  I suppose we could have been more fair, but then I
suspect i wouldn't be living in cohousing -- i.e. i don't think we would have
gotten a construction loan. or had a community.

<Did  your sellers carry a contract for all or part of it?  What were the terms?
        No

If you worked with a conventional lender, who was it and what would or wouldn't
you recommend about going with them in the future?
        N/A

Did you have some members live in the existing house, at least temporarily?  How
did you pro-rate who paid what on the land mortgage?
        We moved in over the next 2 months, and lived with the rehab for the
next 3-4 years.  Pretty amazing.

Did you have a problem with getting your land lender to have a subordination
agreement (whereby the original land loan becomes subordinate to people's
individual unit mortgages?
        not sure how it works, not on legal team

Hope this helps - guess it was simpler than I thought.

Judy

Judy Baxter, Monterey Cohousing Community,(MoCoCo) Twin Cities Area, Mpls.,MN
-- e-mail:      baxter [at] epivax.epi.umn.edu
        (usually checked on Monday, Tuesday, and Friday)
15 homes - 7 new townhomes plus 
        8 coop apartments               in a rehab Georgian building
(built as a retirement home in 1924 -) which also serves as our Common House
----------------------------------------------------------------------
Two 3 BR townhomes  for sale - see our web page
----------------------------------------------------------------------
 Voice Mail for Monterey Cohousing - 612-930-7554
 web page: http://www.jimn.org/mococo/ 


  • (no other messages in thread)

Results generated by Tiger Technologies Web hosting using MHonArc.