RE: covering startup and infrastructure costs
From: Karen Schwalbe (
Date: Mon, 12 Jul 1999 11:51:01 -0500
Alchemy Farm, on Cape Cod, (MA) formed a corporation of shareholders whose
intent was to develop a cohousing community.  We intended to do a serviced
lot model where each member builds its own  house.  Each family/individual
bought a share for $10,000 (toward an expected $61,000 lot price) and bared
all their financial laundry to acquire a mortgage on the land.  Members who
could put in more money than the share price did so as a loan at 8%
interest.  We subdivided the land as a planned unit development into 13

The remaining infrastructure development was financed by selling the
existing farmhouse on the property (to a cohousing community member) as the
bank didn't think holding mortgages on the eight unsold properties was
secure enough to extend more money to the project.

We were able to do this over a five year period, as we had paying tenants in
existing buildings on the property that covered mortgage, insurance,
utilities, etc.  It gave us a bit of breathing room in the design process.

I have to second Rob Sandelins comments regarding documenting money spent
and tax consequences.  Get a good tax accountant (costing us between
$600-$1000/yr) and make sure they understand what you are doing.  It got
especially confusing as we became a neighborhood association from a
development corporation.

Karen Schwalbe
Alchemy Farm Cohousing
Hatchville, Massachusetts

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