|RE: COMPENSATION FOR EARLY INVESTMENT IN A COHO?||<– Date –> <– Thread –>|
|From: Eileen McCourt (emccourtmindspring.com)|
|Date: Wed, 14 Jul 2004 09:07:26 -0700 (PDT)|
At Oak Creek Commons, we gave double credit for the first 30K in investments, and 50% bonus for the next 20K, so if you put in 10K of the first 30K, you would be credited with $20,000 toward the purchase of your house. If you put in 5K of the next 20K, you received $7,500 credit toward the purchase of your home. This was intended to compensate for the highest level of risk at the outset of the project, when the land was under option, and we were still trying to raise enough money to purchase the property. There was a real risk that all of the early money would be lost. We also established a buy-in amt (5% of anticipated cost) and paid interest on any money invested in the project beyond the 5%. We ultimately raised $1.5 million from group members, including the 5% buy-in. Several members refinanced their homes, took money out of other investment vehicles, etc, for the initial purchase of the land. Interest rates were offered above market rate to compensate for the risk. Your situation might call for a reasonable level of profit sharing in the initial subdivision, also. Another thing that happened at Oak Creek is that some people were entitled to profit sharing AND interest based on the Streamlined Development Model that Wonderland Hill uses for project funding. These folks plowed their profit share back into the project so that we were able to offer one of our homes at a $150,000 discount to a qualified family, creating one permanent truly affordable home at Oak Creek. Eileen McCourt Oak Creek Commons Paso Robles, CA -----Original Message----- From: cohousing-l-bounces+emccourt=mindspring.com [at] cohousing.org [mailto:cohousing-l-bounces+emccourt=mindspring.com [at] cohousing.org] On Behalf Of Linda Gluck/Treehouse Sent: Wednesday, July 14, 2004 8:41 AM To: cohousing-l [at] cohousing.org Subject: [C-L]_ COMPENSATION FOR EARLY INVESTMENT IN A COHO? Our cohousing group has found land we want, but it is too expensive for us and larger than we need. We want to buy it, sell off three parcels, and keep the rest. The purchase price is high. Some of our members will be taking the risk - buying the property in the hopes that the parcels will sell at a good price, so their investment can be recouped. Those early investors are taking their money from their current investments, and putting it on the line in this real estate investment, as if they were developers. How should they be compensated? Thanks for your ideas, Linda Gluck Ulster County Cohousing _________________________________________________________________ Cohousing-L mailing list -- Unsubscribe, archives and other info at: http://www.cohousing.org/cohousing-L/
COMPENSATION FOR EARLY INVESTMENT IN A COHO? Linda Gluck/Treehouse, July 14 2004
- RE: COMPENSATION FOR EARLY INVESTMENT IN A COHO? Eileen McCourt, July 14 2004
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