|INVESTMENT THRESHOLDS ETC.,||<– Date –> <– Thread –>|
|From: Gary Kent (garykentuniserve.com)|
|Date: Wed, 4 Aug 2004 19:22:59 -0700 (PDT)|
From: Stacia Leech, Roberts Creek Cohousing, B.C. Canada. We also had to purchase an extra property and sell it off. In our case it was to obtain the only access point to our twenty acres. Unfortunately we were unable to sell for a profit, partly due to the fact that the property we bought and sold ran up the western boundary line of our twenty acres and we decided to put a 4 metre no tree cutting covenant on the land to protect our exposure to development. - In handling upfront costs, what was the minimum investment each household had to make? Did you have to ante up for the land, infrastructure prior to construction loan and soft costs like professionals? A. We required equity member households to make an non refundable, non interest bearing investment of $7,500 CND. Members who could invest more than the minimum were paid 15% interest on amounts over and above $7,500. When we approached the bank to purchase the properties we had about eleven equity members some of whom had invested up to $120,000 CND at that point. - Did all households have to contribute the same amount? A. In order to be considered an equity member and get in line for the lot of your choice we required a minimum of $7,500. Another important distinction we made was that only equity members (with at least the min investment) were allowed to red card decisions. - What minimum amount of $(or % of total loan) was necessary to demonstrate good faith of households to bank? From bank's point of view, were all households required to kick in? A. We had a similar set up to New View Cohousing with the bank requiring 25% equity from members for the land purchase mortgage. Then for the construction loan (approx. 4.5 million) we were also required to have 25% equity plus 60% (of thirty one homes) sold. We were also required by the bank to sign legal documents stating that we had obtained independent legal advice informing us that we were all jointly and individually responsible for the loan. We also required equity members to sign 'creative' purchase and sale agreements that state the purchase cost of the home with the proviso that it could go up or down. The percentage of up or down is based on the percentage of the total project value that our home represents. I just have to say that I really resonated with Jim's statement: "I keep waiting for the traumatic amnesia to kick in so that I can forget these details, but there it is, burned in to some part of the cortex, ready to spill out at the touch of a question." Having been one of the pioneers of the Roberts Creek Project and being the focus person of the Legal Finance cttee., for four years I can relate. Cheers, Stacia. Stacia Leech Co focus, Legal Finance Cttee., Roberts Creek Cohousing B.C. Canada. www.cohousing.ca/robertscreek
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