|RE: Inticement||<– Date –> <– Thread –>|
|From: Eileen McCourt (emccourtcharter.net)|
|Date: Sun, 29 Jan 2006 14:59:06 -0800 (PST)|
At Oak Creek Commons, we offered purchase credits for the very first investors up to 75K. So, if someone put in 10K at the very beginning, they received 20K of credit toward the purchase of their home for the first 50K into the project; then there were one and a half credits for the next 25K, so 10K would result in 15K toward their home purchase. The additional credit was only toward the purchase of a home at OCC. Everyone except one of the eight who received these credits ultimately did buy a home at OCC. We also offered interest terms to everyone for any investment amount above $2,500 after the first 75K was obtained. Eventually the threshold for a loan to the community was any amount above 5% of the expected home price (the first 5% did not accrue any interest, though looking back, I think maybe it should have and we should have held the buy-in to $2,500). The loan interest rate was above market by about 4 points, and was adjusted down for incoming investments as the rates went down. We beat the bushes for investors and people used a variety of assets: a 401Ks, an equity line of credit on a current house, refinancing a current home, liquidating stocks (just before the dot.bomb meltdown, luckily for them) and so on. We also had some money from relatives that was invested independently (not used toward the purchase of a home). Eventually, the first 22 or so families of 36 total received about a 2.5% discount off the final selling price in the last 6-9 months. Those coming in at the end paid full price. The home prices went up several times during the project, but only the last increase was not passed on to current members. We used the pending increases as a marketing tool to encourage people to commit in the final phase before construction started. We raised about 1.1 million from the group this way, or slightly more than 10% of the cost of the project. After we partnered with a developer, we obtained additional investments from the group on a purely speculative basis (the money invested would not be available toward the purchase of their home but had to stay in the project until all homes were sold). We developed a very creative affordability program with some of the proceeds from this last round of investments within the group. Eileen McCourt Oak Creek Commons Paso Robles, CA www.oakcreekcommons.org -----Original Message----- From: Tim Clark [mailto:TimClark [at] 2feetunder.com] Sent: Saturday, January 28, 2006 12:52 PM To: cohousing-l [at] cohousing.org Subject: [C-L]_ Inticement We would like to hear what other communities did to entice people to buy in early. Like: Selection of unit based on date of becoming an equity member. Graduated discounts on buy price. Help please! Tim Central Austin Cohousing _________________________________________________________________ Cohousing-L mailing list -- Unsubscribe, archives and other info at: http://www.cohousing.org/cohousing-L/
Inticement Tim Clark, January 28 2006
- RE: Inticement Eileen McCourt, January 29 2006
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