Re: Financial structure advice needed for forming group
From: Sharon Villines (
Date: Sat, 25 Nov 2006 10:54:52 -0800 (PST)

On Nov 25, 2006, at 1:26 PM, Tom Hammer wrote:

Since we have so few "full" equity members at this
point, the two-tiered system puts a huge financial
burden on those who have to meet calls.

I guess I don't understand why those families with homes do not have to put in the cash now, even if it means borrowing against their homes. Either they are in or they are out. Requiring only one group of people to assume the risk is setting a precedent that could come back to haunt you. Either people are equal or they aren't.

On the other hand if a small group is carrying the risk, they should get a return on their money for doing so. An interest payment, a lower price on their home, etc. I would talk to a developer about how they handle this. A developer basically gets paid out of the sale of the homes so all costs, including the return on their money that is tied up in the project and payment for their time, has to be factored into the cost of the homes.

I think a group can facilitate helpful financial arrangements but expectations established before move-in will carry over to post move-in. Is this how you expect the community to run? Some pay and some don't? Households with small kids have different expectations than others? Think carefully about this.

Sharon Villines

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