Re: 50% rate of return | <– Date –> <– Thread –> |
From: Lynn Nadeau (welcomeolympus.net) | |
Date: Fri, 21 Apr 2000 21:04:03 -0600 (MDT) |
If I hear you right, our first 10 households, which put in $10,000 each prior to our actually having lots to have title to, would have generated a debt to the group of $50,000. A debt that could be "paid" in various ways. If it went to reducing their buy-in price, that would mean that the other, last, ten families would each have their buy-in price raised by $5000. Or we could have taken $50,000 out of what was available for building a common house-- a nearly 20% budget cut from a budget which is already snug. Or count on selling two more lots, with a resulting reduction in common land space (and two more families to have room for in the common house). This seems counter-productive. Sure, one could invest one's money instead of risking it. But people who are trying to build cohousing are typically willing to put in amazing amounts of time and money, because they want it to happen. If speculating in cohousing projects could realistically be counted on to bring a 50% return, we'd have megabucks pouring in, all over the country. I'd send you a loan, myself. Truth is, it costs-- both time and money. This same line of thought could lead to the conclusion that, just as people could be getting interest and dividends on their money in the stock market instead, so, too, could they be getting paid $5-$10-$50-$150 per hour for their time, instead of donating that. It really isn't rational to donate massive time and money, but hundreds of people have done it and are doing it. I say you set a minimum contribution to be "associate members" or whatever you call it, to be committed, with no guarantee of money back till someone shows up to replace you. If people are going to be coming up with enough money to buy a house, they can come up with an initial buy-in cost. If you run short of cash flow, you ask for voluntary no-interest offerings, which will add to the person's credit, at face value, at full buy in time. If there is no such money available, then you need to either adjust the expenses, or pay to borrow money, whether internally or externally. But it shouldn't ever be necessary to borrow at 50% interest! And if you do promise a 50% return, or any other financial perk (10% would still be better than a CD or Money Market account) , you had better have a very clear legal contract, so that you are not responsible to pay that amount if you simply don't have it. Or I suppose you could get sued for breach of contract. Lynn at RoseWind Port Townsend WA -- where we only wish we had an "extra" $50K to disburse for anything!
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50% rate of return C2pattee, April 21 2000
- Re: 50% rate of return Mariana Almeida, April 21 2000
- Re: 50% rate of return Lynn Nadeau, April 21 2000
- Re: 50% rate of return Lydia & Ray Ducharme, April 24 2000
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