Cohousing-L Mailing List: Re: percentage of members to build

[Kathryn McCamant (kmccamant]

From Sharon: 

And as Gilda Iriarti who used to do the financial stuff for the Cohousing 
Company, advised a group in Florida and probably many others, work with a bank 
from day one. Ask your banker for referrals to architects, developers, etc. 
Because they are on the money end of things and see projects succeed and fail 
everyday, they know who consistently brings in projects on time and within 
budget. Interview bankers upfront. And talk about real estate development not 
required meals, support networks, or self management.

I knew Gilda well, and she was a great mentor for us early on.  But I beg to 
differ. Most cohousing groups would scare away banks (and developers) if they 
talk to them early on. And you never get another shot at “introducing” your 
project cleanly again. If their take away from that first meeting is that you 
are a bunch of nice, well intentioned folks who have no idea what you’re 
getting into…… it will be hard to convince them to take a fresh look later when 
you’ve gotten your shit together. The construction lending world is a small 
world, even in big markets, so I have found it much more effective to build up 
a group, make sure they are “real” about costs and the money, and then put 
together a really strong package to send out to banks, and actively “shop” the 
construction loan.  As developer Jim Leach always reminds me, if you have the 
buyers (that will/can  buy for what it is really going to cost to build your 
project), you can find the money to build it. The bigger challenge tends to be 
finding enough qualified cohousing buyers ready to put their funds in to a 
forming project. 

Katie 
-- 
Kathryn McCamant, President
CoHousing Solutions

241B Commercial Street 

Nevada City, CA 95959

T.530.478.1970  C.916.798.4755

www.cohousing-solutions.com
 




On 9/18/16, 9:38 AM, "Cohousing-L on behalf of Sharon Villines" 
<cohousing-l-bounces+kmccamant=cohousing-solutions.com [at] cohousing.org on 
behalf of sharon [at] sharonvillines.com> wrote:


> On Sep 18, 2016, at 7:53 AM, Susan Adams <sadams430 [at] gmail.com> wrote:
> 
> What percentage of your anticipated membership did you have before you
> began to build your homes?

Unless you are self financed, banks will set this number — the construction 
loan will require a certain percentage of homes to be “under contract.” Banks 
do finance developers who have tons of assets, but I don’t think those 
developers are financing cohousing, at least this week.

The percentages I’ve heard as bank requirements is 72%-75%. 

I remember the day when the purchase option on our land was expiring. We had to 
have signed contracts plus a 5% non-refundable deposit for 75% of the units had 
to be in by close of business the next day. Since many of us were not even 
living locally and others had funds in accounts that were not available with 24 
hours notice, it was a scramble. We were fortunate to have a member who was 
able to do short term loans to people who didn’t have access and somehow we 
managed this long distance.

If we had not been able to do that, we/the developer would have lost the land. 
Property prices had gone up so much in our area that the land owner would have 
been very happy to have it back.

BUT that said, you have to keep moving as if you had 75% or whatever your bank 
requires of the units sold. Proceed on faith to work as hard as you can because 
that is what sells units.

And as Gilda Iriarti who used to do the financial stuff for the Cohousing 
Company, advised a group in Florida and probably many others, work with a bank 
from day one. Ask your banker for referrals to architects, developers, etc. 
Because they are on the money end of things and see projects succeed and fail 
everyday, they know who consistently brings in projects on time and within 
budget. Interview bankers upfront. And talk about real estate development not 
required meals, support networks, or self management. 

Sharon
----
Sharon Villines
Takoma Village Cohousing, Washington DC
http://www.takomavillage.org




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