Cohousing-L Mailing List: Questions on Financial, Legal and Sweat Equity Structures

[Jasmine Gold (jasmine]

I'm interested in getting information on how different communities have
handled buy-in once they've found land as well as alternative ownership
models to the traditional cohousing model where everyone owns their own
home. The traditional model won't work for my property so we're trying to
figure out how to structure it. More details below the questions.

1. What was your initial or minimum buy in? How did that change over time?

2. Are there any communities here that are not legally structured as single
family homes or condos? How are you structured? LLC? Tenants in Common?
Private Membership Association? Co-op?

2. How does your structure affect buying and selling homes?

3. Does everyone own the property as a whole and is everyone listed on the
mortgage? Do residents have exclusive rights to their home? Is everyone
invested equally?

4. Do you have silent investors or investors who don't live there? Do they
get a set rate or a percentage of profit? What kind of decision making do
they have?

5. Do you allow sweat equity? I'm especially wondering about
professional services like a licensed contractor who wants to fix up an
existing home instead of making a down payment.

6. Did you build your homes together or did the residents build their own
homes?

I'm sure there will be follow up questions too.

Here are more details on the situation.

My friend and I are in escrow on 10 acres of rural land in Sonoma County,
California. The property has been subdivided into four lots. Each lot is
zoned to be able to have a home, 2 ADUs (up to 1200 square feet) as well as
a  junior ADU (up to 500 square feet) for a possible total of 16 dwellings
(15 with common house which might have rental rooms). While legally each
lot can only have one owner, we hope internally to make all or most of the
homes owner occupied.

There are four existing homes on two of the lots that all need a lot of
work. One lot has a large home on it that may eventually become the common
house, but initially the two of us will live in it. The three smaller homes
on one of the other lots are currently rented.

There is a family thinking about joining our group that would like to live
in one of the rental homes. The husband is a licensed contractor and the
family can qualify for a loan, but they don't have much cash to put down.
They would like to fix up their home as sweat equity. This seems perfect
since the two of us won't have money left over for constructing new homes
or fixing up the other homes after buying the property and fixing up the
home we are going to live in. The amount they can pay per month is about
the same as the house is currently renting for. We aren't sure how to
credit the sweat equity though.

Thanks for your help,
Jasmine