Cohousing-L Mailing List: Re: Marketing Study

[Denise Meier and/or Michael Jacob (dmmj]

On Sat, 27 Apr 1996, Dan Ardoin wrote:

> The Grell CoHousing Group in Oceano, Calif. would like to know if other 
> CoHousing groups have done marketing studies for lenders (banks).  If so, 
> what 
> is your experience?  How much did it cost?  Who did the study?  Was it 
> critical to get one done in order to receive a loan from the bank?  Our 
> project manager says it is necessary, but he is new to the concept of 
> CoHousing and has background only in mainstream California developing.  Help! 
>  
> 
> Thanks,
> Corrine, Grell CoHousing Group
> Oceano, California
> 
Hello,

Michael here from Jewell Hill Cohousing in Sebastopol CA. We are
working towards bank loans as well and I can offer a few comments from our
perspective.

1. Market studies make banks happy because they provide comparable cost
information to the project that you are trying to finance. Your loan to
value ratios are based on appraisals that can be influenced by a good
market study. 

2. Permanent and construction lenders also want to know that they are not
getting into a project that could be impossible to resell if they had to
take over a mortgage, or in a disaster, the whole project and find a
wholesale buyer. In other words is there a market for your "product" as
they say. Can you show that there may be a solid base of households to
draw from. A waiting list for homes and a full project would make most of
your problems go away. Most Coho projects that I've heard of have not
been able to find that many folks in the early stages.


We are actually trying to do just that, find all 14 of our households
before signing for the construction loan. The banks want to see a viable
waiting list as well to prove that there is this market out there of folks
willing to live in Coho and walk 150 feet in the rain from the parking lot
to their house.  

As for cost of these studies, your project manager should know cost and be
able to find local real estate marketing firms who could do one. If you
have an aggressive realtor, they are another source for gaining access to
the local MLS or tax accessors records. However you need someone who can
do the analytical work to translate the comps to your project.

Hope this was helpful.

Michael Jacob
Jewell Hill Cohousing LLC
Sebastopol CA
dmmj [at] wco.com