Cohousing-L Mailing List: Re: Re: Your bank loan

[John Major (jmajor]

>Yes, you'll need to raise money of your own before the bank will talk to
>you, but the construction loan can be essentially a revolving fund.  Use it
>to build the first few homes (and probably the common house).  When
>the owners move in, their mortgages go to pay off a portion of the
>construction loan which is continuing to pay for the building of the next
>homes.

This strategy has been suggested to us, involves a lot less interest to pay
off, and so has a lot of appeal  ;-)   So, Willy, what would you say is the
downside? Those I can think of are:

- The length of the construction phase - how long since breaking ground
at Greyrock has it taken to get your 14 families moved in? Didn't the
phased building stretch the time out? How did folks feel about living in a
construction zone?

- Higher overall direct construction cost - I assume that the builders had to
do, say 5 foundations at a time, instead of 14 all at once, and therefore
you didn't get economies of scale on labor and materials.

- Not having enough excess $$ to build the Common House until everyone
has moved in - or did you figure out a way of financing it early in the
game?

What say the rest of you? Is Phasing the way to go? Less *Usury*
involved, anyway - ol' Possum would be proud!

John Major
Wasatch CoHousing
jmajor [at] mhz.com