Cohousing-L Mailing List: RE: Starting Construction with 50% of Units Sold

[Rich Lobdill (richardl]

Sharon:

And I posted this over the weekend but never saw it on the list so it may
not have made it--Does anyone have experience with starting construction
with only 50% of the units sold?

One comment. We were required to be 70% presold before we could get financing 
but one thing became a bit more clear after we actually obtained financing and 
this might help in your pitch: We have 27 households. The bank made table 
showing the expecting sequence of the pay off of the loan. The bank will be 
paid off after the 23 rd unit closes (income from the 24-27 units is our 
contingency). So when we were 70% pre-sold at 19 units, the bank actually had 
83% (19 of 23) of its investment covered by pre-sales.

So, I think the argument could be made to a bank that you need to sell enough 
houses to cover 70% of the banks loan amount, not 70% of the houses. Maybe 
splitting hairs but if you are stuck at a certain number of pre-sales....

By the way, we are now on the brink of being sold out and are about 2/3 through 
the construction process. At least one member household chose us specifically 
because we were actually building. (They had be in a cohousing group which 
dissolved).

Rich Lobdill
Tierra Nueva Coho
Oceano, CA