Cohousing-L Mailing List: Re: Incentives for early joiners

[Berrins (Berrins]

In a message dated 4/21/00 9:43:20 PM Eastern Daylight Time, 
welcome [at] olympus.net writes:

<<  You can also make a decision as a group to accept an interest-bearing 
 loan from a member, with a written contract. We did that a time or two, 
 and it worked ok. >>

We did that at Pathways for the building phase, and saved a ton of money.  
This is the way I remember it working (John Ryan, our development 
coordinator, would know many more of the details)...

When the builder starts building, they need a lot of up front money to pay 
folks and buy supplies.  The original plan called for us to approach banks 
and ask for loans.  The builder said he would lend us a bunch of money if we 
could raise enough money among ourselves to demonstrate (in a monetary sense) 
our comittment to the project.  Lending our own money to ourselves and 
bypassing the banks saved us several tens of thousands of dollars in bank 
fees alone.  Most folks lent money at less than market rates, saving us more 
money; these loans have been paid back at the closings.

We raised enough money among ourselves that by the time we needed the builder 
to lend us money, we were just getting to the first closings, bringing in the 
serious bucks.  I don't believe the builder had to actually lend us much.

We have talked about lending to ourselves after we are all moved in for toher 
things besides building, but that has raised issues of "living beyond our 
means."  That's a whole separate issue!

    -Roger