purchase option route for land buying
From: Lynn Nadeau (welcomeolympus.net)
Date: Sun, 14 Oct 2001 12:14:04 -0600 (MDT)
Cheryl Kliewer wrote, titled "Building Community":
... The owner of the
>land we hoped to purchase said that we need to put half the money down on
>our land Nov. 1, 2001 and pay the other half in March 2002.  The cost of our
>land is $240,000 for 9 1/2 acres. >We only have five member families. ... I 
fear that losing the land is the end of our project.  I
>doubt our five families will pay half the money that quickly.

Lynn at RoseWind responds:
 When our cohousing group was in a similar situation, we made a 
purchase-option contract with the seller. 

Our deal went something like this:
Every 6 months, at the latest, we would "initiate" the payment on another 
acre, with a payment of $5000, and from that time on, pay x amount a 
month ($250?) on it, and prior acres. We paid the property tax on the 
entire parcel throughout the contract period. We were guaranteed the 
purchase price to remain locked in, as long as we met the schedule. There 
may have been a bit of interest tacked on, but it wasn't much.

The advantage to us was obvious. The advantage to the seller was 
spreading out his capital gains aver several years, to reduce his taxes, 
while providing a steady flow of income. 

I think this is a fairly common real estate gambit, so a broker or real 
estate lawyer in your state should be able to guide you in offering such 
an arrangement. You have nothing to lose but the legal fee, and it seems 
like it *could salvage a difficult bind. 

With this in place, we were able to eke out the payments from our 
pockets, keeping track of how much equity-credit each person had. Over 
time, additional families joined us with financial commitments (at that 
point a $10,000 payment made one an Associate Member, since our home 
sites did not yet have legal existence, so couldn't be bought), and that 
happened often enough to deal with the twice-yearly $5000 payments. 

Several years later, the land was all paid for. We then proceeded to fund 
the infrastructure installation, and the common house, with the 
development money gained as our site was officially platted into our 
commons and home sites (allowing us to pay up our lot price and get a 
deed) and as later members joined us, to our full complement of 24 
households. 

Inch by inch, row by row - is one of many ways cohousing can grow. 

Lynn Nadeau

Lynn Nadeau, RoseWind Cohousing
Port Townsend Washington (Victorian seaport, music, art, nature)
http://www.rosewind.org
http://www.ptguide.com

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