Cohousing-L Mailing List: Finances / Profits

[Mac & Sandy Thomson (ganesh]

On 05/26/02 10:11 AM, Chris King wrote:
> Where was the profit you mentioned derived from.

> On 5/23/02 5:04 PM, "Mac & Sandy Thomson" <ganesh [at] rmi.net> wrote:
>> Ours is about 4000 sf of finished space and another 1000+ sf of covered and
>> uncovered terraces.  We spent about $435K.  Ironically, the delay in the
>> start of our CH construction turned out to be a good thing.  We had planned
>> to have it completed when the first homes were being completed, but instead
>> it started about a year late.  By that time, we knew that the overall
>> project was going to be pretty profitable so we splurged on the common house
>> (finished basement, nice flooring, extra Tectum sound proofing, big
>> terraces, etc.)  The common house gets well used and is loved by one and
>> all.

We developed our project ourselves which means that we took on the full
financial responsibility and risk.  We priced everything we sold (lots,
homes, carports) at 10% over estimated costs of those items to create an
overall 10% contingency.  All sales contracts happened before the work was
done to create the lots, homes, and carports so we didn't know what the
actual costs would be.  The contingency was a cushion to allow for
unexpected cost overruns.

Our total project  cost was about $4.5 million so our contingency was about
$450K.  We ended up with cost overruns of about $250K which means that we
had about $200K of our contingency that we didn't spend.  That $200K became
our profit.

We had agreed early on that any profit would be used for the community and
not distributed to shareholders (members).  So we've spent about half of the
profit on construction 'wish list' type things (CH improvements, furniture,
hot tub, greenhouse, etc) and saved about half 'for a rainy day'.

Is that helpful?

- Mac


-- 
Mac Thomson

Heartwood Cohousing
http://www.heartwoodcohousing.com


"I don't know the key to success, but the key to failure is trying to please
everybody."
                           - Bill Cosby

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