CO-BUYING IS THE NEW AFFORDABLE HOUSING MODEL Presented by Eva Otto Owner/Broker, MES, LEED AP, Ecobroker

Transcription

1 CO-BUYING IS THE NEW AFFORDABLE HOUSING MODEL Presented by Eva Otto Owner/Broker, MES, LEED AP, Ecobroker

2 WELCOME Infiniti RED is a full-service real estate and development brokerage specializing in innovative housing solutions for the Greater Seattle area. We help people and businesses find and create their space in the world. We combine traditional commercial and residential brokerage services with a futurefocused commitment to the triple bottom line.

3 TODAY S AGENDA: What is Affordable Housing? Review of Shared Housing Options Cooperatives, Cohousing, Micro-Community How to Form A Housing Partnership What Makes A Successful Community? What Options are Available to Co-Buyers? Market Examples and Case Studies Financing How To Get Started

4 OUR GROWING CITY

5 HEADLINES 2017 HOME SALES Seattle No. 1 in home-price growth again; starter homes require half of income More records fall: Median home price hits $722,000 in Seattle and $880,000 on Eastside King County home prices surge 18 percent, most on record for this time of year Seattle home price growth is nearly double any other U.S. city

6 HEADLINES 2017 APARTMENTS After a brief slowdown, Seattle rents surge again. Rents slow around the country but surge in Seattle Report: Seattle renters need $1,248 income boost to keep up with rising rent Renting in Seattle? This is how much your income needs to jump to keep up with expected increases

7 WHAT IS AFFORDABLE HOUSING? Not more than 30% of your total income is paid in housing costs, including taxes, insurance, HOA (not including maintenance) How does this affect the way we live?

8 THE WAY WE LIVE IS CHANGING - SHARING ECONOMY Smaller Housing Sizes Preference changes from Suburbs to Core Multi-Generational Values-Based A shared economy is a socio-economic ecosystem built around the sharing of human, physical and intellectual resources. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and

9 PEOPLE LIVING TOGETHER ON THE EXPLICIT BASIS OF VALUES Fellowship for Intentional Communities Economic: What if we could share the cost or leverage our collective buying power? Social: What if I could live in a community with shared values? Environmental, Sustainable: How can my housing choices make an impact on my community and planet? Agricultural/ Farming: Where can I grow my own food? Cultural, Religious, Spiritual

10 COMMUNITIES IN WASHINGTON

11 1) COHOUSING -INTENTIONAL COMMUNITY Participatory process Designed for community Private homes with common spaces and structure Non-hierarchical structure of committee or consensu making for projects CC&Rs for shared spaces Often vacant land to new construction Often Condominium Ownership IVATE HOMES CLUSTERED AROUND COMMON SPACE

12 2) HOUSING COOPERATIVE Instead of owning actual real estate, with cooperative housing you own a part of a corporation that owns the building. Started in NYC in 1800s Nationwide, 1.2 million co-op units, 40 buildings Seattle Shareholder in a non-profit corporation, Member Members must be approved Stricter Financing, HOA includes all taxes, insurance, fees

13 3) MICRO-COMMUNITY DESIGNING COMMUNITY Small Scale Development Cottages Clusters of 4-12 units Urban Infill Lots (L1, L2, L3) Fee Simple Ownership No Partnership Agreements

14 CREATING YOUR OWN COMMUNITY What are the steps for purchase property together with others?

15 ELEMENTS FOR A SUCCESSFUL PARTNERSHIP/COMMUNITY Shared Values/Vision Location, Location, Location Type of Housing/Design/Function Partnership Contracts Low Barrier to entry/easy to purchase/sell

16 HOW DO I FORM A HOUSING PARTNERSHIP? Types of Agreements (Fee Simple, Condo, Coop) Tenants in Common (TIC) (Bank Financing) LLC (No Bank Financing) By-Laws, CC&Rs Covenants, Conditions and Restrictions Key Elements of the Agreement Cash/Ownership allocation Management Exit Plan Dispute Resolution

17 Types of Co-Buying Single Family Home Multi-family (Duplex, Triplex, Apartments) Land/Tear Down for New Construction (urban infill townhomes, cottages)

18 Recently Sold Examples for Single Family Ryan Street House Equal Ownership - Bank Financing Price $999,000 Ryan Street South, Equal Owners 33.3%/33.3%/33.3% Tenants in Common 8 Bedrooms, 1 MIL with 2 Bedrooms Total 10 bedrooms (rentals average $700/room) Price: $333,000 Price Target $100,000 per bedroom

19 For Sale for Co-Buyer Examples for Single Family Lucile St - Unequal Ownership Price: $550, S Lucile Street, Seattle House is divided in 2 units (MIL in lower unit with 2nd kitchen) Upper Unit (66%) for Sale includes Living, kitchen, dining, front & back porch, 3 beds, 2 baths, +Den, shared yard. Walk to light rail, CC Lower Unit(33%) Kitchen, Living, 2 beds, 1 bath Appraised value $823,000

20 For Sale Examples for Multi-Family EXISTING STRUCTURE - DUPLEX Price: $ 680, th Ave W (Beacon Hill) Lot Sq. 3,048 (L1 zone) Number of Units (2 total): 2 beds, 1.5 bath Per Unit Cost: $340,000 Equal ownership, Side by Side identical units 2 Separate Tax Parcels Redevelopment Opportunity for Single Family

21 For Sale Examples for Multi-Family EXISTING STRUCTURE - TRIPLEX Price: $ 1,099, N 35th (Fremont) Lot Sq Zoned L3 Number of Units (3 total): Mix Price/Unit: $550,000split (or unequal ownership) Price/Unit 3 ways $600K, $350K, $125K 2 Parking Redevelopment Opportunity for 2 Single Family

22 For Sale Examples for Multi-Family EXISTING STRUCTURE - 4 PLEX Price: $ 895, nd Ave Seattle, WA (Lake City) Lot Sq. 5,600 Building 3,100 Number of Units (4 total): (2) 2 beds, (2) 1 beds Price/Unit :$450,000 split w/rental unit Cooperative Model/Investment Model 4 way split $300,000 (2 bed) $150,000 (1 unit)

23 Recently Sold Examples for New Construction URBAN INFILL - Micro-Community in Lake City rd Ave NE, Seattle, WA new construction Built Green Homes Each 1680 sf 3-4 beds (Garage or 4 bed option) Building Cost for owners: $403,000 ($240/sf) Land Cost for owners: $118,000 each Total Cost to owners $521,000 each Market Price: $627,500 ($106,500)

24 Financing: Lenders: Prequalification Down-payment Appraisal Vanessa Lono 1-4 Residential Units Umpqua Bank Eileen Burke Co-op Lender Caliber Loans Trevor Reese Co-Buy Lender Loan Depot

25 How Do You Get Started? 1) To build your vision and community - talk with family, friends & gather. 1) Review ownership, contract and financing options - what will it take to be ready to make a purchase? 1) Narrow down a location and what type of development is ideal for you.