The Mothership is an urban intentional community in Portland, Oregon. We currently have eleven adult members and three children. Our land is held in common, and members of the community take responsibility for each other’s physical, emotional, and financial well being. We give all full members equal opportunity to participate in decision making, we have a clear and transparent process towards full membership, and we are committed to encourage each individual’s personal development.
The community shares four core values:
1) We value supporting each other as parents, believe children should be treated like humans, and humans should be treated well. Many of us co-parent each other's kids and we generally believe children to be the responsibility of the group. Our children are given a full voice in decision making, and they are given as much autonomy as is safe, including the right to express and maintain their own personal boundaries.
2) We are excited to welcoming guests. Many people think of The Mothership as home base and stop in to refuel, gather supplies, and plan new expeditions.
3) We make sure we always have an abundance of food for community members, guests, and anyone else who might ask us for it.
4) We are committed to clear, direct, open, and honest communication. Our goal is to avoid having unresolved interpersonal struggles that lead to a toxic living environment.
Information about the land: We currently own the lots at 5543 NE Going St and 5558 NE Wygant St in Portland, OR. These two properties are on the same contiguous block, and share a corner. We currently have a lease with the option to buy the house at 5557 NE Going St, which would give our community a contiguous piece of land. This house was previously another intentional community, which is now disbanding, so their infrastructure is ideal for us. We have negotiated a sale at a price of $358,000, which we believe is an excellent deal on this property. The sellers are offering us this price in order to avoiding large Realtor's commissions, and to avoid the large amount of cosmetic touch up work that would be required to get the house ready for market. Since signing the option agreement, we have already completed much of that touch-up work. We have already paid $8,000 towards this purchase price, and Zillow currently estimates the property value as $416,265. This means on the date of purchase we expect to have approximately $65,000 in equity beyond the loans we will need to secure to purchase the house.
The house is in generally good condition, has a brand new roof (April 2018), and and as a part of the purchase agreement, the sellers are making the one major repair it needs: a new sewer line.
Proposed loan terms: We seek to borrow a total of $350,000 for the purchase from one or several lenders in quantities of at least $4,000. These loans would be secured against the property with a deed of trust that would carry standard lender protections, such as the requirement to carry hazard insurance and to keep the house in good repair. Interest would accrue at a rate of 5% per year, compounded monthly (Approximately 5.12% APY). Minimum payments would be set based on paying off the loan within 30 years, but at any time, you may issue a demand to repay the loan in full within 3 years. We prefer, but do not require that such a demand for payment not come in the first two years of the loan.
Revenue Potential: Currently, the house has 6 habitable spaces. Currently, each community member contributes $790/month. That gives us an initial revenue of $4,740/month or $56,880/year. Moving forward, monthly contributions will be increasing to keep pace with market rate, and we have plans to build four more dwelling spaces, both of which will lead to increased revenue that will more than offset rising tax and utility costs by building at least one additional dwelling space and increasing member's monthly contributions.
Anticipated Annual Expenses:
|$4,800||Utilities (Average of $400/month, based on current utility usage)|
|$22,548||Loan Payments ($350,000 at 5% interest to be paid off over 30 years)|
|$16,355||Food, cleaning supplies, etc for 6 people, based on 2017 data|
|$3,709||Property taxes (based on 2017, including early payment discount)|
|$48,012||Total Annual Expenses|
This leaves us with just over $8,800 per year to put towards repairs, maintenance, and an emergency fund. This is supplemented by the ability of the owning group to do many of our own home repairs (three of our members work in a general contracting firm that we own), and a willingness the part of the owning group pay above and beyond the flat $790/month contribution in cases of emergency in order to protect our investment.
Why we are seeking private investment: At the moment, we cannot secure a traditional home loan because we recently refinanced the loan on our first property and tapped our reserves to buy our second property. Once we can demonstrate that mortgage has been paid through rental income for over a year, we can have it removed from consideration in our debt to income ratio. Until then, we not eligible for a bank loan. Even though we have demonstrated a track record for making this business model work, banks will not lend money for a house based on the rental income potential of that house. The 3 year demand clause on these loans feels safe to us. We are confident that at any point in the future, given 3 years to plan, we will be able to refinance your loans, either through another private party, or through more traditional financing options.
Current status of our goal: We have a commitment from one person to lend us $29,000 and who is willing to take the last lien position, meaning that in the unlikely event of a significant drop in the market value of the house, your interest in the property would be protected both by the current equity and by their loan.
We still need to secure loans totaling: $321,000
If you have any questions, please call or text Davi at (503) 885-4700, or reach out to us through our contact us page.