Naylor Court
This is a page dedicated to gathering information for Naylor Court (one block north of Blagden Alley).
The property
Simon, Ari, and Erin went to go view the property on Dec 22. The spec sheet from Greysteel is here. Note the price listed. In that document the price is listed is $995,000. However, the realtor said the price had been reduced to $940,00 and hinted that the owner would be down to go to $840,000. The owner has been sitting on the property since 2019, and bought it for $900,000. They were hoping for it to be a taco shop (they also run one of the oyster places in town, forget which). They've had a renter in the property for 3 years of that period. The property has a historic overlay, which makes it unattractive to developers at the moment. A historic overlay means that we can't significantly alter the front footprint of the building, but could add stuff to the back.
It's 600sq ft over two floors. The ground floor has a full kitchen and washer drier, the upstairs floor has a bathroom (full bath). It's a small small space. There's also 1300 sq ft of garden that's just an unkept lawn at the moment. It has all plumbing, gas, etc.
The possibility
This is enough indoor space for us to operate in at the size we are now, but we can't afford it. This is likely also enough space for us to operate in at 100 members, or even more, at which point we could afford about $1,000 a month in rent (remember the projections spreadsheet). With 460 members things might start getting tight, but we could afford the loan payments on our own.
So, there is a strong possibility that we would need to find other ways to raise the rest of the payments. This is do-able through community building and charitable donations. For example, Ward 2 Mutual Aid raises about $3,500 a month in donations, Ward 1 Mutual Aid does about $6,000.
Additionally, it's possible to do something cool in the garden. Think beer garden, tool library, community event space, art space, etc. These could help pay the rest of the mortgage.
This is doable with the right level of commitment, business plan, connections, and luck. Simon's pulsed this with one of the BCI people who hasn't shot it down right away.
The task
If we want to do this, we need to do a couple of things, and there's some urgency.
- Determine if there are members in Greens and Beans (and/or Ward 2 Mutual Aid) who want to work on this (and likely exclusively this, at least for a while)
- Build a business plan that's concrete.
- Reach out to many organizations to talk to them and see what we need.
- BCI
- Douglas CLT
- Some bank?
- Build a campaign for fundraising $200-$300k for the down payment. Then continue fundraising so we can pay off the loan earlier. This could be in community forgivable loans, community mortgage, etc.
- Decide who owns the property. Is it Greens & Beans? Or is it a parent organization (501c3? nfp?) that Greens & Beans becomes a tenant of? Does the land itself belong to a community land trust (Simon thinks ideally yes, and they might have money to help us buy if so).
Some realities
A business loan for this might be expensive, because we're a new business. If we're going the classic business loan road, we need about 25% down, and we'd get a 6% rate. So we need about $210,000 up front, and add about $50,000 of closing costs. Likely, we don't have infinite time to raise that down payment (let's say 3 months from the date we're serious about making the offer and put down earnest money (5%, so around $45,000). And we are looking at paying $4.6k a month in loan payments and $1,402,200 over the entire time (25 years) of the loan. Obviously the less loan we take, the better, cause the less we're just giving the loan giver money. On top of that there'd be property tax, which looks like it's about 7k a year.
See the tables in the appendix to think through what those numbers could look like in a variety of combinations.
Finally
Even if we don't get this property, all of this is good exercises that we should be doing anyway.
Appendix
1. Monthly Payment Table by Down Payment Amount
Assumptions: 25-year loan term, 6.8% fixed interest rate
| Down Payment | Down Payment % | Loan Amount | Monthly Payment | Total Paid Over 25 Years | Total Interest Paid |
|---|---|---|---|---|---|
| $90,000 | 10% | $810,000 | $5,609 | $1,682,700 | $872,700 |
| $135,000 | 15% | $765,000 | $5,299 | $1,589,700 | $824,700 |
| $180,000 | 20% | $720,000 | $4,989 | $1,496,700 | $776,700 |
| $225,000 | 25% | $675,000 | $4,674 | $1,402,200 | $727,200 |
| $270,000 | 30% | $630,000 | $4,360 | $1,308,000 | $678,000 |
| $315,000 | 35% | $585,000 | $4,050 | $1,215,000 | $630,000 |
| $450,000 | 50% | $450,000 | $3,116 | $934,800 | $484,800 |
2. Monthly Payment Table by Interest Rate
Assumptions: 25-year loan term, 25% down payment ($225,000), $675,000 loan amount
| Interest Rate | Monthly Payment | Total Paid Over 25 Years | Total Interest Paid | Monthly Payment vs. 6.8% | Total Interest vs. 6.8% |
|---|---|---|---|---|---|
| 4.5% | $3,739 | $1,121,700 | $446,700 | -$935 (-20.0%) | -$280,500 (-38.6%) |
| 5.0% | $3,946 | $1,183,800 | $508,800 | -$728 (-15.6%) | -$218,400 (-30.0%) |
| 5.5% | $4,157 | $1,247,100 | $572,100 | -$517 (-11.1%) | -$155,100 (-21.3%) |
| 6.0% | $4,349 | $1,304,700 | $629,700 | -$325 (-7.0%) | -$97,500 (-13.4%) |
| 6.8% | $4,674 | $1,402,200 | $727,200 | Baseline | Baseline |
| 7.5% | $4,986 | $1,495,800 | $820,800 | +$312 (+6.7%) | +$93,600 (+12.9%) |
| 8.0% | $5,209 | $1,562,700 | $887,700 | +$535 (+11.4%) | +$160,500 (+22.1%) |
| 9.0% | $5,663 | $1,698,900 | $1,023,900 | +$989 (+21.2%) | +$296,700 (+40.8%) |