To buy a property, you will need:
- to be registered as a co-operative
- a business plan with cashflow projections
- a bank account
- a potential mortgage and other possible loans - you need to have spoken to some lenders and had a positive response
- loan stock or co-op capital to make up the rest of the purchase price and other expenses
- a solicitor. Either use a solicitor who specialises in co-op law, or a local solicitor you have heard is good, or find one off the internet. You want a solicitor that specialises in conveyancing or building law, not criminal law. It is probably a good idea to get a few quotes and go for the best. As well as price, you may also want to consider things like how experienced they are with housing co-ops, how quickly they respond to messages, how easy you find it to communicate with them, etc.
Once you've found somewhere that works for your group (or part of your group if you are not housing everyone together), make sure you decide amongst yourselves who will talk to whom (the bank/other lenders, owners, solicitor, architect, planning department, builders, etc.) and then start the process.
Basic steps to buying a property
Create a working cashflow model
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Get an agreement in principle for a mortgage from a bank or building society
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Look for other sources of mortgage-type loans
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Raise Loanstock to cover the gap of the mortgage
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Look at the Energy Performance Certificate
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Find out if there are floor plans available for the building that you can go through with an architect, a building project manager, or someone else with some experience
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Check if you will need planning permission for a change of use s
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Put in an offer to the owners
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If the owners are responding positively, and you think the purchase could potentially go ahead, get a building survey and valuation.
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If the building would need work before you can move in, work out if this is affordable
go through the surveyors report with someone who has some idea of building works. Start getting quotes for the works needed (e.g. Replace all front windows, with wooden frames and sealed units – quote from joiners and glaziers; Rewire throughout – quote from electricians; Painting and decorating – done by ourselves – estimate of costs of materials). It will very useful to draw up a works schedule, with a list of jobs in order, listing how long each job will take. This will help you estimate how much time will pass between buying the property, and getting it ready to move in. You need to know this to plan cash flow through the first year. You may need to employ an architect if alterations are substantial, if so you will need to factor their fees into the business plan. Some mortgage lenders will require you to make a plan of these works.
Submit the reports along with your business plan to the bank (and any other organisations you want to borrow money from) and arrange to talk to them.
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