Financial Details

Background on Right to Purchase Parcel

Shared Spaces has the first right of refusal on the purchase of the property for the total cost of $900,000. According to the lease agreement, “The seller grants to the buyer and buyer’s successors and assigns the right to purchase the property on or before the expiration date of 12/31/21.”

Option 1: Outright Purchase

Option 2: Down Payment & Private Loan

Option 1: Outright Purchase

Estimated Total: $1,049,000

Heron’s Nest’s preferred purchase option is outright purchase, meaning we want to buy the land in its entirety rather than taking out a private loan. This would be cheaper, faster, and more efficient than taking out a loan.

  • Full Cost of Purchase - $900,000

    Time of Sale - Owner intends to place property on commercial market in December of 2021, meaning at least a down payment must be secured by then in order to prevent the owner from placing the property on the market.

  • Fiscal Sponsor Fee - $63,000

    Due at Time of Sale

  • Taxes & Fees - $86,000

    Due At Time of Sale

Option 2: Down Payment + Private Lender Loan

Estimated Total: $1,172,000

The second option for purchasing the land is to submit a down payment first and secure a private lender to front the majority of the cost. We would then pay it back like a mortgage.

  • Down Payment - $180,000

    Time of Sale - Owner intends to place property on commercial market in December of 2021, meaning this down payment must be secured by then in order to prevent the owner from placing the property on the market. 

  • Principal Loan From Private Lender - $860,000

    This loan would cover the remainder of the property cost as well as the estimated property taxes, attorney’s fees for closing the purchase, etc. This would be essentially an ongoing mortgage from a private lender willing to provide The Heron’s Nest with the remainder of the cost of the property.

    In Washington State, any loan for a property with a single family home over $776,000 is considered a jumbo loan and is only supplied to individuals or companies with extensive credit histories, limiting access to traditional mortgages for this property to developers with decades-long credit histories.

    As a result, in order to spread the cost over several years, The Heron’s Nest would need to secure a private lender willing to assist in this endeavor to lend $800,000.

  • Interest - $155,000

    Should the Heron’s Nest take out an $820,000 loan from a private lender, we estimate a 5% interest rate with repayment over 5-10 years, bringing the total interest paid over this period to a range of approximately $105k-$210 depending on the duration of repayment.

  • Fiscal Sponsor Fee - $12,600

    Time of Sale