diff --git a/samcli/local/init/arbitrary_project.py b/samcli/local/init/arbitrary_project.py
index 5f450a4afd..eaeb13aed0 100644
--- a/samcli/local/init/arbitrary_project.py
+++ b/samcli/local/init/arbitrary_project.py
@@ -8,6 +8,7 @@
 
 from pathlib import Path
 from cookiecutter import repository
+from cookiecutter import exceptions
 from cookiecutter import config
 
 from samcli.lib.utils import osutils
@@ -17,6 +18,16 @@
 LOG = logging.getLogger(__name__)
 
 
+BAD_LOCATION_ERROR_MSG = (
+    "Please verify your location. The following types of location are supported:"
+    "\n\n* Github: gh:user/repo (or) https://github.com/user/repo (or) git@github.com:user/repo.git"
+    "\n          For Git repositories, you must use location of the root of the repository."
+    "\n\n* Mercurial: hg+ssh://hg@bitbucket.org/repo"
+    "\n\n* Http(s): https://example.com/code.zip"
+    "\n\n* Local Path: /path/to/code.zip"
+)
+
+
 def generate_non_cookiecutter_project(location, output_dir):
     """
     Uses Cookiecutter APIs to download a project at given ``location`` to the ``output_dir``.
@@ -65,9 +76,13 @@ def generate_non_cookiecutter_project(location, output_dir):
         download_fn = functools.partial(repository.clone, repo_url=location, no_input=no_input)
 
     else:
-        raise ArbitraryProjectDownloadFailed(msg="Unsupported location {location}".format(location=location))
+        raise ArbitraryProjectDownloadFailed(msg=BAD_LOCATION_ERROR_MSG)
 
-    return _download_and_copy(download_fn, output_dir)
+    try:
+        return _download_and_copy(download_fn, output_dir)
+    except exceptions.RepositoryNotFound:
+        # Download failed because the zip or the repository was not found
+        raise ArbitraryProjectDownloadFailed(msg=BAD_LOCATION_ERROR_MSG)
 
 
 def _download_and_copy(download_fn, output_dir):
diff --git a/samcli/local/init/exceptions.py b/samcli/local/init/exceptions.py
index 5fde33aaaf..43c4c5aab7 100644
--- a/samcli/local/init/exceptions.py
+++ b/samcli/local/init/exceptions.py
@@ -17,4 +17,4 @@ class GenerateProjectFailedError(InitErrorException):
 
 
 class ArbitraryProjectDownloadFailed(InitErrorException):
-    fmt = "An error occurred when downloading this project: {msg}"
+    fmt = "{msg}"
diff --git a/tests/integration/init/test_init_command.py b/tests/integration/init/test_init_command.py
index 527599a78e..641fbc58b1 100644
--- a/tests/integration/init/test_init_command.py
+++ b/tests/integration/init/test_init_command.py
@@ -189,6 +189,19 @@ def test_arbitrary_project(self, project_name):
             self.assertEqual(os.listdir(str(expected_output_folder)), ["test.txt"])
             self.assertEqual(Path(expected_output_folder, "test.txt").read_text(), "hello world")
 
+    def test_zip_not_exists(self):
+        with tempfile.TemporaryDirectory() as temp:
+            args = [_get_command(), "init", "--location", str(Path("invalid", "zip", "path")), "-o", temp]
+
+            process = Popen(args)
+            try:
+                process.communicate(timeout=TIMEOUT)
+            except TimeoutExpired:
+                process.kill()
+                raise
+
+            self.assertEqual(process.returncode, 1)
+
 
 def _get_command():
     command = "sam"
diff --git a/tests/unit/local/init/test_arbitrary_project.py b/tests/unit/local/init/test_arbitrary_project.py
index b4472bd870..87b1b2a8a6 100644
--- a/tests/unit/local/init/test_arbitrary_project.py
+++ b/tests/unit/local/init/test_arbitrary_project.py
@@ -8,6 +8,7 @@
 
 from pathlib import Path
 
+from cookiecutter.exceptions import RepositoryNotFound
 from samcli.local.init.arbitrary_project import generate_non_cookiecutter_project, repository
 from samcli.local.init.exceptions import ArbitraryProjectDownloadFailed
 
@@ -51,3 +52,12 @@ def test_must_fail_on_local_folders(self):
 
         with self.assertRaises(ArbitraryProjectDownloadFailed):
             generate_non_cookiecutter_project(location, self.output_dir)
+
+    def test_must_fail_when_repo_not_found(self):
+        location = str(Path("my", "folder"))
+
+        with patch.object(repository, "unzip") as unzip_mock:
+            unzip_mock.side_effect = RepositoryNotFound("repo")
+
+            with self.assertRaises(ArbitraryProjectDownloadFailed):
+                generate_non_cookiecutter_project(location, self.output_dir)