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Home Store

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A model for a home store, which could be linked to Chris Cook financing model.http://www.slideshare.net/ChrisJCook/equity-shares-a-solution-to-the-credit-crash-presentation
Transcript
  • 1. HomeStore Home ownership for America’s working families A BUSINESS CONCEPT SUMMARY
  • 2. Detroit thought the route to success was building bigger and bigger SUVs. Toyota, on the other hand, came out with the Prius. Isn’t it about time that someone came up with the Prius of affordable housing?
  • 3. Challenge
  • 4. The Problem <ul><li>$41,340: national median income. </li></ul><ul><li>$381,250: median King County home price - growing faster than salaries. </li></ul><ul><li>High energy, gasoline, and housing prices drive demand for housing alternatives. </li></ul><ul><li>Affordable housing options drive longer commutes, impacting quality of life. </li></ul><ul><li>Families with limited incomes trade commute time for safety and security, increasing traffic and environmental impacts. </li></ul>
  • 5. Concept
  • 6. <ul><ul><li>Home Store is a profitable business model for affordable, healthy, and sustainable residential communities in both urban infill and suburban green field developments. </li></ul></ul>
  • 7. The Home Store Concept COMMUNITY Panelized construction systems Next Home design Resident driven development Seller financed property acquisition CONSTRUCTION DESIGN LAND ACQUISITION
  • 8. Next Home design <ul><li>Flexible and sustainable </li></ul><ul><ul><li>Adapts to diverse cultural and life-cycle needs </li></ul></ul><ul><ul><li>Adapts to both infill and large-scale land use applications </li></ul></ul><ul><ul><li>Reduces construction costs, eliminating 40% of materials waste through design </li></ul></ul><ul><ul><li>Energy efficient </li></ul></ul>
  • 9. Panelized Construction Systems <ul><li>High quality, high efficiency </li></ul><ul><ul><li>Ensure high quality, consistency, and reliability through production quality control systems </li></ul></ul><ul><ul><li>Reduce construction costs, by up to 25% </li></ul></ul><ul><ul><li>Shorten construction timelines </li></ul></ul><ul><ul><li>Minimize financing costs </li></ul></ul><ul><ul><li>Eliminate waste </li></ul></ul>
  • 10. Resident driven development <ul><li>Builds healthy, safe, self-sustaining, communities </li></ul><ul><ul><li>Sites woven into fabric of larger community </li></ul></ul><ul><ul><li>Clustered design balances privacy and community </li></ul></ul><ul><ul><li>Pre-selling reduces financing costs, and builds community based on relationships, promoting neighborhood safety and social well-being </li></ul></ul><ul><ul><li>Participatory design process teaches homeowners to effectively manage features and budgetary constraints, teaching financial literacy, home design, and maintenance </li></ul></ul>
  • 11. Seller financed property acquisition <ul><li>Target market </li></ul><ul><ul><li>Small real estate investors </li></ul></ul><ul><ul><li>Community organizations </li></ul></ul><ul><ul><li>Minority real estate investors </li></ul></ul><ul><li>Seller financed loans </li></ul><ul><ul><li>Subordinated mortgages </li></ul></ul><ul><ul><li>Installment contracts </li></ul></ul><ul><ul><li>Option agreements </li></ul></ul><ul><li>Engage seller as partner </li></ul><ul><ul><li>Reduces up-front costs </li></ul></ul><ul><ul><li>Yields higher ROI to seller over property market value </li></ul></ul>
  • 12. Scenario <ul><ul><li>1/2 to 1 acre of land </li></ul></ul><ul><ul><li>Twelve “stacks” of one to three units each </li></ul></ul>720 sf 720 sf 720 sf 1440 sf 720 sf 720 sf 1440 sf 2160 sf 720 sf 720 sf 720 sf 1440 sf 720 sf 720 sf 1440 sf 2160 sf 720 sf 720 sf 720 sf 1440 sf 720 sf 720 sf 1440 sf 2160 sf $350, 000 $125, 000 $225,000 $240,000 $110, 000 $125,000 $115, 000 $110, 000 $350, 000 $125, 000 $225,000 $240,000 $110, 000 $125,000 $115, 000 $110, 000 $125,000 $115, 000 $110, 000 $240,000 $110, 000 $125, 000 $225,000 $350, 000
  • 13. Scenario economics
  • 14. Market Strategy
  • 15. Pricing Strategy Based on Median Area Incomes (MAI) customers can afford these purchase prices, and are pre-qualified at 30% of income.
  • 16. Target market: studio/1 bedroom <ul><li>Single women, young couples, older adults (single and couples) aging in place </li></ul><ul><ul><li>600 square feet </li></ul></ul><ul><ul><li>$110,000 purchase price </li></ul></ul><ul><ul><li>$912 Monthly mortgage payment </li></ul></ul><ul><ul><li>Affordable by individuals and couples at 70% or higher of King County MAI </li></ul></ul>
  • 17. Target market: two bedroom <ul><li>Families of 3-4 </li></ul><ul><ul><li>1200 square feet </li></ul></ul><ul><ul><li>$240,000 purchase price </li></ul></ul><ul><ul><li>$1989 Monthly mortgage payment </li></ul></ul><ul><ul><li>Affordable by families of 3-4 at 100-120% or higher of King County MAI </li></ul></ul>
  • 18. Target market: four+ bedroom <ul><li>Large and extended families </li></ul><ul><ul><li>2160 square feet townhouse </li></ul></ul><ul><ul><li>$350,000 purchase price </li></ul></ul><ul><ul><li>$3000 Monthly mortgage payment </li></ul></ul><ul><ul><li>Affordable by families with at least 3 working adults at 80-120% or higher of King County MAI </li></ul></ul>
  • 19. Target market: 1 bedroom + workspace <ul><li>Couples and small families with home-based business </li></ul><ul><ul><li>1200 square feet studio/1 bedroom unit </li></ul></ul><ul><ul><li>$225,000 purchase price </li></ul></ul><ul><ul><li>$1869 Monthly mortgage payment </li></ul></ul><ul><ul><li>Affordable by couples and families of 3 at 120% or higher of King County MAI </li></ul></ul>
  • 20. Long range vision
  • 21. The Home Store long range vision Panelized construction systems Next Home design Resident driven development Seller financed property acquisition HOUSING FACTORY HOMEOWNER LITERACY WORKSHOPS RETAIL STORE SELLER OUTREACH STRATEGIES
  • 22. Next Steps
  • 23. Objectives <ul><ul><li>Develop pilot business plan </li></ul></ul><ul><ul><li>Identify partners </li></ul></ul><ul><ul><li>Develop pilot site totaling 12-30 housing units in South Seattle/White Center </li></ul></ul><ul><ul><li>Evaluate lessons learned </li></ul></ul><ul><ul><li>Develop rollout business plan </li></ul></ul>
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