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HomeStore Home ownership for America’s working families
A BUSINESS CONCEPT SUMMARY
Proprietary and Confidential © Home Store 2006 July 13, 2006
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?
Challenge
Proprietary and Confidential © Home Store 2006 July 13, 2006
The Problem
$41,340: national median income. $381,250: median King County home price -
growing faster than salaries. High energy, gasoline, and housing prices drive
demand for housing alternatives. Affordable housing options drive longer commutes,
impacting quality of life. Families with limited incomes trade commute time for
safety and security, increasing traffic and environmental impacts.
Concept
Proprietary and Confidential © Home Store 2006 July 13, 2006
Home Store is a profitable business
model for affordable, healthy, and
sustainable residential communities
in both urban infill and suburban
green field developments.
Proprietary and Confidential © Home Store 2006 July 13, 2006
The Home Store Concept
COMMUNITY
Panelized construction
systems
Next Home design
Resident driven
development
Seller financed property
acquisition
CONSTRUCTIONDESIGN
LAND ACQUISITION
Proprietary and Confidential © Home Store 2006 July 13, 2006
Next Home design
Flexible and sustainable Adapts to diverse cultural and life-cycle needs Adapts to both infill and large-scale land use
applications Reduces construction costs, eliminating 40% of
materials waste through design Energy efficient
Proprietary and Confidential © Home Store 2006 July 13, 2006
Panelized Construction Systems
High quality, high efficiency Ensure high quality, consistency, and reliability
through production quality control systems Reduce construction costs, by up to 25% Shorten construction timelines Minimize financing costs Eliminate waste
Proprietary and Confidential © Home Store 2006 July 13, 2006
Resident driven development
Builds healthy, safe, self-sustaining, communities
Sites woven into fabric of larger community Clustered design balances privacy and community Pre-selling reduces financing costs, and builds community
based on relationships, promoting neighborhood safety and social well-being
Participatory design process teaches homeowners to effectively manage features and budgetary constraints, teaching financial literacy, home design, and maintenance
Proprietary and Confidential © Home Store 2006 July 13, 2006
Seller financed property acquisition
Target market Small real estate investors Community organizations Minority real estate investors
Seller financed loans Subordinated mortgages Installment contracts Option agreements
Engage seller as partner Reduces up-front costs Yields higher ROI to seller over property market value
Proprietary and Confidential © Home Store 2006 July 13, 2006
Scenario
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
1/2 to 1 acre of land Twelve “stacks” of one to three units each
$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
Proprietary and Confidential © Home Store 2006 July 13, 2006
Scenario economicsQTY UNIT COST EXPENSE
Land 1.00 $200,000.00 $200,000.00Real estate commission 1.00 $10,000.00 $10,000.00Site work 1.00 $300,000.00 $300,000.00Construction 12.00 $216,000.00 $2,592,000.00Permits, Inspections, Environmental, etc. 1.00 $50,000.00 $50,000.00
Marketing, Design, Engineering, Sales, Community-building, Project management, Operations 1.00 $500,000.00 $500,000.00Financing costs 1.00 $250,000.00 $250,000.00Contingency 1.00 $150,000.00 $150,000.00TOTAL EXPENSE $4,052,000.00
QTY UNIT COST REVENUEUnit pre-sales 12.00 $350,000.00 $4,200,000.00TOTAL REVENUE $4,200,000.00
NET PROFIT $148,000.00
Market Strategy
Proprietary and Confidential © Home Store 2006 July 13, 2006
Pricing Strategy
Based on Median Area Incomes
(MAI) customers can afford these
purchase prices, and are pre-
qualified at 30% of income.
Proprietary and Confidential © Home Store 2006 July 13, 2006
Target market: studio/1 bedroom
Single women, young couples, older adults (single and couples) aging in place
600 square feet $110,000 purchase price $912 Monthly mortgage payment Affordable by individuals and couples at 70% or
higher of King County MAI
Proprietary and Confidential © Home Store 2006 July 13, 2006
Target market: two bedroom
Families of 3-4 1200 square feet $240,000 purchase price $1989 Monthly mortgage payment Affordable by families of 3-4 at 100-120% or
higher of King County MAI
Proprietary and Confidential © Home Store 2006 July 13, 2006
Target market: four+ bedroom
Large and extended families 2160 square feet townhouse $350,000 purchase price $3000 Monthly mortgage payment Affordable by families with at least 3 working
adults at 80-120% or higher of King County MAI
Proprietary and Confidential © Home Store 2006 July 13, 2006
Target market: 1 bedroom + workspace
Couples and small families with home-based business
1200 square feet studio/1 bedroom unit $225,000 purchase price $1869 Monthly mortgage payment Affordable by couples and families of 3 at 120%
or higher of King County MAI
Long range vision
Proprietary and Confidential © Home Store 2006 July 13, 2006
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
Next Steps
Proprietary and Confidential © Home Store 2006 July 13, 2006
Objectives
Develop pilot business plan Identify partners Develop pilot site totaling 12-30 housing
units in South Seattle/White Center Evaluate lessons learned Develop rollout business plan