Message to the Builder-Developer/Partner:

Benefits of Participating in Program & Guarantee Agreement

You are in business to make money. Every one in business tries to get as much as they can for the goods and services they offer for sale, while remaining in competition. True, other people you do business with won't necessarily reduce their cost of goods to you from their normal selling price if you reduce the price of home construction; Here's a program that fits within your interest, please read:

Our goal is to make homes accessible to the Middle Class home buying public. The obvious way to do that is to bring down the initial cost of homes to the buyers. There are three problems in doing that:

1. The County wouldn't earn as much as they would like in sales or property taxes (But should they anyway? When already they're gaining taxes upon taxes they shouldn't have in their coffers, by realizing property tax values ON TOP of the In-Lieu Fees they've additionally placed on new homes built, which also increased artificially (certainly not due to construction inflation) the value of existing home stocks). The prices of homes have shot through the roof in coastal Southern California areas, not solely due to the cost of goods or production, but primarily because of inaction on the part of the County, or actions meant to restrict building and the rezoning of land for access to homes). 

2. The builder-developer in any normal design-build sales proposition would earn less than market rate for the work that they perform, because they're only working on a bid proposal. On the other hand, our plan does not decrease earnings for you.

3. That unless we have an agreement with the buyers to maintain our cap on value of the home they buy, they will receive a "windfall profit" if they could buy low and turn around and sell high the next day. Then the home that was built as affordable would be unaffordable 24-hours later!

Our effort is to maintain the homes in an affordable state for many years to come. At the same time, we want to maintain a moderate cap on "market prices" for the homes we build/sell. We also ensure the main reason people want to buy a home, to secure their future, still exists. In order to make that work, we've set up agreements so that buyers: 

1. Can sell out their interest in the home at some future date and receive back their initial investment. (If the market hasn't receded; which it is not likely to do in this geographic area). 

2. Can will their interest in the property to their heirs. 

3. Earn a "reasonable" return on their investment.

Our Plan Does Not Decrease Earnings for Builder-Developers

The fact is that if the rate of market value of the homes in coastal Southern California were not increasing at the pace they are, our plan might not be as attractive as it is. 

• For now though, our plan succeeds by allowing the builders to share in the future profit of the home with the homes' owners.

• The builder-developer/contractor would either maintain their agreement to receive funds over the long term value increase on the home, or sell their "paper" contract to a bank, mortgage or factor company. 

• Factors and banks have to believe/make a gamble that the future value of the homes will increase at some rate that would make it safe for these finance companies to buy the "paper" contract from the builder-developer/contractors.

What we ask of you and our offer to you, as builder-developer is:

1. That you will work with us to construct a home that can sell for under the maximum sales price allowable, before the Cities or County require the tacking on of an "In-lieu" fee for their Inclusionary Housing tax program; whether the law at the time of construction requires more or less than a certain number of homes be built on one property at one or another time prior to the tax being additionally charged to the home and hence the buyer.

   1. That the maximum sales price we mutual sell it at will be equal to what a 2-person income can afford to buy at the median income for this Metropolitan Statistical Area. 

2. That you will use the same quality materials you would use in building here as elsewhere. 

3. That you gain an immediate interest in the equity that exists between the sold price and the appraised value, at the rate of 50%, based on the amount of your work performed contract.

4. That you gain a percentage of future equity in the home, as an investment for your future. 

5. (See a monetary equation, by clicking here of a home built and sold on a land owner's land)

Note this part, at the base of the equation: 

Caring about your community
In closing, the price of homes here is as high as it is for a few primary reasons, none of which happened because you created that benefit on your own. We ask you to help us, and not think solely of your own good. Yours is the only industry, save for perhaps the oil industry where the market is so skewed and out of balance. You have nothing to lose, and everything to gain. These plans will increase the amount of homes for sale in the county, at all income levels. 

Your inaction to assist the community to have housing are only hurting yourself in the long run. With the lack of homes being built here, because of the many reasons we all know, you really don't have the opportunity to work locally. In fact, perhaps many of your contracts to build are actually out of town. 

We'd like to work with you to create housing locally. To make this happen, we need your assistance and the cooperation of many segments of society. You know how building homes has positive multiplier effect on your community. You've read the stories from your builders' association. We ask that you become a hero and do something that will not only benefit the overall community, but following our system will also benefit you personally, now and in the future. 

Please contact me to have a conversation about joining our effort. Thank you, Gary Cook

(To view a sample formula for how your company benefits by our equation, please click here).

What the Buyer Receives

Buyer Waiting List for a Home

Home Development Costs & Sales Prices

Process of Buying an Affordable Home

Offer to Purchase exists to Members

General Contractor & Subcontractor Trades