Sharewell Housing
Investment Opportunity

McCulloch Construction Corporation & the McCulloch Foundation, a 501 C3 Non-Profit
Call, text or write John: john@mccullochconstruction.com C: 503-709-0035

Executive Summary

Affordable Housing, made available to those who need it most, changes lives. 

Independent companies can create better affordable housing at higher volume and lower cost than charities or government projects.

Though we have been active in philanthropy for decades, we have seen that most charities lack the power of modern business. By partnering our non-profit with our business enterprise, we have the formula to make the greatest impact investing for social good possible.

We have invented the Sharewell Model to yield the greatest societal good per dollar. 

We remodel existing housing, saving hundreds of thousands over the cost of a comparable new build. Our homes center around a shared kitchen, laundry, and common areas, adding additional savings and functionality.

Our Sharewell properties house those with common interests to forge community and belonging. We have identified demographics where we can make the greatest difference. These populations have the budding potential to benefit most from a hand up, rather than a hand out. They can also continue to pay modest rents, even in a downturn.

As with all real estate, it is not only the cost of rents, but a question of location and quality that determines the overall success of an investment. While other housing can be lucrative while the market is high, affordable housing is right for the recession; a safe investment regardless of market fluctuations.

Our properties are selected for the best locations; we are able to identify below market pricing and buy quickly. All homes are remodeled with quality, durability, and craftsmanship in mind.

Thirty years of running a lean, real estate investing and remodeling business was our path to unmatched efficiency. When you invest with our foundation, your dollars do more social good than anywhere else.

If you are an accredited investor (supported by your CPA), you are invited to join John McCulloch, the McCulloch Foundation, and McCulloch Construction to invest in our next Sharewell Housing venture: 38 Briarwood Rd. Lake Oswego OR, 97034.

Floor Plans, Ground Floor As Built: 5 bd, 3 bth

Floor Plans, Second Floor As Built: 2 bd, 1 bth

Site Summary

 

Our current Sharewell project sits on a quiet dead-end lane in desirable Lake Oswego.

 

Property:

 

38 Briarwood Road. On .31 of an acre, built in 1998, 7 bedrooms, 4 Baths with room for more. Zoned R-10, for shared living. A very good buy through a bank forced sale for $462,000. Zestimate is $924,567, though the real market value was closer to 600,000, based on location.

 

Neighborhood:

High-end Bird Hill neighborhood consisting of new luxury homes, the Historic Emma Austin Home, and valuable waterfront properties. Because the neighborhood dead-ends into driveways in all directions, there is no pass-through stranger traffic. Ours will be the only rental activity. This is a tight-knit, long term, successful and affluent neighborhood. A great place to make positive connections. Minutes to multiple parks, shopping, and less than a mile to the Lake Oswego Library. 

 

 

 

School District:

 

(with Great Schools Rating)

 

Forest Hills Elementary School, K-5, Distance 1.2 miles. (9/10 Great Schools Rating) 

 

Lake Oswego Junior High School, 6-8, Distance 2.8 miles. (10/10 Great Schools Rating)

 

Lake Oswego Senior High School, 9-12, Distance 2.8 miles. (8/10 Great Schools Rating) 

 

 

 

Tryon Creek State Park:

 

Amazing nature reserve with paved and bark trails. Distance .25 miles from the Sharewell 

 

From the park’s website: “8 miles of hiking trails, 3.5 miles of horse trails, 3-miles of paved bike trail, and a paved all abilities trail. 8 bridges, Nature Center with interpretive exhibits, Guided hikes, summer day camp, Junior Ranger Program, School Field Trips, Special Events.

 

Our current Sharewell project sits on a quiet dead-end lane in desirable Lake Oswego.

 

 

 

Property:

 

38 Briarwood Road. On .31 of an acre, built in 1998, 7 bedrooms, 4 Baths with room for more. Zoned R-10, for shared living. A very good buy through a bank forced sale for $462,000. Zestimate is $924,567, though the real market value was closer to 600,000, based on location.

 

 

 

Neighborhood:

 

High-end Bird Hill neighborhood consisting of new luxury homes, the Historic Emma Austin Home, and valuable waterfront properties. Because the neighborhood dead-ends into driveways in all directions, there is no pass-through stranger traffic. Ours will be the only rental activity. This is a tight-knit, long term, successful and affluent neighborhood. A great place to make positive connections. Minutes to multiple parks, shopping, and less than a mile to the Lake Oswego Library. 

 

 

 

School District:

 

(with Great Schools Rating)

 

Forest Hills Elementary School, K-5, Distance 1.2 miles. (9/10 Great Schools Rating) 

 

Lake Oswego Junior High School, 6-8, Distance 2.8 miles. (10/10 Great Schools Rating)

 

Lake Oswego Senior High School, 9-12, Distance 2.8 miles. (8/10 Great Schools Rating) 

 

 

 

Tryon Creek State Park:

 

Amazing nature reserve with paved and bark trails. Distance .25 miles from the Sharewell 

 

From the park’s website: “8 miles of hiking trails, 3.5 miles of horse trails, 3-miles of paved bike trail, and a paved all abilities trail. 8 bridges, Nature Center with interpretive exhibits, Guided hikes, summer day camp, Junior Ranger Program, School Field Trips, Special Events.

 

Development Plan

This 7 bedroom house is plumbed for 4 bathrooms. We will expand to 10 individual bedrooms, and 5 full bathrooms. Mothers will be able to rent individual rooms, so that they will have two bedrooms, or a total of 5 mothers with 5 children.

We expect that the remodel and other miscellaneous costs will run another $350,000. (Misc. costs will include holding costs). The all-in cost will be about $850,000, or $85,000 per door. The rents will be based on 6% of this, with utilities, and taxes on top. Taxes will add 83.33 per room per month. $5,100 per door per year, or 425 per month rent, is the basic rent at 6%. Including taxes that is 508.33 per month or $1,016 per month for two bedrooms. Because utilities are split 5 ways, these are easier to manage.

The Investor puts in 500,000-725,000. John McCulloch carries the rest, and for the same rate of return.

Investment is open until one investor per property is found. Occupancy and cash flow being achieved, the cash flow to the Investor begins. Once the space begins to rent out, the Investor receives an immediate flow of $283.33 on each single door rented out, or $20,000 per year on the $500,000, (1,667 per month), or $30,000 per year on $750,000, (2,500 per month), which in either case is a 4% return on investment).

The gap between the money from the Investor and the $850,000 total will be covered by John McCulloch for the same return of 4%. The remaining 2% collected go to the McCulloch Foundation. With this money the foundation will cover the maintenance, pay insurance, provide property management, and run services required to build the Sharewell community.

Timeline

The project is already off and running. We bought the property that was in the final stages of repossession and bank auction for a very low price. We immediately re-roofed it and cleaned up after hoarder. We are designing floor plans to best accommodate more people in the house.

Activities Winter Spring Summer Fall
Acquisition purchase
Investor Capital One investor per LLC. formation cash flow
Architectural Design Complete plans Complete permits
Remodel roof Demo Complete remodel
Lease-Up Curate renters Leased

Property Selection: We met with housing leadership at the city, county and state levels. We asked where the greatest lack of affordable housing is, and what demographic is most in need. They told us: Lake Oswego and single mothers.

We met the challenge finding properties in Lake Oswego, with the best schools in the State, and zoned R-10. We purchased where we had improved the neighborhood by investing already, and bought bank foreclosure and distressed properties.

Investor Capital: We have funded the prior projects alone and have built a reliable cash flow model. We want to help more people through taking on additional capital from outside our organizations. By giving away the profits to the investor, we can grow our impact.

Architectural Design: Specializing in houses from architecture’s bygone Golden Age by Portland’s greatest architects: Doyle, Lawrence, Ertz, Belluschi, Bennes, Jacoberger, Knighton, Pipes, and Bowman. McCulloch Construction is second to none for serious remodel design in the region. John’s design is performed for this worthy cause at no charge.

Permits: The City of Lake Oswego is working with us to grant all permits. The process will be ongoing during construction and will continue into the summer.

Remodel: Our lean, nimble and efficient team of serious craftsmen handle construction with an unparalleled blend of artistic design, craftsmanship and frugality. Lease-Up: Six months to vet single mothers with high potential for success children needing access to best schools. Candidates will build community and share childcare duties .

Subject Property: 38 Briarwood Rd., Lake Oswego, Oregon

The Sharewell Housing Game Changer:

The Sharewell House Model: A new model for building long-term affordable housing that heads off the homeless emergency upstream, where the greatest impact is possible. This is the best tool for addressing the challenge of homelessness. Not a hand out, but a hand up, Sharewell housing is a ladder to success, rather than creating a dependency. People in a Sharewell house face similar challenges, and help each other to build supportive communities and economic success.

Economic Hard Times Equal Investment Opportunity: The downturn is a lifetime opportunity to buy and remodel properties at low prices, making the service, product and investment all better.

Time for Low Risk, Conservative Investing: A downturn is not time for high risk high return investing. Start-ups, stock market mixed products, malls, emerging markets, and even savings accounts are probable candidates for losing money in a fluctuating market. Safe, predictable, and nearly recession-proof investments are the order of the day.

Shared Housing is the Answer: In the Great Depression boarding houses were a huge growth industry. Now is the time to expand its modern counterpart: The Sharewell Model.

Regular Monthly Payments: With a Sharewell House Investment yields a monthly return that is supported by rents, and backed by the security of your name on the title.

Ultra Low Risk: Demand for affordable housing is in demand no matter the state of the economy. You will be doing your part in the down turn to help others, while not diluting the power of your wealth to make a difference by seeing it used up in less skillfully managed efforts.

Vacancies occur in direct proportion to rents per door. The Sharewell is able to offer excellent quality at some of the lowest rental prices in the greater metropolitan area. These low costs keep vacancies close to zero.

Sharewell Investors: No responsibilities, virtually no liabilities.

You are not responsible for finding or serving tenants.

Landlording can get tough. However, with the Sharewell Model all of the property management and population services are handled through a non-profit, keeping the investor untroubled by the hassles of managing renters and arms length away from any potential legal issues revolving around evictions, alleged discrimination, injury, or the like. Investors are in an LLC, so that they have an arms length form transactions. Further, the LLC does not manage populations or property directly, but contracts through the McCulloch Foundation, thus enjoying a second layer of distance and protection.

Sharewell Investors Enjoy the Peace of Mind of Real Estate Backed Investment: Your name is on the title. Real estate is the safest hedge against inflation available in tough economic times. Your investment is secured by real estate.

In the worst-case scenario, you end up owning the property, which you want to be prepared for as your downside risk. However, unlike other investments, real estate always has value and rental property always produces cash flow.

Proven Track Record: We have Sharewells up and functioning, with years of steady success, cash flowing, low turnover and creating increasing numbers of happy stories for the community. We are seeing people able to thrive because we supplied them with support and extremely low rents in quality housing. Today we have eight million in our rental portfolio, and are on schedule to reach roughly 50 people in high quality housing in just our third year of entering the affordable housing arena.

Simple Investment: Most investments are a complex mixture of construction projects with a teams of architects, faceless corporate partners, possibly different properties with complicated upside scenarios and projections and unclear responsibilities for managing costs. A Sharewell investment is for one property at a time only. You will know the exact plans and see detailed construction costs. Every step of the way our investor has full access to every detail, right down to even the smallest receipts, with weekly reporting during the project and monthly reporting after the project is completed.

One Investor per Property: Because there is only one investor per property, you are not part of an investment syndicate scheme, but a one to one investor to property. You are the person behind the project.

Accountability: With McCulloch Construction finding the property, and doing the work, and McCulloch Foundation managing the property, you have essentially one point of accountability: John McCulloch, real estate investor, general contractor, architectural designer, and founder of the McCulloch Foundation. John has been doing design and remodeling and real estate investment for more than 25 years. And he is responsible to you to see that your project is on time, on budget, and created with quality at every turn.

About John McCulloch

You are teaming up with an individual you can trust: John McCulloch. Typically investments require faith in faceless corporations with unknown casts of managers, board members, and other decision makers. With real estate investments, as with the stock market, there is little accountability or visibility into what they are doing, or how they are run. With our investment, the buck stops with John McCulloch, designer, remodeler, acquisitions, founder of McCulloch Construction and McCulloch Foundation, and someone with his own money and reputation on the line with your investment.

“My heart is in the community. For four generations the McCullochs have prospered in Portland and Oregon. Every generation since the 1800’s has named their oldest boy John, has lived in Irvington, and has given their time and treasure to help the community. I have reached the stage of life where I aspire to projects for the greater good. I have enjoyed working on more beautiful and significant projects than I could have ever dreamed possible and have worked on over 1,000 homes. I have been a teacher and a coach to thousands of people.

I am fortunate to have the gift of being the leader of a rare and spectacular team specializing in design, remodeling, affordable housing creation, property management, and real estate investment and development. These are the best skills to make a lasting difference!

In over 1,000 renovations and investment projects, zero lawsuits, zero bad press. Living in the same neighborhood for four generations, the McCullochs understand reputation, and make decisions that bear the scrutiny of time. I am offering to share a good investment opportunity in order to magnify the social good we can do together for society. When you join forces with me you know we will do business with integrity, and leave people and things better off than we found them.”

Sharewell Certification

The McCulloch Foundation’s concept of the Sharewell is the potential cure for run-away housing costs and is scalable. As the income disparity has grown, prices are driven by top earners, so that homelessness grows artificially faster when the economy is healthy. No discussion of homelessness or affordability is complete without encompassing income disparity.

While taxing the very rich has been proposed as a necessity by thinkers like Bill Gates, Warren Buffet and others, more taxes do not guarantee wise spending. Our approach is more targeted.

When Philanthropists and successful business owners invest in housing with a modest return of 4%, this is a safe portfolio diversification, without unsustainable yield growth. The Sharewell Model mends housing by harnessing the cause of the problem to become its own solution.

While capitalism is the ultimate engine, unbalanced, it eliminates the middle class and creates an expanding working poor. Sharewell rebalances the system to make entry level housing possible.

And while the virus is terrible, it is also an opportunity to restructure around a scalable and sustainable solution for people in desperate need of low cost housing.

While we hope that the government spending is effectively managed, it is time to act. Chaotic governmental responses remind us that the best ideas have usually come from grassroots organizing. For affordable housing, we look to ourselves as successful entrepreneurs who understand housing as investors, designers, remodelers, and landlords. With our skill set we have a better shot at addressing affordable housing efficiently than we could hope to see from governmental generalists.

Sharewell means reasonable returns and conservative sustainable profits; altruistic landlording that is right for the recession. To grow access to the solution we are making our concept open source, and sharing the profits. We only ask that those who share our model go through the Sharewell Certification, a simple, low cost process that lets others know Sharewell landlords are providing quality housing at low rents to deserving tenants.

To protect the concept we are patenting the Sharewell House as a certification system. When people hear the words “Sharewell Certified,” they will know that the house has been certified by the McCulloch Foundation and meets the following requirements:

  1. It is an existing house that was re-worked for shared housing.
  2. Investors are only making 3-4% and rents are only 5-6% of the total invested.
  3. A group of people live together who have common challenges to their success.
  4. There are volunteers from outside the house regularly lending their time to help those within the house become more successful.
  5. Renters have agreed through their leases to meet once per month.
  6. Renters have agreed to share and alternate house responsibilities.
  7. A part of rents collected are paid into a fund in equal parts to manage the property and to serve the population. These two parts must be spent in equal amounts annually.
  8. The house is equipped so that no more than 2 unrelated people share a bathroom.
  9. Renters are recruited by referrals and or using applicant profiles that prevent discrimation while putting like populations together for success.
  10. The landlord works to foster two communities: a community in harmony within the house, and a community of those who can help support the particular demographic of the house from without.
  11. The landlord must have an annual, painless evaluation and continuing certification of the process by the McCulloch Foundation in order to maintain active Sharewell Certification.

Mission

Our mission with Sharewell is to serve vulnerable populations by not only housing them, but by forging them into communities for greater success. The Sharewell Model, which we have had multiples of running for years now, is shared housing with a double community; Inside, populations help each other; outside, volunteers meet with our residents and offer coaching and help finding resources.

We see a role for a recreation of shared housing, with modern amenities, communal engagement, and thoughtful management. We believe the Sharewell model will translate into success for renters as well as owners.

Refurbishing existing housing stock is far cheaper than building new, and shared housing means yet lower cost per door. It can also mean a community where people can help each other. In a Sharewell similar groups of people overcome shared challenges through partnering. We find them volunteers from the community to help them find resources and to find road maps to success.

Touchstones

I. Investors

The investor buys into a Sharewell with McCulloch Construction Corporation. McCulloch Construction remodels and modifies the property to reach our goals for affordable shared housing. This can include creating multiple single rooms with attached bathrooms out of a formerly large single-family home. This will allow for many more adults to comfortably rent the space.

For an investment of $100,000 per door (well below market rate) the house will spin off $5,500 in rents every year. Where we are able to reduce the door price, the return per door rises. McCulloch Foundation charges 2% on the total amount invested in return for property management and other services.

The Investor gets a base return of 3% on their money with a 50% share in all profits over the initial 5% return coming in from the rents. As rents are higher, or as fees are collected, or less remodel investment is required, the profits are shared equally between investor and McCulloch Construction.

II. Track Record

The Sharewell Model has a proven track record and has been serving multiple populations. McCulloch Construction has survived and thrived through past economic hardship. We have the books to prove both the health and continuing success over years of affordable housing.

Our construction company has rock-solid fundamentals, a strong balance sheet, cash reserves and profits that have been steady for a quarter of a century. Our skilled team is lean, efficient, and capable of the highest quality builds – at below market.

We buy homes, upgrade them, refinance them, and repeat the process. By partnering with a real estate company with our decades of experience you are putting your money in the safest place possible.

You get to invest directly into one property as the only investor. As the only real estate investor, you have a lock on the property with no fellow investors to create volatility or cause untimely liquidations. YOU are in control.

The populations we help often have income assistance from the government in every economy, but especially in times of distress.

The investment term is 7 years with the option to renew. The exit strategy is for us to refinance the investment based on our entire real estate portfolio, the long rental history we will have in place by the time you withdraw your funds, and on being on the other side of the economic crisis.

We invest with you. We have skin in the game. Your profits flow in from rents monthly, and are based on exactly how much of the investment you put in.

This is your legacy. Your unselfish leadership in the arena is an example for your family, for your descendants and for your community.

R.O.I.

The investor gets a 4% ROI as a direct flow from rents. $500,000 returns a profit of 140,000 in seven years of occupancy, with the opportunity to reinvest.

$750,000 returns $210,000 in seven years.

Other upside cash flow, such as fees or rent increases are to be shared equally between the investors and the Foundation.

III. Past Success

We have had our Montavilla Sharewell up and running for two years.

Population: 7 young women who could not afford to live elsewhere. Among them those who have aged out of foster care.

Invested: $650,000

Rents: $3,520 per month, $42,240 per year, .64 percent return on investment.

In 7 years we make a gross profit of $295,680, on 650,000 total investment. These profits go to supporting the renters in finding greater success, and in growing the model.

Sharewell Willow House:

Young professionals looking to get ahead. $1,300,000 invested. 6,000 per month rents, 72,000 per year.

IV. Management

The building will be newly renovated, with modern amenities and new, easy upkeep landscaping. The McCulloch Foundation, a nonprofit corporation, will manage the selection of appropriate tenants and community partners, handle repairs and maintenance, and pay certain utilities, taxes, and other fees. The will be paid out of the rent at a set rate of 2% of capitalization.

The McCulloch Construction company charges a 0% builder’s fee on renovating the properties, and a reduced rate on the construction, using prices equivalent to 1990’s pricing for our labor. Rents for each property will start at 6% of the money invested. After the McCulloch Foundation collects 2% for a fee for managing the property, the remaining 4% will go to the investor.

V. Our Clients

One of the biggest problems society faces is a lack of community. Yet when a group of people with similar challenges can share resources and work with community partners, their chances improve.

VI. Our Volunteers:

For the sharewell for formerly homeless elders, our volunteers are retirees with advanced degrees in social work who have met with the house for Our Sharewell house community partners have included retired social workers with PhD’s, Our goal is to help them out of poverty, and the poverty mindset, by working with groups that build financial literacy and capacity among the working poor.

The populations we help have stable income assistance from the government in every economy. This investment in people can pay dividends over time, as the non=profits, community groups and other partners that McCulloch works with at each Sharewell home will be tailored to fit the unique experiences and situations of.

VII. Risks:

Worst case scenario: You take the home and now you own it. Investors should weigh the possible consequence. The good news is that real estate always has value and always increases in value over the long term. Real estate backed investments are simply the safest way to protect money in a severe recession.

Another risk is that you will happily give of your time as you are joining the Sharewell Family. You will probably become proud of your contribution to changing the lives of the people you are serving by helping to create a Sharewell Home. You may want to meet your renters and help them connect with successful people in the community who can further magnify their successes.

VIII. Our Next Project:

McCulloch Construction has a great project on deck.

Mechanics of the Deal:
Purchase price: $462,000
Property location: Lake Oswego, Oregon
Clean up:
Roof rebuild:
Loan costs to late: (2 loans)
Skylight x 4 = $4,000
Taxes per month:
Schedule: 6 months
Remodeling budget:
$/ sq. foot
Add x # of showers
Add 1 bath
Convert garage to living area – 2 baths

$700,000 for 9 beds

Rent @ 5% = $35,000
$2,916 per month, $324 per bedroom per month
Property and other taxes
Mortgage
Profit

Total access to books for McCulloch Construction
McCulloch Construction charges 10% on overseeing construction

This Sharewell is available for investment NOW!

Estimate of cash flows for the project. Investor Return number is investor cash flow after management expenses. The IRR in this example is 4.77%. This example assumes continuous rents and 2% increase in rent, consistent with inflation. This does not reflect any potential capital gains, fees, or other unpredictable cash out profits or expenses.

Investment: $450,000
Number of Renters: 8
ProFormaNOI: $14,000
ProForma Cap Rate: 3%
Market: Portland

Goals

  1. Continue to create affordable and inspiring shared housing.
  2. McCulloch Construction purchases and remodels-to-purpose existing housing into multi-tenant semi-communal housing. After construction, McCulloch Construction (McCulloch Foundation provides property management and services for 1/3rd of rents) will administer the property. Investors will get a 4% virtually recession-proof fixed percentage of their investment as a return.
  3. Provide a long-term return on investment for patient smart accredited investors who understand the potential gravity of the economic situation and are looking for a safe haven for their wealth, for diversification, etc. want to add a non-correlated, (how about safe from market volatility, inflation-protected investment to their portfolio.
  4. Build long-term equity in the communities we serve. Because this model is designed by entrepreneurs with extreme fiscal discipline, it is helping stabilize society for the less affluent by helping them survive the economic downturn without any waste. While most non-profit and governmental solutions waste money, this approach is 100 percent lean for the greatest traction per dollar in this crisis.