Vail Valley man says ‘equity sharing’ idea for homes can help housing crunch
September 27, 2018
EAGLE COUNTY — There are hundreds of vacant building lots in the Vail Valley. Greg Jackson believes he has a plan to put homes on those sites and help the valley's affordable housing crunch in the process.
Jackson recently launched Jackson Custom Homes, a project that looks to help people build equity and live affordably.
Using both modular homes and custom log homes, Jackson's plan is to pair two investors in one home — usually a larger main home with attached accessory unit. The investors would pay the mortgage on just the cost to build that home. The home would be resold in two years at market price.
The homes will be fully equipped and fully furnished. All partners have to bring is their personal effects, Jackson said.
At sale, the investors take a prenegotiated share of the equity — Jackson said equity shares start at $50,000. Jackson's company takes the rest.
Then, partners might participate in another home. Or two.
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The idea, Jackson said, is to take a partner who might qualify for a $450,000 mortgage and a partner who might qualify for a $250,000 mortgage.
Together, that buying power would finance the construction of a home that would cost $700,000 or so to build but might be worth $1 million or more on the open market.
Jackson calls the units to be built "luxury homes," and he's looking at lots in areas including Cordillera. The building rules in parts of that community allow custom log homes. Another spot is the Brightwater development on Valley Road south of Gypsum.
That neighborhood, first annexed into town more than 20 years ago, has streets and infrastructure but few homes. Jackson said Brightwater could be a good spot for equity-sharing homes.
Jackson, whose background is in commercial and residential financing, has lived in the valley since 2002. That means he saw the economic slump that hit the valley full force in about 2009. During that slump, people who bought at the top of the market — between about 2005 and 2008 — found themselves with expensive homes that were worth much less than they'd paid just a few years before.
If another deep slump hits, Jackson said equity partners can continue to live in their homes — paying the mortgages, of course — until the market turns around.
The company will buy out people who can't ride out a downturn, he said.
Jackson said he's been working on this idea for the past couple of years. At the moment, he's working a couple of sales jobs, including at the Evergreen Lodge, while putting most of his time and effort into the equity-sharing project.
While there are plenty of lots available at Brightwater, Jackson said there are also a number of building sites east of Wolcott.
"We have lot acquisitions we're working on in Minturn," he said.
The equity-share model could be a way for people to transition from renters to owners, Jackson said.
And that transition can happen fairly quickly. It can take between five and seven months to have financing arranged, equity shares negotiated, homes ordered from suppliers and the product built on site.
The idea, Jackson said, is to both address a need and help people build wealth.
"We've got to make this place home for everyone who lives here," he said.
Vail Daily Business Editor Scott Miller can be reached at email@example.com and 970-748-2930.