Fred McNab, managing partner of Rocking Horse Redevelopment, is no stranger to the ups and downs of the home building industry. After being laid off from the finance office of a big production builder in 2007, he founded Rocking Horse with friend Rob Anderson and began rehabbing older homes in Denver and Phoenix. The duo flipped 37 houses before the full effects of the recession and financial market collapse began to kick in. Last year, after the first-time home buyer federal tax credit ended, sales fizzled.
“That sent us back to the drawing board to figure out a new way to be competitive,” McNab says. “It’s just such a hard market to get really any kind of toehold or advantage.”
Although infill redevelopment is inherently green, the pair had not incorporated any other eco-friendly features into their projects. So, they considered high-performance remodeling as a way to boost profits but weren’t sure how to make it feasible or even where to start. “We thought green rehabs were too expensive and cost prohibitive and wouldn’t work with our business model,” McNab says.
Late last year they heard about a brand-new initiative from Phoenix-based GreenStreet Development, a franchise opportunity that provides consulting and support for remodelers, builders, and developers looking to tap into the green building market. The program focuses on turning distressed properties into attractive, affordable National Green Building Standard-certified homes. It is modeled on GreenStreet’s successful approach to renovating foreclosed homes near Phoenix’s light rail system, most of which have sold for a profit in three days or less. (Click here for related story on one of those properties.)
By buying older homes below market value, GreenStreet founder Philip Beere found he could rehabilitate them to ultra-efficient standards, sell them for less than the appraised value, and still make a profit. He thinks the formula will work in many U.S. cities, especially those with older homes near mass-transit lines
“We streamlined our model so that no matter where a person is located they can follow this program,” Beere says.