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San Diego Union Tribune

Father-son projects are tailor-made for veterans
Home renovations are affordable and qualify for VA-insured loans

By Roger Showley

Patrick McMillin, president of McMillin Ventures, carried a clipboard taking notes as he walked through a home his company hopes to purchase and renovate. At right, his father, Patrick McMillin Sr.

Housing investors may get a bad reputation for buying foreclosures, slapping on a coat of paint and flipping the properties a few months later at a huge markup. But then there is McMillin Ventures. Founders Patrick F. McMillin, 57, cousin of the late developer Corky McMillin, and his son Patrick L. McMillin, 34, buy seriously distressed properties, spend months and tens of thousands of dollars on repairs and sell them, more often than not, to military veterans.

"When you dedicate your life and serve your country, you deserve a home," said the younger McMillin, the company president. "When you get the opportunity to help someone in the military, it’s a very proud thing to do."
Corky McMillin, who died four years ago, started his home-building business in 1960. The company, which continues in the development business, recently was responsible for turning the old Naval Training Center into the Liberty Station housing-commercial center in Point Loma.

Real estate also appealed to Patrick Sr., who sold farmland and other property in Missouri, until cousin Corky asked him to come to San Diego in 1980. Patrick Jr. went to college in Arizona, where he worked for Lennar Homes and then its US Home division in San Diego, overseeing the construction of about 2,000 homes.

When father and son, who call themselves senior and junior for simplicity’s sake, formed McMillin Ventures last year, they didn’t intend to specialize in selling to veterans. But their projects are tailor-made for vets. They are affordable; they qualify for low-cost VA-insured loans, the only major loan program that does not require a down payment; and buyers do not have to wait for weeks for banks to decide if there’s a deal.

As it turns, most of the McMillins’ buyers have been veterans — eight of the 12 sales so far have gone to military personnel. And the McMillins like that, because their ancestors fought in America’s conflicts, going back to the Civil War. Besides, McMillin Sr. said, VA buyers are easy to work with: "VA loans are some of the smoothest transactions and sales we’ve had."
It’s anything but smooth sailing when it comes to turning a dilapidated house into someone’s dream house. The McMillins say they wait months for lender to approve a sale and then an average three months to complete the renovations. For that reason, McMillin Sr. asserted, "We aren’t flippers. We add value."   It’s not hard to see the increased value if you compare the before-and-after photos of some of homes rehabbed in the last 18 months.

When the McMillins acquire a foreclosed home, they expect to find missing appliances and fixtures, cracked slabs, illegal room additions, malfunctioning plumbing, outmoded electrical lines, weed-infested yards and irate neighbors.

"Sometimes the home’s doors won’t even close, the building is so unstable," McMillin Jr. said. "We look for the house in the worst condition and try to use our expertise to turn it into a great opportunity."  The vets don’t complain about the McMillin markup, because they don’t have to do the heavy lifting to revive these sorry properties.  "We got so lucky," said Sean Losee, 27, an Army veteran who served in Afghanistan, Iraq and Kosovo and now works at the Barona casino.  He and his wife Kierstin, 24, had seen dozens of foreclosed homes before buying a $220,000 house from McMillin Ventures in Santee.  "We never thought we could buy anything but a condo in Santee," Losee said.

When the McMillins bought the home on Mast Boulevard, they had jacked it up to replace the cracked concrete slab. The drywall was reattached and repaired, the popcorn-style ceiling surface removed. They upgraded the electrical service, laid new carpet, repainted the walls inside and out and landscaped the back yard.

Also in Santee, Marine Corps veteran Jeff Knox, 40, bought a McMillin home for $315,000 in August. He said it would have taken him years to do what the McMillins did in three months. "These guys bought a home I couldn’t fix," Knox said. "I could buy something for $250,000 and go room-to-room and redo each room. It really is a long, slow process." All he had to do was buy a refrigerator, move his things from storage and set up housekeeping for his partner Kristy Gray, 32, and his son Jacob, 15.  "I get to provide for my kid when, seven years ago, there wasn’t going to be anything for him," Knox said.

The McMillins have honed their buy-fix-sell process to a set routine. Their in-house scout, Travis Hudson, 27, who is married to McMillin Sr.’s daughter Sandra, identifies potential foreclosure and short-sale homes. McMillin Jr. assesses the cost of repairs and makes an offer to the bank. It can take months to hear back. When their offer is accepted, McMillin Sr., the company’s vice president, calls on four private investors — friends and associates he has worked with — to lend the funds necessary to cover the price, repairs and overhead.
Then a team of subcontractors gets to work demolishing, rebuilding and repairing. What they face is an extreme makeover challenge. On Wilfred Street in El Cajon, there was a house that had been vacant for a year.  "It stank. It was terrible, full of trash," McMillin Sr. recalled.  Over several months, workers replaced a leaking bathtub, missing fixtures, hardware and appliances; installed new copper plumbing; applied a fresh neutral color scheme (McMillin Jr.’s wife Allison prefers Frazee’s "Comfort Zone" gray paint); and finished it off with window blinds and screens. The landscaping went in late last month.

There’s one step the McMillins take that is unusual in the real estate business. They like to meet the potential buyers prior to signing a sales contract; realty agents usually handle that detail separately.  "It gets back to having a more personal relationship," McMillin Sr. said. "They know us and we know them, and since we do that, escrow goes smooth."