I have got it to work by redoing the export of as3 class from obj
file.
Couldnt get obj to load but who cares as I prefer AS3 class

    [Embed(source="images/aw_0.jpg")]             protected var
AS3Material:Class;
                protected var model:Mesh;
        ....
        var modelMaterial:BitmapMaterial =
                                new
BitmapMaterial(Cast.bitmap(AS3Material));
                                new BitmapMaterial(Cast.bitmap(AS3Material));

                        model = new House2( 1);
                        model.material = modelMaterial;
                        model.z = 100;
                        model.y-=100;
                        view.scene.addChild(model);

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