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Observation from 30 years contracting: Full Energy packages don’t sell easily by themselves
Original Hypotheses:
Full packages will sell if combined with Wow! Remodeling.
30 month test results
1. 12 foreclosures purchased, renovated & sold2. Sold at $20,000 above Market Comps
3. 6 were sold before completion4. 25 - 50% Energy Savings
5. No Programs, Just Free Enterprise
The Wow! Package 1. Granite Counters at Kitchen & Baths
2. Extra Deep Stainless Steel Sink3. Designer Spray Faucet
4. Italian glass tile backsplash5. Under Counter Lighting
6. All wood Cabinetry7. Crown Molding and Tall Baseboard
8. All new interior doors and trim9. New Front Door with Art Glass
10. Tile & Travertine floors11. Engineered Wood Laminate Floors12. Designer tile and faucets at baths
13. Chair Rail, , Wainscoating & 3 tone paint14. Designer Light fixtures & ceiling fans
Include This,
The Three
PackageSystem
The Done! Package 1. New Front and Back Lawn
2. Automatic Sprinklers with timer3. New 30 - 50 year roof
4. New Roll-up Garage Door with Openers5. Gutters
6. New 2 inch faux wood blinds7. Major Professional Tree Trimming
8. Sewer line renovated as necessasry9. All new oil rubbed bronze hardware
10. New Energy Star Appliances with Warrantees11. New Windows and HVAC with Warrantees
12. Upgraded Carpet with 6 lb pad 13. Deciduous Trees placed for Energy Efficiency
And This,
The Energy! Package 1. New HVAC system, Stainless Steel Heat Exchanger
2. Manual J sizing, usually half of previous capacity3. New R-8 short mylar ducts partially buried
4. Manual D with tight seal and test5. Extra Return Duct in Master Suite
6. New LoE2 windows and Patio Doors7. Low E 140 at west windows
8. Deciduous Trees planted selectively9. Shell Sealing of floor & ceiling with test
10. Attic Insulation to R-50 11. Occupancy sensors
12. Gas Stove and Dryer options13. Ceiling Fans at all sleeping and living rooms
14. Panasonic Ventilation with controls
So we can
Sell all this
Everytime
SavingThe PlanetOne House
At A Time G r e e n E a r t h E q u i t i e s . C o m © 2009
Like Feeding A Pill To A Dog Everything Green and
Energy Efficient
is the Pill.
The Granite Counters
and Travertine is the
Dog Food. ... Dont try it
without the Dog Food!
W4
The Homeowner Wins With Lower Bills and Increased Comfort
The Community Wins With New Jobs,
More Home Ownership & Increased Property Values
The Planet Wins With Less Carbon
Emissions
The Investor Wins And Gets To Keep
A Little Green
HomeOwner
Community
The Planet
Energy-Wise Renovator
A True Win,Win,Win,Win Strategy!
Features In All Projects: Low E2 windows R-50 Insulation New HVAC systemR-8 Ducts, sealed & tested Complete Shell SealingMore…(see Energy Package)
How Green Is Really Sold
Oh, Honey,I love it!
Let’s buy this one....
Well, they have those Energy Stars and the carpet
is made out of recycled Pepsi bottles so I guess we
might as well...
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m
We buy Ugly Houses
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m
The more vandalism, The better (the price)
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m
Not too smart taggerBurt couldn’t say much in court
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m
Deferred Maintenance12
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
5 Olympic Rings - All Important
1. Buy it right2. Design it right3. Build it right
4. Market it right5. Sell it right
All are important. Do them all and keep some gold! Missing any of these can be expensive.
The Art is knowingWhen to hold ‘emWhen to fold ‘em
The “Cliff’s Notes” Formula For The 3 Package System
The Energy Package $20,000 (hard cost)
The Wow! Package $20,000
The Done Package $20,000
Soft Costs $20,000
Profit $20,000
Total Buy-Sell Spread $100,000
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
WSJ.com Sept 24, 2009
The Foreclosure Pain May Drag on for Years By James R. Hagerty
Delays in dealing with home foreclosures are stretching out the pain for the U.S. housing market, as we reported in Wednesday’s Journal. That has stirred lots of debate over whether it is better for the nation to face the pain of millions of foreclosures immediately – to get it over with fast — or to draw the process out over several years in hopes that the economy and housing demand will recover.
It looks like we’re taking the latter course, for better or worse.
The foreclosure process takes about twice as long as it used to for a variety of reasons, including efforts to modify loans to keep borrowers in homes, staffing shortages at loan servicers, bankruptcy filings and a “strategic rationale” by lenders hoping that home prices will recover, .......
Henry Fishkind, an Orlando-based housing economist, says some banks tell him they “are holding back [foreclosed-home] inventory” to avoid depressing prices any more than necessary. “It’s in their interest” to avoid flooding the market, and regulators haven’t forced them to do so, he says. That suggests that the backlog of homes headed for foreclosure will be stretched out over several years. That will be less disruptive to the housing market, Dr. Fishkind says but may mean that it takes longer for financial institutions to shed dud assets and regain the health required to extend new credit.
In some of the former bubble markets, including Florida, (& California, adds DJR) the problem will be aggravated by looming defaults on option adjustable-rate mortgages ............
Is This Glass Half Full or Half Empty?
Why Green Renovation Of Foreclosed Homes Will Be A Good Business Model For Years To Come
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Remodeling
Green & Building
Performance Real
Estate
3 Disciplines
1Sweet Spot&
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Deliver More For Less?
Delivering More For Less:
A violation of the Second Law of
Thermodynamics
Or a Crazy Sales Pitch? Or?
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m
Cost & Benefit Analysis Marketing To Acquire Customer 25% 10,000
Sales Commission 10% 4,000
Premium for Occupied Working 10% 4,000
Overhead & Profit 30% 12,000
Contracted Work 10,000
Total Contract 40,000 40,000
Marketing To Acquire Customer 2% 800
Sales Commission (pro-rata) 10% 4,000
Premium for Occupied Working 0 0
Overhead & Profit 30% 12,000
Contracted Work 23,200
Total Contract 40,000 40,000
Conventioal Contracting To Residential Customer
Energy-Wise Renovation of Foreclosure by Investor
Marketing To Acquire Customer 25% 10,000
Sales Commission 10% 4,000
Premium for Occupied Working 10% 4,000
Overhead & Profit 30% 12,000
Contracted Work 10,000
Total Contract 40,000 40,000
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Target House Specs
1. 3 or 4 Bedrooms(2 Bedrooms wont have
the “spread” you are looking for
2. 2 Baths(1 Baths wont have the
spread or the quick sale)
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Target House Specs 3. 30 to 50 year old Tract Homes(Older will have more difficult
problems, Newer wont have enough problems for you to build value and
deserve your price)
Before
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Target House Specs
4. 1000 to 1500 sq ft
5. Pools are OK(most investors dont like them = better
deals)
6. The more beat up the better (for you)
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Target House Specs
7. The “Worst house on a good block” is a good thing
to look for
One or two Board ups Is good.
More is suspect
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Define Your Buyer
First Time Buyer.
Hopefully FHA
Priced where payments will be only a little more than rent.
=$150K to $250KSell price
ForeclosureRadar.com estimates rentsRentometer.com publishes exact rents
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
“Naked” Capitalism? 1. Minimum Government
Involvement.2. Minimum Program Involvement.
3. Use All “Wholesale” Vendors and Suppliers
4. Minimize Overhead 5. Focus On Adding Hard Value.
6. Find Your Own Money.7. Find Your Own Buyers.
8. Buy Smart
Stay NIMBLE!
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Why Is A Green Heart Necessary?
Disclosure: You need a “Higher Calling” to stay the course when you could make more money faster
with less effort if you just did “Lipstick On A Pig”
Full Disclosure: In other words. I make less money,
and put in more effort and it takes longer
than the TV show flippers who have raised putting Lipstick on a Pig
to an art form.
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
At ACI ’09 There Was A Big Focus on Mini Splits Charles and Dave discussed it in
the airport on the way home. When the wheels touched down in Fresno, I stopped production of the conventional system and arranged to meet Gary on the job the next day. We designed a hybrid mini
split system with ductwork that we now use on
all of our projects.
The Concealed Unit = Key To Acceptance In US Market
The small ducts feed the bedrooms and bathrooms
A lowered ceiling will be installed when the ductwork
is complete.
All the ductwork is within the building envelope and
covered by R-55 insulation = No duct loss!
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
ERV & Mini Split (typical)
Panasonic ERVFujitsu Indoor
Unit Wall Mounted
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
ERV & Concealed Unit Of Fujitsu Mini Split
Panasonic “Spot ERV”This unit
delivers fresh air all to this
spot. Circulation from both zones is
required to distribute the
fresh air. Not A
Problem.
Concealed Unit &
Ductwork is above this lowered ceiling
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Panasonic ERV For $300 materials and $300
install, why would we not give our clients clean fresh air?
For some reason new home builders have resisted all the
way till this year.
A sad commentary, which indicates that contractors need
regulation ..... Or the buying public needs to wake up,
get educated and DEMAND better building
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Mini Split Concealed Unit Before It Got Concealed
Mini Split Ducts should be as
short and straight and smooth
as possible.
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Mini Split - Air Velocity The moving
dampers, easily throw the air 18 fee across
the space.
This is a good application for
open space floor plans.
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Confirming Velocity and Adjusting Dampers.
In this application, the dampers will be
adjusted for balance and locked in place before the ceiling is
installed.
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Hard Pipe With Smooth Transitions
Smooth Square to Round Transitions and straight runs create the least
static pressure and make this system work better
than we expected. It’s old school work and many HVAC installers
dont have the knowledge or tools to do it. It pays to ask.
CondensateDrain
Freon Lines
Dampers
Transitions
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Why We Prefer Roof Mounts 1. Avoid Theft
2. Avoid kids & sticks = Back Yard Blender
3. Avoid Lawnmower rocks4. Avoid dogs confusing them
with fire hydrants5. Shorter Freon run
6. Less elevation change7. = More energy efficient8. Save space in side yard.
9. Quieter. Noise goes up.
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Mini Split Using Flex Ductwork This is not as efficient as
1. Indoor Unit on the Wall2. Ductwork in the Conditioned Space
3. Hard Pipe Ductwork.
But it works in a very tight envelope with a low load.
(Not recommended without the tight envelope and good
insulation)
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Mini Split Using Flex The entire unit is wrapped
in additional FSK insulation. This would be skipped by normal HVAC
Contractors.
The envelope and insulation is so efficient
that the customer rarely turns on the
bedroom zone.
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
One Way To Mount Mini Split Concealed Units.
Two Concealed
Units Sharing a large 20” x
30” Filter Return Box
(You wont see this anywhere else... Trade Secrets Revealed? Or just big
boys havin’ fun with the toys?)
Ducts to Living Area go
this way
Ducts to Bedrooms go
this way
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Looking Up At 2 Concealed Units Sharing a 20x30 Filter Grille & Access
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Details On Test Home #1 1200 sq ft 3 bed, 2 bath
Attic R-55 Leakage .5 cfm / sq ft floorVent Panasonic ERV 40 cfm
Walls R-16 with 1” rigidWindows U 30
< 10 sq ft Western exposureFujitsu 2 ton MiniSplit on roof
1 12,000 btu wall mount1 12,000 Btu concealed unitHard pipe in lowered hall
H2O & stove - Natural GasOccupants = Couple + Newborn (First Home) One House At A Time
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Results: 13 Months Later Bill Date Elec Use Elec $ Gas Therm Gas $ Total $
Feb 4, 2011 590 $72.34 23.0 $24.91 $97.25Jan 5, 2011 583 $69.66 18.0 $19.14 $88.80Dec 7, 2010 563 $66.99 23.0 $23.45 $90.44Nov 4, 2010 328 $39.03 14.0 $15.79 $54.82Oct 6, 2010 481 $57.24 12.0 $13.82 $71.06Sep 5, 2010 480 $57.12 10.0 $11.67 $68.79Aug 5, 2010 458 $54.50 9.0 $9.90 $64.40Jul 7, 2010 375 $44.63 10.0 $10.65 $55.28Jun 6, 2010 284 $33.79 14.0 $14.48 $48.27May 6, 2010 297 $24.76 16.0 $14.08 $38.84Apr 7, 2010 347 $28.93 21.0 $17.41 $46.34Mar 7, 2010 388 $32.34 20.0 $17.41 $49.75Feb 4, 2010 283 $23.59 18.0 $15.31 $38.90
Hot Fresno
Summer
Note: This wont work without a good envelope
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Comparing 2 GEE Projects
Month MS HP Test 1 Contol 1*
Oct $57.24 71.15Sept $57.12 109.97Aug $54.50 112.77Jul $44.63 109.32Jun $33.79 40.36May $24.76 43.70
Total-> $272.04 487.27
1200 sq ft 3 bed, 2 bathAttic R-55
Leakage 1 cfm / sq ft floorVent Bath Fans Only
Walls R-11, no rigid ins addedWindows U 30
< 15 sq ft Western exposureRheem 2 ton package on roof
(13 SEER 80% furnace)Flex R-8 Ducts in Attic, Man D
H2O & stove - Natural GasOccupants = Couple + Newborn
Very Similar - Some Differences
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Trojan Horse Remodeling How Much Energy Savings Can We Hide In The Trojan Horse?
R-55 Attic,Tight Shell Seal,U 30 Windows,
Mini Split With DuctsE-Star Appliances & Lites
ERV.... Yes, for sure.
How About Solar PV
?
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
We Morphed! We’ll still do the
three packages ... But
We’re going to Zero with
Solar PV!
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Room For Improvement 1. Real Estate Appraisal
Train Appraisers in valuation of Home Performance
2. Stop penalizing Investors. Give them at least the same incentives
as homeowners.(Solar Tax Credit etc)
3. Utilities make available Neighborhood Average Bills. More
granular than Zip Code, perhaps 1/4 mile radius.
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Room For Improvement Create a “Pay For
Performance” Incentive Program paid out 12 months after completion based on
Utility Bills.
Benefit: Zero Overhead and Real Performance. No
Modeling or Ratings or Third Parties required. Only
Performance is rewarded.
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Marty, This could be
bigger than the flux capacitor.
If we combine the free enterprise gene with a green heart ... these people really
can save the planet!
Saving The Planet One House At A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Thank You! That was a lot in
a short time
If you missed a point or 2, It’s all at:
GreenEarthEquities.com In the
PlanetSavers University
(Email for downloadable copies)
In The Energy Wise Renovating Army!
Dave@GreenEarthEquities.com
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