The “State Of The Idea” Mid-Term Message For a couple of months I’ve been sensing that it’s time to evaluate my progress in Energy Wise House Flipping...
Let’s Buy Ugly, Beat Up Houses, Green Them Up All Pretty...
Keep the Good, Throw out the not so good, Mid Course Corrections, Respond to Market Changes, etc G r e e n E a r t h E q u i t i e s . C o m
© 2009
And Sell Them For Fun and Profit (and research)
Saving The Planet One House At A Time
The Unexamined Idea Is Not Worth Pursuing (Socrates, modified by Dave) The “Mid Course Evaluation from several perspectives:
Sell Them Above Market Value, Improve the Neighborhood & the Planet
Have Fun, Experiment, Share The Wealth
1. The Market Has Changed 2. I have learned some things 3. Ten is a good number
G r e e n E a r t h E q u i t i e s . C o m
Š 2009
Saving The Planet One House At A Time
The Market Has Changed: What To Do About It? A year ago foreclosures were plentiful. Good deals were everywhere. The competition was afraid to act. Low offers were accepted and Haircuts were easy. Now, good deals are hard to find. Multiple offers way above full price come in on most properties. Competitors have regained confidence. Sadly, most of these are looking to put lipstick on a pig in quick flips or profit by turning our cities into rental zones. G r e e n E a r t h E q u i t i e s . C o m
Š 2009
Saving The Planet One House At A Time
The Market Has Changed: What To Do About It? The Banks have found it more expeditious to not actually go thru foreclosure on all their bad loans. They are dribbling only a few out on to the market, thus creating the “auction environment” and driving prices up on the ones they do sell.
G r e e n E a r t h E q u i t i e s . C o m
© 2009
Saving The Planet One House At A Time
If The Purchase $ Has Gone Up $20K, Shouldn’t The Sell $ Go Up The Same? If so, we could continue as usual with the formula intact, no modifications required. However In my market it seems that the purchase price has gone up about $20K but the sell price has only gone up $10K or less. These are my non-scientific observations but my realtor confirms the are close to accurate. G r e e n E a r t h E q u i t i e s . C o m
Š 2009
Saving The Planet One House At A Time
Why Hasn’t The Sale Price Followed?
1. The size of the pool of end line buyers has not changed. The amount of homes being put back on the market by the investors has greatly expanded. So it’s a “buyers market” 2. Most of these are either rentals or Lipstick on a Pig Quick Flips so the comps they provide are not very high. 3. This is a temporary situation. The Sales Price Saving The Planet will follow later after the market adjusts. One House G r e e n E a r t h E q u i t i e s . C o m
© 2009
At A Time
I’ve Learned Some Things Most of them, I already knew, I just thought maybe I could get away with breaking my own rules. Some of them are new.
Maybe I really can make this work with hourly employees. It’s easier and they’re nice guys...
The main rule I tried to break....
PS you dont have to learn this the hard way! G r e e n E a r t h E q u i t i e s . C o m
© 2009
Saving The Planet One House At A Time
Lessons From The First 10 1. No Hourly Labor. Use Subcontractor Only 2. Keep Your General Contractor Partner thinking like you with 2 techniques: A. Pay thru a profit split. B. Check Writing thru the project’s separate account. He spends. I watch thru electronic banking and fund when necessary. Check duplicates make accounting easy. G r e e n E a r t h E q u i t i e s . C o m
Š 2009
Saving The Planet One House At A Time
Lessons From The First 10 3. Wholesale Pricing from subs and suppliers. Always try to beat Home Depot. 4. Good Team of Independent Contractors. Mature, Grown Up Adults. Licensed & Insured. 5. Make a Budget & Stick with it.
G r e e n E a r t h E q u i t i e s . C o m
Š 2009
Saving The Planet One House At A Time
With The Market Changes... Is Energy Wise House Flipping Still A Good Idea?
YES!!! Maybe Even Better!
It will just take a few adjustments to the formula: I signed an offer and sent it off tonight. It felt good to be back on the hunt! Here’s My Plan... G r e e n E a r t h E q u i t i e s . C o m
Š 2009
Saving The Planet One House At A Time
Q. How Could It Get Any Better? A. With the boatloads of money coming down the pipeline there will be opportunities like never before.
I’ll be watching this closely & may use some of it.
Be Careful. It’s hard to stand out & command a premium when you’re running with the pack!
FREE Money Never Is.
Note: Other Personality Types may be more suited to paperwork G r e e n E a r t h E q u i t i e s . C o m
© 2009
Saving The Planet One House At A Time
My Plan In This Over Heated Market Assume: I was looking for $100K spread from buy to sell. Assume: I can now get only $90 in the overheated market. I am unwilling to give up my $20 I am unwilling to compromise on the Energy Package.
20-20-20-20-20 Review $20k Energy Package $20K Wow! Package $20K Done! Package $20K Soft Costs $20K Profit
Something’s gotta give... At least three things can be squeezed. G r e e n E a r t h E q u i t i e s . C o m
Š 2009
Saving The Planet One House At A Time
Plan For Overheated Market 1. Reduce the Done (landscape front yard only, etc) 2. Reduce the Wow! (less crown molding, 4 lb pad) Reduce the Soft Costs (sell them myself, finish faster, reduce carry costs)
20-20-20-20-20 Review $20k Energy Package $20K Wow! Package $20K Done! Package $20K Soft Costs $20K Profit
This could add up to $20-30K saved! I only needed to make up $10K. What to do with all these “excess savings?” G r e e n E a r t h E q u i t i e s . C o m
© 2009
Saving The Planet One House At A Time
It’s A Perfect Time For A.... Zero Energy House. With the savings from tightening the belt in the Done, Wow & Soft Costs, There will be enough left over to Increase The EnergyPackage* & Add Solar (PV & Hot Water) = Net Zero Energy Actually we will only target close to Net Zero (maybe a $5-15 utility bill?) G r e e n E a r t h E q u i t i e s . C o m
0% Yahoo! This Is Going To Be Fun! © 2009
Saving The Planet One House At A Time
1. South Facing Roof without big tree shade problems. 2. Some Re-Usable Items to keep the cost down. Not quite as trashed as I used to look for.
0%
3. Worn Out T-1-11 Siding is excellent. Perfect candidate for new insulation and stucco. 4. Built in the 80’s avoids the new lead regulations.
Yahoo! This Is Going To Be Fun!
G r e e n E a r t h E q u i t i e s . C o m
© 2009
If Zero Energy Renovations Interest You, Join Rogelio and I at the Zero Energy PG&E class on July 20th in Auburn
The Perfect Candidate For Zero Energy House Renovation
Saving The Planet One House At A Time
Ten Is A Good Round Number A Good Time To Evaluate #10 is finishing up right now. It will be done in about 2 weeks. It has a South Facing Roof and we are pretty close to our target budget. So I think we’ll just make the jump and add Solar. I’m getting quotes now. The Energy Package already includes most everything else required for Zero Energy Houses
Q. If this works for me, Why cant it work for a Few million more Foreclosed homes? A.__________ Saving
G r e e n E a r t h E q u i t i e s . C o m
Stay Tuned... © 2009
The Planet One House At A Time
Mid Term Summary 1. I’m not making as much as the TV House Flippers BUT It’s 6 figures & more than I made Contracting... 2. I LOVE the Freedom that Energy Wise House Flipping Provides. 3. Green Jobs, Community Improvement, Carbon Footprint, All Good. 4. Great opportunity to experiment and be a leader in Home Performance, Ducted Mini Split etc 5. I love America, where I can do this. 6. I’m still building the Army. Are you ready? G r e e n E a r t h E q u i t i e s . C o m
© 2009
Saving The Planet One House At A Time