Squeezing The “Spread” Pushing Final Sales Prices Down
Pushing Original Purchase Prices Up
Many REO’s have been bought and received “Lipstick On A Pig” = Low Prices for Comparables
Some Appraisers refuse to give full value to Green & Home Performance and Superior Renovations
Bought It $100,000 Target Spread Sold It Investors are beginning to trust the slow recovery & see that money can be made both Flipping and Buy and Hold
Banks Continue to hold properties that are in default, restricting the flow of foreclosures onto the market.
G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
With This Market Squeeze What Are Our Choices? 1. Perform Less Work, Join the Lipstick Flippers 2. Bail Out. Leave it to the government to fix our planet. 3. Move our investments to another area. (Indianapolis, Las Vegas, Atlanta etc) 4. Flex & change strategies to avoid being crushed in the squeeze G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Choices: 1. Perform Less Work, Join the Lipstick Flippers This just doesn’t fit if you really have a Green Heart and are committed to the mission G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Choices: 2. Bail Out. (Of Energy Wise Investing) Leave it to government & programs to fix our planet. Believe that the current round of stimulus, grants, rebates, programs and certifications are going to get a lot more efficient and generate more complete jobs.
???
And bring us to our 2030 Energy goals ??? G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Choices: 3. Move our investments to another area. (Indianapolis, Las Vegas, Atlanta etc) This is a viable option & allows us to stay on mission ... But only in those areas that we would work. To fix our own communities ... We must find a way to work in them G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
GreenEarthEquities Choice & New Direction For 2010 1. Shift emphasis from Exit Strategy #1 Retail Flip to Exit Strategy #8 “BRRR” (Buy, Renovate, Rent, ReFi) This is not a new strategy ... But making it Plan A instead of Plan B is new as we move into this new real estate market. (We will still Retail Flip select projects when we can) G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
Pros & Cons Of B R R R 1. We can build and sell for “Value” & Do The Right Thing & Stay On Mission Standard definition of value (not the definition used by appraisers or bankers) Value = The amount that a willing buyer & a willing seller agree upon Sounds logical, doesn’t it? Unfortunately, Home Performance, Energy & meeting Climate Goals is not part of the Bankers & Appraisers Agenda which actually hinders progress toward those goals. G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
Rent or Lease Option ... Continued This means our project does not need an appraisal in order to sell it right now. Rent and ReFinance With this choice we retain all the appreciation that may happen in the next few years. (but we do have rental issues, vacancies, damage, etc) G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Rent or Lease Option Lease Option Agree upon a fair selling price and a time to exercize the option ... 2,3,or 4 years. Property will need to meet appraisal for sale at that time. We have buyers with “ownership mentality” in the home.
G r e e n E a r t h E q u i t i e s . C o m
© 2010
Saving The Planet One House At A Time
Rent or Lease Option Either way, we refinance and have good cash flow. The refi has gotten us most or all of our cash back to continue our mission (but no profit, we have to wait for our profit) If profit is needed for monthly cash flow, working on the job remains as a source of cash. G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Go Net Zero With Solar PV Because our projects are already so tight, we can go to near net zero with a small Solar PV system. This is also facilitated by the lack of appraisal for sale. Over the next 2-4 years we will bank on the economy improving and appraisers catching up with the times and the needs of our planet. G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Financing Solar PV Financing Solar PV is difficult for a homeowner. Difficult for a contractor. But easy for an Investor who doesn’t have to meet an artificial appraisal number. When it is included in the ReFi, it is at the lowest rate available for 30 years. = much cheaper than consumer financing. Tenants are often willing to pay all or part of the additional costs. G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Financing Solar PV Tenants are often willing to pay all or part of the additional costs. Cost of PV System: $18,000 (gross, rebates and credits apply) Cost of $18,000 =$97 per month Most renters or lease optioners will agree to pay $50 if we will include Solar. (We are paying half of utilities already) G r e e n E a r t h E q u i t i e s . C o m
Š 2010
Saving The Planet One House At A Time
Fresno Market Last Week Following are the documents we used to go shopping in Fresno last week. We offered on these three properties plus one more All will fit into our 2011 BRRR strategy. G r e e n E a r t h E q u i t i e s . C o m
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
Saving The Planet One House At A Time
Watch for this clause.
G r e e n E a r t h E q u i t i e s . C o m
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
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
Š 2010
Saving The Planet One House At A Time