SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
The Market Has ChangedBlessed Are The Flexible....
Following are some of the strategies that are working at
GreenEarthEquities to Keep On Fixing Houses
Keep On Doing DEEP Energy Retrofits
Keep On Providing The American Dream Of Home Ownership& Keep On Saving The Planet
One House At a Time (Mission)
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Purchase PriceImprovements $
OccupantEnergy Retrofit
Carbon FootprintGreen JobsTax Base
Neighborhood
$70,000$10,000RenterZero
No ChangeZero
LoweredDragged Down
$70,000$50,000
New OwnerEverythingReduced
YesRaised
Lifted Up
The Flood of Cheap Flips (A) has created APPRAISAL Challenges for
Quality & Green projects (B)
House BHouse A
They Started Off The Same
Then Everything Changed
No Problem
SELLINGBut W
ill It
Appraise?
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
House BHouse A
The Success of Conventional Investors with their philosophy of minimal cosmetic
improvements (Lipstick on a Pig) has established an easy valuation technique
that can be used by uneducated or lazy appraisers,
(who dont know how or wont take the time to evaluate energy efficiency of a home)
The Success of A ... Is impacting B
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Cur
rent
Exa
mpl
es In
“M
y N
eigh
borh
ood”
Assuming we buy at 60 ... We
need to sell at 160. Not
difficult to add that
much value but difficult
to get appraisal
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Text
The Success??? of this type of investing gives the
Appraisers & Bankers the ammunition they need to protect the status quo and their jobs and minimize all improvements
that Energy Wise investors and homebuyers would like to bring: Less Carbon, More Green Jobs, Less Imported Oil, Higher Tax
Base, Improved Neighborhoods... Is anyone listening?
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
The Problem In A Nutshell1. Lipstick Flippers have been
too successful.
2. This has caused (lazy)appraisers to evaluate homes
based on these numbers.
3. This has made retail flips with DEEP Energy Retrofits
more difficult to sell at fair margins
Solutions?.......
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
#1 Sell Them Before They Are Done
This is a continuation of what we have been doing all along.
More than half of our projects have been sold before they
were complete.
I wish I could attribute this to the Energy Package, but it is
really a result of all 3 Packages ... And mainly the
WOW! Package
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
#1 Sell Them Before They Are Done
You can build a project and get a qualified buyer
to want to buy it for a fair price
BUT
Can you find an appraiser to appraise the home for
that price? ....
And If Not ... What Then?
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Sold Right But Appraised WrongOne Solution:
Example: You complete a project and have a buyer who would love to buy it for
your asking price of $160,000. Appraisal comes in at $145,000
One Solution:Lower the price to $145,000
Receive the additional $15,000 through a Personal Note*
(unsecured)
(This works best if the option is discussed with the buyer before the appraisal) Also 203K & EEM
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
#2 Sell Them Before You Buy ThemThis works well if buyers have seen your work (even photos of previous work plus a compelling presentation)
and know that’s what they want.
Get them pre-approved and use the 203K loan.
Property must appraise (physical inspection plus appraisal of the plans
and specifications)If it doesn’t appraise you can still use a Personal Note*
* Personal Note with UCC filing. May not be acceptable to Lender
#1. Find another Lender #1. Disclosure is always the best policy.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
#3 Dont Sell Them, Keep ThemNo Sale = No Appraisal
To Kill The SaleYou will soon run out of money
with this method so plan on:
CASH OUT RE-FI& Continuing Positive Cash Flow
At 60 to 80% of appraisal, these will return most of your invested
capital for further investment.
(Limited to 10 of these (FHA). Most lenders only allow 4)
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
#4. Partner With An Investor Who Wants A Long Term Green Investment With
Positive Cash Flow
This includes lots ofbenefits for the investor besides
positive cash flow (tax credits,
lower property taxes, etc)
SavingThe PlanetOne HouseAt 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 Use All The ProgramsSMUD, Redding & other cities, Utilities, PG&E, SCE & others HUD 203K Loans, EEM LoansCHF 0 or 3% Energy Loans, ECO Fund loans
Note: Most of these programs are designed for
HOMEOWNERS & BPI Contractors, Not Investors
$17K Total...Wow!= Flexibility Required
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
#6 Do A Little Less = (GEE Lite)YUCK!!!
This idea flies in the face of one of our favorite mantras: “Do Everything, Everytime”
Therefore we will look to other options first ... In order
to continue doing DEEPER Energy Retrofits.
And Stay More On Mission
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
But, If We Had To .....Options:
1. HVAC. Keep the Equipment. Seal, and add Return (s)
& Insulate Ducts.
2. Single Mini Split with bath fan powered jump ducts (25 SEER)
3. Re Weatherstrip Windows
4. Storm Windows
Never Ever EverSkip the Shell Seal, ever
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
More Than One Way.....
Stay “On Mission”
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Information at Zillow.com
This shows what we do and how our
projects are treated by the Algorithms
(This one appraised at $160,000)
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
3332 N Ezie
Same Neighborhood
Same Graph
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
5664 E Bernadine, Clovis, CA
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
145 Gettysburg,Clovis CA
Perfect “100K Spread”
Example
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Not Enough Spread
(paid too much, even after haircut
to 65)
Still A Great Deal For The County
...compare next door
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Purchase PriceImprovements $
OccupantEnergy Retrofit
Carbon FootprintGreen JobsTax Base
Neighborhood
$70,000$10,000RenterZero
No ChangeZero
LoweredDragged Down
$70,000$50,000
New OwnerEverythingReduced
YesRaised
Lifted Up
The Flood of Cheap Flips (A) has created APPRAISAL Challenges
for Quality & Green projects (B)
House BHouse A
They Started Off The Same
Then Everything Changed
No Problem
SELLING
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
House BHouse A
The Success of Conventional Investors with their philosophy of minimal cosmetic
improvements (Lipstick on a Pig) has established an easy valuation technique
that can be used by uneducated or lazy appraisers,
(who dont know how or wont take the time to evaluate energy efficiency of a home)
The Success of A ... Is impacting B
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Text
The Success??? of this type of investing gives the
Appraisers & Bankers the ammunition they need to protect the status quo and their jobs and minimize all improvements
that Energy Wise investors and homebuyers would like to bring: Less Carbon, More Green Jobs, Less Imported Oil, Higher Tax
Base, Improved Neighborhoods... Is anyone listening? (mayors,
governors, presidents, utilities?)
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Finding These Graphs On Zillow1. Put the address in the
Google Search Box.
2. Search for the Zillow entry from the choices. Click.
3. Dont go directly to Zillow and type the address in there.
That will lead you to a different set of data.
4. For the next address, go back to Google & Repeat.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
Q1. So, Why would you NOT
add Solar?
Q2. Which would save more, $17K of Solar,Or $17K of Home
Performance?
Q3. Which adds more comfort?
Q4. Which are Appraisers closer to
understanding?
Questions
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
“Better Than Break-Even”
Yahoo!!!
... But Will The Appraisers & Banks
Wake Up???
So Politely Put.....
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2010
The Following Is Not A Sales Pitch!
(But you can use it however you would like.)
So far, everyone who has heard this G.R.I.P. Presentation
has said, “Yes, that makes sense,
Let’s do it.”
Your mileage may vary.
Next Week:Complete Outline of GRIP
SavingThe PlanetOne HouseAt 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 ways to be in the Green Renovation
business in addition to the
standard Retail Flip
Next Week
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