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Hypothetical Remodel file:///C:/Users/momma/Downloads/Hypothetical%20Remodel-%20Bu...

How to Buy and Existing Home in Houston, Renovate it Green

By: Stephanie Edwards-Musa Realtor and Certified EcoBroker-
And Help From: Clayton Farmer-Alternative Power Solutions, Grace Coffman- Grace Coffman Designs,
Michael Strong- Brothers Strong Remodeling and Christine Wilson with Prime Lending.

Starting Out: What is this all about?

It is so amazing that people I work with are looking to buy homes that are as green as possible. However,
there seems to be more of a consumer demand than homes on the ground ready to go right now. So in the
beginning with clients there seems to be some frustration as to what really is green. On top of that, the homes
that are built green right now may not be in a location that one is looking or even with the features they want.

The misconception is that one must purchase a 'new' home or one that has been all decked out be Green. When you think about it, how Green is it to tear down a home and send the debris to a
landfill? How about the Reuse side of Green? Why not take a nice home in a great location and make it

Buying a home as a tear down to build is a great option but unfortunately it can take the price of a home well
outside of the price range for some buyers or maybe one needs to move quickly. To buy a new Green home
inside the loop may limit you to a 3 story town home which some may not be physically able to buy or want.

Are there options to buy an existing home to make it Green? Absolutely. You do not have to have
thousands of dollars in cash or sacrifice living in the home when it is not up to par.

The Hypothetical Remodel Series is about just this topic. It is about opening doors for Home buyers to go
Green in Houston and to point out all of the tools available to you. This will likely be an ongoing and never
ending series of posts, but here is what we will go over:

Energy Audits- How they can help you buy the right home
Mortgages- How to find the right home and have your GREEN Improvements rolled in to it so that
you can move in to your GREEN home ASAP
ASID and USGBC ReGreen Program- LEED Remodeling guidelines that can take the most
Environmentally UnFriendly and Unhealthy home to a dark shade of Green at LEED guidelines and
what the process entails
Different Products- What products can help get your older home GREEN
Pricing- There will be information on how I look at the price of a property to make sure that you do
not over improve and what improvements will likely improve your property value

I have gathered the top GREEN Experts around town to help out with this. We are using real homes, real
comps and real designs to use as an example. Some of the examples will not actually have any work done but
it will show how to find the home, what the process is to figure out what improvements you want to make and
what the mortgage would be afterwards. The first one lined up will be a Bathroom Remodel with Energy
Efficiency in mind as well.

Part 2- The Math Behind Making it Green in Houston

Let's get down to the details of Buying an Existing Non-Green Home and making it Green in Houston. It's
all about keeping an open mind and checking out all of the options available to get what you want.

Typically most home buyers have only a certain amount of money when they start looking for a home.

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Whether it be that they are going to pay cash or get a mortgage, there is only so much that a typical home
buyer can do. I touched on the topic of minimal options available when buying Green in Houston right now
and how many of the 'Green' built homes inside the loop, or outside for that matter, are town homes and
condos. Well, that doesn't appeal to everyone.

For the sake of this part of the Series let's say that the home buyer does not want to go over $400,000 and
wants to stay around 2300 sq ft or so.

I have had clients that want room for Gardens, Composting Pits- Others just may not physically be able to buy
a home with an extensive amount of stairs for one reason or another. Then some decide to build Green. Why
not LEED?

Well, unless you have a lot already to use this can add up. I am sticking with near Downtown because
location seems to be an issue with many buyers today. Let's say that you purchase a lot in an area/location
that you like with an existing home on it. It's an older home, possibly built in 1920 or so, and selling for lot
value only. This will likely still run you a minimum of about $125,000 in many areas. You Demolish the
home (or deconstruct if you want to be a darker shade of Green) and design your 2300 sq ft home- The home
can then cost, if built LEED, over $415,000. By the time it is all said and done the realistic cost of building
with land included could cost about $600,000. Depending on the area it could be over $700,000.

But this home buyer can not go over $400,000.

This is where I personally would recommend to one of my clients to consider an older home to fix up but it
can be hard to have the vision of the home being 'Green'. So let's consider this: (location only for example)

How about a great area near I-10 and Kirkwood that is really close to work? About 10 minutes away. We
find a nice single story home on a large lot that has great solar orientation for both Solar if you want it and
an Organic Garden. Wonderful Trees, nice Community feel, It's the size you want- 2300 sq. ft. and the list
price is about $326,600! Well under your mark of where you want to be. The kitchen is updated, gorgeous
actually, with Stainless Steel Appliances (all Energy Star). It has double pane windows already, great
bedroom sizes, the flooring is beautiful and what you want. But the Master Bathroom is way too small,
somewhat outdated and the home is not Energy Efficient.

That's ok!

The sold comparable properties in this neighborhood for this size could sell anywhere from $275,000 to
$450,000 depending on the condition and how much updating has been done. With the home we are
considering at $326,600 is far from being at the top of the comparables. How much would that LEED
ReGreen Bathroom Remodel cost? How about a ReGreen Energy Remodel to finish it up?

With this scenario you would have $75,000 to play with to make this home Green and stay within your
budget or atleast $125,000 to play with to stay within the comparable prices for the community. That is a
whole lot of work that could be done, and some nice work at that.

The only other question right now you may be asking is "Do I have to have that kind of cash to make this

8o. Not at all. What if you could do the work that you want done to the home before you move in or shortly
there after, still have your Conventional Loan with 5% down and a somewhat competitive interest rate along
with that?

The rest of this series will walk us through how to get a Mortgage WITH the Green Remodel calculated in to

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it, bidding the work out, getting the design done AND how to have this work done PRIOR to moving in or
very shortly there after. Part 3 will discuss the mortgage product that has been around for many years...and is
still out there today.

How does it sound so far?

Part 3- What is a Green Renovation Mortgage?

So we know what to expect what is next? Hypothetical Remodel Series we laid the ground work at what to
expect. We are taking a home and showing how, in Houston, you can buy an existing home and Renovate
it to be Green to stay within your desired price range. Sometimes buying a New Construction home will
either not get you the location, style or price range that you want.

I left off talking about how to Finance the home that you are buying and finally found a phenomenal
Mortgage Company that offers a wide variety of Renovation Loans. Typically in the past, these kind of loans
appealed to Investors but now is making its way down to everyone. This is because you buy the home and
finance your Home Improvements all in one loan.

Back to the example of the Hypothetical Remodel. We talked about how the proposed home was listed at
$326,600 and it would likely take about $75,000 to get the home to where you want it. The loans that I
mention above are Perfect! Many people have heard of the FHA 203K loans, but this example is outside of
the FHA limits in Houston. It will take a conventional loan.

Before we lay out the examples and how the Renovations will look I wanted to lay out the Highlights of this
loan first. Here is what to expect with Prime Lending's Purchase Plus Program aka. conventional
renovation loan:

As little as 5% down at closing and Seller's are allowed to pay some towards closing costs
If you are going GREEN there is no $100,000 cap on the Renovations
The Renovations on this loan are open to everything BUT Roof, Foundation and Septic Systems
The home is appraised at AFTER Renovation Value
The contractor, bids, design, etc. are already figured out PRIOR to closing
The money for Renovation is then added to your mortgage (Ex. $325K + $75K = $400K)
Typically the lender requests that the work be completed within 60 Days-Preferably less
You can even add Square Footage to the rooms such as additional Bedrooms
The credit requirement is typically about 620 and higher

So pretty much, everything goes. Literally you could add windows, new A/C, tankless hot water heater,
Solar Panels Galore, Completely Renovate the kitchen-master bathroom-powder bathrooms- whatever your
heart desires and still get your 5% down in most cases. These can also be mixed up to 80-15-5, etc.

For the duration of the Hypothetical Remodel Series we will get in to how much the Renovation will
cost, what is being changed (including the 50% reduction in energy usage and ReGreen Master Bathroom
Remodel) and finally at the end how much (approximately) the Mortgage Payment would be by using this
kind of loan.

Christine Wilson with Prime Lending. is where to go if you are needing something like this. They are the
only lender to date, in Texas, that I have found offering these amazing programs.

Christine Wilson/Kelly Duff
Phone: 214-563-5645/469-388-7126

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Website for more information here also

Quick Disclaimer: Although the mortgage program mentioned in the article
below will be available to many people and is very open to different items-
Like all mortgage programs the TRUE numbers and availability will depend on
the Borrowers specific situation regarding credit, income and all of the
other items that come in to play when getting a mortgage. Please note that
if you are wanting information specific to your needs that I recommend you
contacting the mortgage contact listed to find out today's rates vs. your
situation. Also one small note, the Purchase Plus (Renovation) Program
discussed specifically in the article is currently only available in the
State of Texas with Prime Lending.

Part 4- The Energy Audit- What is +eeded to reduce the Home's Energy Usage by 50%

Now that we know how to finance a Green Remodel or a Home to Remodel Green, we need to see how we go
about Greening up this home. The example used was:

2300 sq ft home
Built around 1959 or so
Cosmetic upgrades have been made and windows replaced to Double Pane

One of the goals on this one is to, in the end, reduce the Energy Usage of this home by 50%- In order to do
that we have to know exactly how the home is performing and the easiest and most accurate way to do that is
through an Energy Audit. There are a handful of different kinds of audits that can be performed- The most
common being a Visual Inspection with Thermography. The Infrared Camera can detect Heat, Moisture,
Cool Air, etc. In other words, it can see behind sheetrock and ceilings what we can not. Now, keep in mind
that we used an actual home for this experiment where Alternative Power Solutions went out to perform an
actual Energy Audit for us. During the audit, this is what they looked at:

Level of Insulation in both the walls and attic

Size and Efficiency of the Heat and A/C
Made sure that the Double Pane windows were the proper ones for the Southern Region
Scanned over vents and lighting for air leaks
Visual on other areas that promote Air to leak or otherwise be where it probably shouldn't

Here are a couple of the pictures taken:

In the one picture we can see the Canned Light in the Ceiling. With the discoloration around it, we see that
the insulation in the attic above the ceiling is inconsistent which can sometimes cause some rooms to be
hotter or colder than others. Something else to consider about Canned Lights is that other than the newer
Energy Star ones they do not seal at the ceiling allowing for hot air from the attic to infiltrate to the living
space below. The next picture shows inconsistent insulation in the ceiling around an a/c and heat vent.
You will also notice the really dark area- this is air blowing. It appears that there may be an issue here as well

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with air leaking from around the register. Simple caulk around the top to seal it would work on that. After a
good hour or longer of walking around the home and looking at everything that directly or indirectly affects
Energy Efficiency there was a list of items in the home that would need some attention to achieve the goal of
50% reduction.

The HVAC system was over sized and should be updated to a higher efficiency
The Ductwork in the attic needed to be changed and upgraded
There was a need for added insulation in the attic
Radiant Barrier needed to be applied to the roof decking

All of this will be priced out along with the Master Bathroom Remodel to the USGBC/ASID ReGreen
Guidelines so that it can all be rolled in with the original loan buying the home. Next part of the series we
will discuss the Master Bathroom. We will enlarge it from its current size and update it in the most
Environmentally Responsible way possible.

Part 5- Let's Get that Master Bathroom Bigger, Greener and Updated!

Now we have the Energy Audit out of the way, we can look to see what it is going to take to make the Master
Bathroom a little bigger and to get it updated to what you want. Let's take a moment to remember what we are
working with.

The 2300 sq ft home built in 1959 with a Master Bedroom that is a pretty good size but the Master Bath is
pretty small with poor ventilation. Well, that's nothing that can't be fixed, right?

As part of this Hypothetical Remodel we called out Designer Grace Coffman with Grace Coffman Designs
and Michael Strong with Award Winning Brothers Strong Remodeling. Both of these Professionals are
HIGHLY knowledgeable with the USGBC and ASID ReGreen Remodeling Guidelines to make
Renovations as Environmentally Responsible as possible without sacrificing quality, comfort and Dazzle!

Here are some before photos of what we saw when we arrived:

In the one photo we have the Vanity area that adjoins the Master Bedroom and enters to the Bathroom on the
left. Then we enter the Bathroom that has a very clean look, two sinks great cabinets, etc. but lets see what it
would take to make it a little bigger and green it up a little bit. What Grace and Michael thought would be a
good idea was to combine the vanity area with the Bathroom in to one larger area.

They rolled around some ideas, did some measurements, spoke with the Homeowners and then were off to do
their magic. Below are the proposed designs that Grace came up with:

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I placed a red arrow where the Vanity outside of the Master Bathroom used to be. Above is a suggestion to
enclose the area, keep the Double sinks and place a linen closet where the Vanity used to be. Below are
some more detailed renderings of what the vision is. Notice the details of lighting, water fixtures and
cabinetry that updates the room.

8ow for another view of what could happen:

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Above is the suggestion to close in the area but only have one sink in the large area and place the second
sink where the vanity used to be. Below are the detailed renderings again updating the area.

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All of these are great recommendations! Now, what about some of the materials going in to the renovation:

Energy Star Rated Ventilation Fan

IceStone Countertops
Low and Zero VOC Paints and Primers
Pleated Media filter put in to HVAC for healthier air
Locally Manufactured and/or Recycled Glass tile blocks for the shower
Water Efficient Fixtures
Sun Tunnel in the Shower for maximum lighting

That is just a little bit of what would have to go in to this remodel. There is quite a bit of work with tearing
out and rebuilding and even more to take in to consideration to maximize Energy Efficiency, Water
Efficiency and other Environmentally Responsible features. Next on the list, Cost! Not only what will it
cost to do this massive renovation- But remember, we are rolling this in to a mortgage. Let's see what this
would work out to be as an approximate Monthly Payment!

Part 6- Finally! What Will all of this Cost Me Per Month on My Mortgage!?

From finding the right home, qualifying for a 'Green' Renovation Mortgage, Energy Audit and Remodel
Design we have almost worked our way through the one example of buying an older home to Renovate

Which brings us to this one. Once we have our plans on paper as to what we are going to do with our older
home once we buy it, what is it going to cost me per month once I own the house? First, we need to find
out what the Energy and Master Bathroom Remodel is going to cost:

The 50% Reduction in Energy Usage included:

New A/C Ducts in the Attic that are insulated and leak less than 5%
18 SEER variable speed HVAC system that is properly sized
Spray on Radiant Barrier and Blown in R-30 Cellulose Insulation

Total Cost for the Energy Remodel is ~$25,787.90~

The Updated and Larger Master Bathroom just to name a few included:

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Energy Star Rated Ventilation Fan

IceStone Countertops
Low and Zero VOC Paints and Primers
Pleated Media filter put in to HVAC for healthier air
Locally Manufactured and/or Recycled Glass tile blocks for the shower
Water Efficient Fixtures
Sun Tunnel in the Shower for maximum lighting

Total Cost of the Master Bathroom Renovation is ~$36,192.36~

Total Cost of the two together is ~$61,980.26~ The entire Scope of Work is below for your to review and
find out exactly is involved in both of these jobs.

Now we have to add all of this in with the Sale Price of the home. The list price of the home was $326,600
and simply as an example we used a Sales Price of ~$323,000~

In order to find out what our total monthly payment will be, we combine the two amounts for a Final Sales
amount of ~$384,980~

So we take the $384,980 -

5% Down for a Loan Amount of $365,731

5 1/2% interest on a 30 yr FIXED loan
Makes a Principal and Interest payment each month of $2076.58
With Taxes and Insurance Escrowed your payment would be $3399.78

Wow! We did it! We found that Single Story home, the perfect size, great floorplan, Awesome location and
now have it exactly the way you wanted AND within your price range! We 'Greened' it up a little- Reduced
the Energy Usage by 50% so that you can benefit from lower Utility Bills! This all took the Approximate
Down Payment of $19,251 when you went to closing.

It is really that easy! We do not have to try and find the Pristine Green Home that you are looking for- We can
find a home that is exactly what you want, minus the Green and it would likely be more within your budget
anyhow! So, let's keep an open mind and have some Fun with our imagination when we go look for
that Green Home! The opportunity to find an older home to green up later will make it more of your
own with the features that appeal specifically to your wants and needs.

And now, as promised, here is the Full Scope of Work for all of the Renovation that was Cost out during this

To View the Entire Scope of Work just visit this website:

To Wrap it up, Thank you!

If you follow we will have more examples like this in the future on how to
take and existing home to green up and other Green Building Programs and try to un-muddy the water a little

Stephanie Edwards-Musa
Realtor, Certified EcoBroker

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I would like to say Thank You to everyone that helped me out with this project. I was responsible to handling
the actual Comparables and search for the property and below are props to everyone else that helped me with
the expertise of all other areas:

Michael Strong, CGP

President, Brothers Strong, Inc.

Clayton Farmer
Alternative Power Solutions

Grace Coffman
Grace Coffman Designs

Christine Wilson
Prime Lending

Feel free to share this information with anyone that may find it interesting or learn from it, But please to not
change, reproduce or sell it with out the written permission from the parties involved in making this. Several
hours of hard work went in to this from my experts and I appreciate it greatly. All images used within were
used with permission of their owners. The information and numbers used are accurate as of December '08-
Although pricing, interest rates, etc. can change as they always do- The actual process will not.

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