Building a Green Real Estate Dynasty

Tonight: 3 Goals No Theory

Learn Choose to Act Choose to Ignore

Tree-hugging Capitalist

What I Believe

Real estate SHOULD be:

Healthier Safer Less expensive High-performance

WIIFM?

True Wealth.

What do we all want?

Love Health Wealth Sex Safety Friendship

3 Wins...

My reasons...

Why green homes?

Increased Profits Leverage OPM (Uncle Sam) No competition Eco-Friendly

Home Buyers Want Green Features

According to a ZIP Realty survey:

89% of homebuyers rated energy efficiency the
most important feature in a home.

55% of all home shoppers now cite green home

features as an important part of their purchasing decision.

Less than 1% of homes on the market include

energy efficiency in their description.

Homebuyers who value green features ranked them important for the following reasons:
12% 15% 37% 40% 49%

According to an Apartments.com survey:

60% of prospective renters search for

properties that offer environmentally-friendly amenities.17% of renters said they would not rent an apartment without environmentally friendly amenities.57% of renters said their apartment community does not currently provide environmentally friendly amenities.

In a study done published by Inman News:

32% of people said they'd pay an extra $5,000 for energy-efficient features, with the presumption that the homeowner would recoup the cost of those items over time.

Phoenix example:
Columbine Ave, Phoenix Vacant rental property Market rent = $1000/month Competition for renters = High

What we did:
Improved energy efficiency Improved water conservation Projected utility bill decrease
= $105/month

Cost to owner:
$1500 for materials/labor Rebates = $750 Net cost = $ 750 Time to complete (3 days)

Marketing the rental:

Utility savings Healthier living (Less toxic) Craigslist blind ads

Results:
Property rented for $1100/month.
$100 premium above market rent. $1200/year rental increase. 40% higher response to green CL
ad. Property rented prior to work being completed.

Is this green to you?

Defining green:

1. 2.

Saves money.

Less toxic living environment.

3. Less impact on the planet.

Green real estate is:

The process of remodeling an existing structure to create a high performance property.

Common green real estate myths

Costs too much Too complicated No one cares about green

Follow the 3 Ss

Seal it up

Systems & Solutions

Sex it up...

Fundamentals of Healthy Green Environments

Less toxic More efficient Polar bear friendly

Green buildings:

Energy efficiency Water efficiency Resource conservation Indoor environmental quality

Green thinking:

House as a system Whole systems approach Consume less energy and water Use resource efficient techniques and materials Healthier, safer, more comfortable

Key Points:

Remove, Replace, Relax Remove toxic materials Ventilate the air Use renewable resources

Statistically...

The United States comprises 5% of

the total world population

We use 25% of the worlds energy

resources

Buildings in the U.S.

Consume 65% of electricity Create 30% of total green house gas emissions Create 136 million tons of C & D waste each year Use 40% of raw materials globally

Building and resource use:

Construction of a 2,085 sq
ft home uses up to 1.5 acres of forest

Where does outdoor water go?

40-60% of potable water goes into the landscape

Pesticide facts
The likelihood of a child getting leukemia is 6X greater when herbicides are used on lawn More children with cancers had exposure to pesticides than children without cancer Pesticide links exist to infertility, birth defects, learning and neurological disorders, allergies, MCS (multiple chemical sensitivities) Come in on shoes and stay in carpet Moth balls (naphthalene) are one of the most dangerous chemicals available

Indoor Air

Indoor air pollution is 2-5 times worse than outside We spend over 90% of our time indoors 60% of homes and 30% of commercial buildings are classified as sick

Air leak issues come from...

1. Duct work leaks 2. Faulty insulation 3. Windows, door frames 4. Plumbing penetrations 5. Fireplaces 6. Floors, walls and ceilings

Duct issues

Ducts leak average of 30% Leaky ducts waste energy an decrease comfort Leaky air ducts can cause negative pressure- this can pull CO out of gas appliances into the home Use duct mastic on all duct joints Do not use duct tape!

Indoor Air Quality (IAQ)

Indoor air/environmental quality IAQ/IEQ

Materials and finishes Combustion gas safety Ventilation and moisture management Sick Building syndrome

Impact of negative IAQ 15% of homeowners may be allergic to

elements in their own homes.

40% of children born today will develop some form of respiratory disease. Prevalence of asthma has doubled since 1976. Increasing links to ADD and asthma in children. Of all the chemicals that EPA monitors, only ozone and sulphur dioxide are more prevalent outdoors than indoors

Indoor Air Quality

Toxins Off-gassing Plastics Ventilation Plants

What is off-gassing?

The release of toxic chemicals from common household materials (paint, furniture finishes, plastic, vinyl, etc)

Indoor Air Toxin Sources

a. b.

Formaldehyde (urea-particleboard/phenol-osb,exterior grade plywood VOCs (gasoline, kerosene,xylene,Toluene. Paint, sealers, adhesives, caulks, can be absorbed by carpets and furniture) Vinyl chloride (human carcinigen, found in PVC) Nerotoxins (backing, glues, fire retardants, styrene,latex binders, fungicides, anti-static and stain-resistant treatments) Carbon monoxide stove,furnace,gas water heater, gas dryer)

c. d. e.

Formaldehyde

Two main types:

Phenol formaldehyde (used outside)

(Plywood, Oriented strand board)

Urea formaldehyde/ (used inside)

(Particle board, cabinet fiberboard, etc)

Volatile organic compounds (VOCs)

VOCs are typically in solvents used in fluid or flexible products

Paints, sealers, adhesives and caulks

Most of the enes are VOCs Gasoline Kerosene Benzene Xylene toluene

Vinyl Chloride

The principle element in PVC products

Beach ball smell Problems with off-gassing, disposal

Human carcinogen Dioxin and hydrogen chloride is emitted from production and during burning

Carpeting contains

Toxic chemicals in the fiber bonding material,

dyes, backing glues, fire retardant, fungicides, antistatic and stain resistant treatments

120 chemicals; some of which are neurotoxic They last at least 3 years Carpet is neither renewable, nor biodegradable

Carpeting
Carpet is anathema to good air quality

Offgasing and absorption issues Dust magnet (old carpet weighs more than new) Dust mites love it (if humidity is over 53%) Bacteria hide here It holds everything from bottom of shoes

Systems & Solutions

Energy efficiency
Structural system Increased insulation Air sealing Windows Lighting Energy Star appliances HVAC design, installation and testing Renewable energy

Water Conservation

Install water conserving appliances

EnergyStar and WaterSense rated

Install water conserving fixtures/systems Optimize irrigation system Rainwater harvesting Greywater plumbing

Ventilation

Ventilation is the second way to reduce the impact of high concentrations of toxic gases

Natural ventilation (windows, etc) Mechanical ventilation (fans, etc)

Fix air leak issues

1. Seal all holes in building envelop including: sill plates, top plates, electrical openings, plumbing openings, boxes around windows, attic hatches, HVAC closet, door-frames, 2. Use: spray foam insulation, weatherstripping, foam gaskets on electrical openings, etc.

Low energy cooling

Ceiling fans

Standing in moving air under a ceiling fan makes the body feel 4 degrees cooler, thereby reducing air conditioning needs Increased comfort with the same temperature Choose EnergyStar fans (50% more efficient; have improved motor and blade designs; efficient lighting)

Insulating pipes

Hot

Reduces standby pipe loss Saves water by reducing waste while waiting for hot water at the fixture

Cold Reduces condensation and freezing problems

Green materials and Recommendations

Choosing green materials

Insulation Flooring Appliances Lighting

Natural linoleum flooring

Durable, stain resistant Made of rapidly renewable materials

Linseed oil, limestone, pine rosins, wood powder and jute

Renewable cork flooring

Cork is rapidly renewable (7-10 yrs), naturally fire and moisture resistant, sound absorbing hypoallergenic no trees are cut down

Rapidly renewable bamboo A renewable resource, replenished by natural

processes

Bamboo is fast growing (7-10 years) comparable to wood Full grown stalks are cut lengthwise into narrow strips and glued together either horizontally or vertically

Can be re-sanded and sealed Lots of products in market place

Carpet Alternatives

Untreated natural fiber carpets:

Wool, seagrass, sisal Make sure wool is NOT treated with toxic moth proofing chemicals

Install with low or non toxic backing

Best Carpet Choices

Recycled PET fiber carpets available Avoid styrene-butadiene latex backing (get woven backing) Low pile high density may be more durable and hold less dirt Look for the carpet and rug institutes green label and green label plus logos

Adhesives/Glues/Se alants
1. Typical ones are very toxic and off-gas 2. Found in cabinets, floor sealants, caulking, spray foam, carpet backing 3. Look for all-natural alternatives 4. Greenbuildingsupply.com 5. greendepot.com

LEDs: the facts

LEDs (light emitting diodes) are making a fast entrance into the residential market LEDs produce more light with less electricity LEDs can last 35,000-50,000 hrs.

(CFLs last 8000-10,000 hrs)

Refrigerator and freezer

Single largest power user in most households EnergyStar is minimum goal Size matters; small saves www.energystar.gov

Washer/dryer

Horizontal axis washer (Front Loading)

Use 40% less water & 50% less energy than most models Faster final spin- reduces drying time and cost

Paint
1. Chose No-VOC or LOW-VOC paint 2. Available at most most home stores 3. Very comparable to regular paint

Materials
1. Use natural/solid woods when possible 2. Stay away from OSB and pressed wood products 3. Glues and sealants used are toxic 4. Other great materials: brick, tile, metal. 5. The more natural, the better

Appliances
1. Replace old/faulty appliances 2. Look for Energy Star appliances 3. Washers, Dryers, Hot-Water heaters, Dishwashers

Mistakes to avoid
1. Spend too much 2. Do too much 3. Dont consider payback 4. Dont consider end-buyers wants/needs 5. Dont have a clear plan

Free Money System

 Rebates Tax Credits Incentives Grant money

What money is available?

Where is it?
City County State Federal NGOs

Rebate examples:

Text

DSIREUSA.ORG

GRANTS.GOV

ENERGYSTAR.GOV

Incentives

Energy Efficiency Loan Programs

Sex it up...

Buy on emotion, justify with logic

Dont be this guy...

Dont give them what they want, give them what they NEED

Want
Trip to Hawaii Bentley Mansion

Need
Groceries Car Shelter

Want
Bamboo floors

Need
No toxins

Cool looking lights Lower utility bills Luxury Safety

What buyers/renters need:

Save money Live safely

Sell Planet first = you lose Sell Savings/heath first = you win

Environmental benefit is a BY-PRODUCT

How to Increase Appraisal Values

1. Energy Audit report. 2.Build list of energy-efficient measures completed. 3. List of energy-efficient materials/ equipment installed. 4. Project annual utility expense savings based on historical data. 5. Projected asset value increase 1025 x annual savings)

Make Marketing Automatic

Green Sale Sign

Wall Signs

Green flyers

Results:

Sold for $5000 more, 61 days faster than market

Steps to build a green real estate investing dynasty

Determine your Why

Hire Free Interns

Whats in it for them?

They are passionate about green. They want the experience. It looks good on their resume.

Write Publish Repeat

4 of top 5...

Leverage Existing Data

(Warning: ugly slide coming up...)

Why Green, Why Now?

One Reason Only:

Something needs to change for you right now

Mountain bikes and Cosmetic Surgery

Potential Urgent Needs:

Falling revenues and decreasing profits

You need $200K by Tuesday

The Australians are coming...

Launching your business next week (without a C.A.)

Dont pursue if youre just Interested or curious

Are you Thriving?

95% Rule

Q&A
Jim Simcoe JimSimcoe.com 760-271-7128