Building a Green Real Estate Dynasty. Tonight: 3 Goals No Theory.

Building a Green Real

EstateDynasty

Tonight:3 Goals

No Theory

Learn

Choose to Act

Choose to Ignore

Tree-hugging Capitalist

What I Believe

Dream Big

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...

Increased Profits

Leverage OPM (Uncle Sam)

No competition

Eco-Friendly

Why green homes?

Home Buyers WantGreen 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.”

Columbine Ave, Phoenix

Vacant rental property

Market rent = $1000/month

Competition for renters = High

Phoenix example:

•Improved energy efficiency

•Improved water conservation

•Projected utility bill decrease = $105/month

What we did:

•$1500 for materials/labor

• Rebates = $750

• Net cost = $ 750

• Time to complete (3 days)

Cost to owner:

• Utility savings

• Healthier living (Less toxic)

• Craigslist blind ads

Marketing the rental:

• 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.

Results:

Is this ‘green’ to you?

1. Saves money.

2. Less toxic living environment.

3. Less impact on the planet.

Defining green:

The process of remodeling an existing

structure to create a high performance property.

Green real estate is:

Common ‘green’ real estate myths

Costs too much

Too complicated

No one cares about green

Follow the

3 ‘S’s

Seal it up

Systems & Solutions

Sex it up...

• Less toxic

• More efficient

• Polar bear friendly

Fundamentals of Healthy Green Environments

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 world’s 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 Sourcesa. Formaldehyde (urea-particleboard/phenol-

osb,exterior grade plywood

b. VOC’s (gasoline, kerosene,xylene,Toluene. Paint, sealers, adhesives, caulks, can be absorbed by carpets and furniture)

c. Vinyl chloride (human carcinigen, found in PVC)

d. Nerotoxins (backing, glues, fire retardants, styrene,latex binders, fungicides, anti-static and stain-resistant treatments)

e. Carbon monoxide stove,furnace,gas water heater, gas dryer)

Formaldehyde• Two main types:

• Phenol formaldehyde (used outside)

• (Plywood, Oriented strand board)

• Urea formaldehyde/ (used inside)

• (Particle board, cabinet fiberboard, etc)

Volatile organic compounds (VOC’s)

• 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 institute’s “green label” and “green label plus” logos

Adhesives/Glues/Sealants

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

LED’s: the facts

• LED’s (light emitting diodes) are making a fast entrance into the residential market

• LED’s produce more light with less electricity

• LED’s can last 35,000-50,000 hrs.

• (CFL’s 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

Materials1.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

Appliances1.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.Don’t consider payback

4.Don’t consider end-buyer’s wants/needs

5.Don’t have a clear plan

Free MoneySystem

What money is available?

•Rebates

•Tax Credits

•Incentives

•Grant money

Where is it?

•City

•County

•State

•Federal

•NGO’s

Rebate examples:

Text

DSIREUSA.ORG

GRANTS.GOV

ENERGYSTAR.GOV

\Incentives

Energy Efficiency Loan Programs

Sex it up...

Buy on emotion,

justify with logic

Don’t be this guy...

“Don’t give them what they want, give them what

they NEED”

Want Need

Trip to Hawaii Groceries

Bentley Car

Mansion Shelter

Want Need

Bamboo floors No toxins

Cool looking lights

Lower utility bills

Luxury Safety

Save moneyLive safely

What buyers/renters need:

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 10-25 x annual savings)

Make Marketing Automatic

‘‘Green’ Sale Green’ Sale SignSign

‘‘Green’ Sale Green’ Sale SignSign

Wall Signs

‘‘Green’ flyersGreen’ flyers‘‘Green’ flyersGreen’ 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

“What’s in it for them?”

• They are passionate about green.

• They want the experience.

• It looks good on their resume.

Write PublishRepeat

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.)

Don’t pursue if you’re just

‘Interested’ or ‘curious’

Are you Thriving?

95% Rule

Q & A

Jim Simcoe

JimSimcoe.com

760-271-7128