Observation from 30 years contracting: Full Energy ......Shell Sealing of ßoor & ceiling with test 10. Attic Insulation to R-50 11. Occupancy sensors 12. Gas Stove and Dryer options

Observation from 30 years contracting: Full Energy packages don’t sell easily by themselves

Original Hypotheses:

Full packages will sell if combined with Wow! Remodeling.

30 month test results

1. 12 foreclosures purchased, renovated & sold2. Sold at $20,000 above Market Comps

3. 6 were sold before completion4. 25 - 50% Energy Savings

5. No Programs, Just Free Enterprise

The Wow! Package 1. Granite Counters at Kitchen & Baths

2. Extra Deep Stainless Steel Sink3. Designer Spray Faucet

4. Italian glass tile backsplash5. Under Counter Lighting

6. All wood Cabinetry7. Crown Molding and Tall Baseboard

8. All new interior doors and trim9. New Front Door with Art Glass

10. Tile & Travertine floors11. Engineered Wood Laminate Floors12. Designer tile and faucets at baths

13. Chair Rail, , Wainscoating & 3 tone paint14. Designer Light fixtures & ceiling fans

Include This,

The Three

PackageSystem

The Done! Package 1. New Front and Back Lawn

2. Automatic Sprinklers with timer3. New 30 - 50 year roof

4. New Roll-up Garage Door with Openers5. Gutters

6. New 2 inch faux wood blinds7. Major Professional Tree Trimming

8. Sewer line renovated as necessasry9. All new oil rubbed bronze hardware

10. New Energy Star Appliances with Warrantees11. New Windows and HVAC with Warrantees

12. Upgraded Carpet with 6 lb pad 13. Deciduous Trees placed for Energy Efficiency

And This,

The Energy! Package 1. New HVAC system, Stainless Steel Heat Exchanger

2. Manual J sizing, usually half of previous capacity3. New R-8 short mylar ducts partially buried

4. Manual D with tight seal and test5. Extra Return Duct in Master Suite

6. New LoE2 windows and Patio Doors7. Low E 140 at west windows

8. Deciduous Trees planted selectively9. Shell Sealing of floor & ceiling with test

10. Attic Insulation to R-50 11. Occupancy sensors

12. Gas Stove and Dryer options13. Ceiling Fans at all sleeping and living rooms

14. Panasonic Ventilation with controls

So we can

Sell all this

Everytime

SavingThe PlanetOne 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 © 2009

Like Feeding A Pill To A Dog Everything Green and

Energy Efficient

is the Pill.

The Granite Counters

and Travertine is the

Dog Food. ... Dont try it

without the Dog Food!

W4

The Homeowner Wins With Lower Bills and Increased Comfort

The Community Wins With New Jobs,

More Home Ownership & Increased Property Values

The Planet Wins With Less Carbon

Emissions

The Investor Wins And Gets To Keep

A Little Green

HomeOwner

Community

The Planet

Energy-Wise Renovator

A True Win,Win,Win,Win Strategy!

Features In All Projects: Low E2 windows R-50 Insulation New HVAC systemR-8 Ducts, sealed & tested Complete Shell SealingMore…(see Energy Package)

How Green Is Really Sold

Oh, Honey,I love it!

Let’s buy this one....

Well, they have those Energy Stars and the carpet

is made out of recycled Pepsi bottles so I guess we

might as well...

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

We buy Ugly Houses



The more vandalism, The better (the price)



Not too smart taggerBurt couldn’t say much in court



Deferred Maintenance12


G r e e n E a r t h E q u i t i e s . C o m © 2010

5 Olympic Rings - All Important

1. Buy it right2. Design it right3. Build it right

4. Market it right5. Sell it right

All are important. Do them all and keep some gold! Missing any of these can be expensive.

The Art is knowingWhen to hold ‘emWhen to fold ‘em

The “Cliff’s Notes” Formula For The 3 Package System

The Energy Package $20,000 (hard cost)

The Wow! Package $20,000

The Done Package $20,000

Soft Costs $20,000

Profit $20,000

Total Buy-Sell Spread $100,000



WSJ.com Sept 24, 2009

The Foreclosure Pain May Drag on for Years By James R. Hagerty

Delays in dealing with home foreclosures are stretching out the pain for the U.S. housing market, as we reported in Wednesday’s Journal. That has stirred lots of debate over whether it is better for the nation to face the pain of millions of foreclosures immediately – to get it over with fast — or to draw the process out over several years in hopes that the economy and housing demand will recover.

It looks like we’re taking the latter course, for better or worse.

The foreclosure process takes about twice as long as it used to for a variety of reasons, including efforts to modify loans to keep borrowers in homes, staffing shortages at loan servicers, bankruptcy filings and a “strategic rationale” by lenders hoping that home prices will recover, .......

Henry Fishkind, an Orlando-based housing economist, says some banks tell him they “are holding back [foreclosed-home] inventory” to avoid depressing prices any more than necessary. “It’s in their interest” to avoid flooding the market, and regulators haven’t forced them to do so, he says. That suggests that the backlog of homes headed for foreclosure will be stretched out over several years. That will be less disruptive to the housing market, Dr. Fishkind says but may mean that it takes longer for financial institutions to shed dud assets and regain the health required to extend new credit.

In some of the former bubble markets, including Florida, (& California, adds DJR) the problem will be aggravated by looming defaults on option adjustable-rate mortgages ............

Is This Glass Half Full or Half Empty?

Why Green Renovation Of Foreclosed Homes Will Be A Good Business Model For Years To Come

http://online.wsj.com/article/SB125366552480532521.html#articleTabs%3Darticle

http://online.wsj.com/article/SB125366552480532521.html#articleTabs%3Darticle



Remodeling

Green & Building

Performance Real

Estate

3 Disciplines

1Sweet Spot&



Deliver More For Less?

Delivering More For Less:

A violation of the Second Law of

Thermodynamics

Or a Crazy Sales Pitch? Or?



Cost & Benefit Analysis Marketing To Acquire Customer 25% 10,000

Sales Commission 10% 4,000

Premium for Occupied Working 10% 4,000

Overhead & Profit 30% 12,000

Contracted Work 10,000

Total Contract 40,000 40,000

Marketing To Acquire Customer 2% 800

Sales Commission (pro-rata) 10% 4,000

Premium for Occupied Working 0 0




Conventioal Contracting To Residential Customer

Energy-Wise Renovation of Foreclosure by Investor

Marketing To Acquire Customer 25% 10,000

Sales Commission 10% 4,000

Premium for Occupied Working 10% 4,000






Target House Specs

1. 3 or 4 Bedrooms(2 Bedrooms wont have

the “spread” you are looking for

2. 2 Baths(1 Baths wont have the

spread or the quick sale)



Target House Specs 3. 30 to 50 year old Tract Homes(Older will have more difficult

problems, Newer wont have enough problems for you to build value and

deserve your price)

Before



Target House Specs

4. 1000 to 1500 sq ft

5. Pools are OK(most investors dont like them = better

deals)

6. The more beat up the better (for you)



Target House Specs

7. The “Worst house on a good block” is a good thing

to look for

One or two Board ups Is good.

More is suspect



Define Your Buyer

First Time Buyer.

Hopefully FHA

Priced where payments will be only a little more than rent.

=$150K to $250KSell price

ForeclosureRadar.com estimates rentsRentometer.com publishes exact rents



“Naked” Capitalism? 1. Minimum Government

Involvement.2. Minimum Program Involvement.

3. Use All “Wholesale” Vendors and Suppliers

4. Minimize Overhead 5. Focus On Adding Hard Value.

6. Find Your Own Money.7. Find Your Own Buyers.

8. Buy Smart

Stay NIMBLE!



Why Is A Green Heart Necessary?

Disclosure: You need a “Higher Calling” to stay the course when you could make more money faster

with less effort if you just did “Lipstick On A Pig”

Full Disclosure: In other words. I make less money,

and put in more effort and it takes longer

than the TV show flippers who have raised putting Lipstick on a Pig

to an art form.



At ACI ’09 There Was A Big Focus on Mini Splits Charles and Dave discussed it in

the airport on the way home. When the wheels touched down in Fresno, I stopped production of the conventional system and arranged to meet Gary on the job the next day. We designed a hybrid mini

split system with ductwork that we now use on

all of our projects.

The Concealed Unit = Key To Acceptance In US Market

The small ducts feed the bedrooms and bathrooms

A lowered ceiling will be installed when the ductwork

is complete.

All the ductwork is within the building envelope and

covered by R-55 insulation = No duct loss!



ERV & Mini Split (typical)

Panasonic ERVFujitsu Indoor

Unit Wall Mounted



ERV & Concealed Unit Of Fujitsu Mini Split

Panasonic “Spot ERV”This unit

delivers fresh air all to this

spot. Circulation from both zones is

required to distribute the

fresh air. Not A

Problem.

Concealed Unit &

Ductwork is above this lowered ceiling



Panasonic ERV For $300 materials and $300

install, why would we not give our clients clean fresh air?

For some reason new home builders have resisted all the

way till this year.

A sad commentary, which indicates that contractors need

regulation ..... Or the buying public needs to wake up,

get educated and DEMAND better building



Mini Split Concealed Unit Before It Got Concealed

Mini Split Ducts should be as

short and straight and smooth

as possible.



Mini Split - Air Velocity The moving

dampers, easily throw the air 18 fee across

the space.

This is a good application for

open space floor plans.



Confirming Velocity and Adjusting Dampers.

In this application, the dampers will be

adjusted for balance and locked in place before the ceiling is

installed.



Hard Pipe With Smooth Transitions

Smooth Square to Round Transitions and straight runs create the least

static pressure and make this system work better

than we expected. It’s old school work and many HVAC installers

dont have the knowledge or tools to do it. It pays to ask.

CondensateDrain

Freon Lines

Dampers

Transitions



Why We Prefer Roof Mounts 1. Avoid Theft

2. Avoid kids & sticks = Back Yard Blender

3. Avoid Lawnmower rocks4. Avoid dogs confusing them

with fire hydrants5. Shorter Freon run

6. Less elevation change7. = More energy efficient8. Save space in side yard.

9. Quieter. Noise goes up.



Mini Split Using Flex Ductwork This is not as efficient as

1. Indoor Unit on the Wall2. Ductwork in the Conditioned Space

3. Hard Pipe Ductwork.

But it works in a very tight envelope with a low load.

(Not recommended without the tight envelope and good

insulation)



Mini Split Using Flex The entire unit is wrapped

in additional FSK insulation. This would be skipped by normal HVAC

Contractors.

The envelope and insulation is so efficient

that the customer rarely turns on the

bedroom zone.



One Way To Mount Mini Split Concealed Units.

Two Concealed

Units Sharing a large 20” x

30” Filter Return Box

(You wont see this anywhere else... Trade Secrets Revealed? Or just big

boys havin’ fun with the toys?)

Ducts to Living Area go

this way

Ducts to Bedrooms go

this way



Looking Up At 2 Concealed Units Sharing a 20x30 Filter Grille & Access



Details On Test Home #1 1200 sq ft 3 bed, 2 bath

Attic R-55 Leakage .5 cfm / sq ft floorVent Panasonic ERV 40 cfm

Walls R-16 with 1” rigidWindows U 30

< 10 sq ft Western exposureFujitsu 2 ton MiniSplit on roof

1 12,000 btu wall mount1 12,000 Btu concealed unitHard pipe in lowered hall

H2O & stove - Natural GasOccupants = Couple + Newborn (First Home) One House At A Time



Results: 13 Months Later Bill Date Elec Use Elec $ Gas Therm Gas $ Total $

Feb 4, 2011 590 $72.34 23.0 $24.91 $97.25Jan 5, 2011 583 $69.66 18.0 $19.14 $88.80Dec 7, 2010 563 $66.99 23.0 $23.45 $90.44Nov 4, 2010 328 $39.03 14.0 $15.79 $54.82Oct 6, 2010 481 $57.24 12.0 $13.82 $71.06Sep 5, 2010 480 $57.12 10.0 $11.67 $68.79Aug 5, 2010 458 $54.50 9.0 $9.90 $64.40Jul 7, 2010 375 $44.63 10.0 $10.65 $55.28Jun 6, 2010 284 $33.79 14.0 $14.48 $48.27May 6, 2010 297 $24.76 16.0 $14.08 $38.84Apr 7, 2010 347 $28.93 21.0 $17.41 $46.34Mar 7, 2010 388 $32.34 20.0 $17.41 $49.75Feb 4, 2010 283 $23.59 18.0 $15.31 $38.90

Hot Fresno

Summer

Note: This wont work without a good envelope



Comparing 2 GEE Projects

Month MS HP Test 1 Contol 1*

Oct $57.24 71.15Sept $57.12 109.97Aug $54.50 112.77Jul $44.63 109.32Jun $33.79 40.36May $24.76 43.70

Total-> $272.04 487.27

1200 sq ft 3 bed, 2 bathAttic R-55

Leakage 1 cfm / sq ft floorVent Bath Fans Only

Walls R-11, no rigid ins addedWindows U 30

< 15 sq ft Western exposureRheem 2 ton package on roof

(13 SEER 80% furnace)Flex R-8 Ducts in Attic, Man D

H2O & stove - Natural GasOccupants = Couple + Newborn

Very Similar - Some Differences



Trojan Horse Remodeling How Much Energy Savings Can We Hide In The Trojan Horse?

R-55 Attic,Tight Shell Seal,U 30 Windows,

Mini Split With DuctsE-Star Appliances & Lites

ERV.... Yes, for sure.

How About Solar PV

?



We Morphed! We’ll still do the

three packages ... But

We’re going to Zero with

Solar PV!



Room For Improvement 1. Real Estate Appraisal

Train Appraisers in valuation of Home Performance

2. Stop penalizing Investors. Give them at least the same incentives

as homeowners.(Solar Tax Credit etc)

3. Utilities make available Neighborhood Average Bills. More

granular than Zip Code, perhaps 1/4 mile radius.



Room For Improvement Create a “Pay For

Performance” Incentive Program paid out 12 months after completion based on

Utility Bills.

Benefit: Zero Overhead and Real Performance. No

Modeling or Ratings or Third Parties required. Only

Performance is rewarded.





Marty, This could be

bigger than the flux capacitor.

If we combine the free enterprise gene with a green heart ... these people really

can save the planet!



Thank You! That was a lot in

a short time

If you missed a point or 2, It’s all at:

GreenEarthEquities.com In the

PlanetSavers University

(Email for downloadable copies)

In The Energy Wise Renovating Army!

[email protected]

mailto:[email protected]

mailto:[email protected]

Documents

Observation from 30 years contracting: Full Energy ......Shell Sealing of ßoor & ceiling with test 10. Attic Insulation to R-50 11. Occupancy sensors 12. Gas Stove and Dryer options