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. Saves money.
• 2. 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 ‘S’s
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 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
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. 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/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
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
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. Don’t consider payback
4. Don’t consider end-buyer’s
wants/needs
5. Don’t have a clear plan
Free Money
System
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
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 10-
25 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
“What’s 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.)
Don’t pursue if you’re
just
‘Interested’ or
‘curious’
Are you Thriving?
95% Rule
Q&A
Jim Simcoe
JimSimcoe.com
760-271-7128