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The “State Of The Idea”Mid-Term Message

For a couple of months I’ve been sensing that it’s time to

evaluate my progress in Energy Wise House Flipping...

Keep the Good,Throw out the not so good,

Mid Course Corrections,Respond to Market Changes,

etc

Let’s Buy

Ugly, Beat Up Houses,

Green Them Up All

Pretty...

And Sell

Them For

Fun and

Profit (and

research)

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The “Mid Course Evaluation

from several perspectives:

1. The Market Has Changed

2. I have learned some things

3. Ten is a good number

Sell Them Above

Market Value, Improve

the Neighborhood &

the Planet

Have Fun,

Experiment,

Share The

Wealth

The Unexamined Idea Is Not Worth Pursuing (Socrates, modified by Dave)

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A year ago foreclosures were plentiful. Good deals were everywhere. The competition

was afraid to act. Low offers were accepted and Haircuts were easy.Now, good deals are hard to find.

Multiple offers way above full price come in on most properties.

Competitors have regained confidence. Sadly, most of these are looking to put

lipstick on a pig in quick flips or profit by turning our cities into rental zones.

The Market Has Changed:What To Do About It?

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The Banks have found it more expeditious to not actually go thru foreclosure on all their

bad loans. They are dribbling only a few out on to the market, thus creating the

“auction environment” and driving prices up on the ones

they do sell.

The Market Has Changed:What To Do About It?

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If so, we could continue as usual with the formula intact, no

modifications required.

However

In my market it seems that the purchase price has gone up about $20K but the sell price has only

gone up $10K or less. These are my non-scientific observations but

my realtor confirms the are close to accurate.

If The Purchase $ Has Gone Up $20K, Shouldn’t The Sell $ Go Up The Same?

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1. The size of the pool of end line buyers has not changed. The amount of homes being put back on the market by the investors has greatly expanded. So it’s a “buyers market”

2. Most of these are either rentals or Lipstick on a Pig Quick Flips so the comps they provide are not very high.

3. This is a temporary situation. The Sales Price will follow later after the market adjusts.

Why Hasn’t The Sale Price Followed?

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Most of them, I already knew, I just thought maybe

I could get away with breaking my own rules. Some of them are new.

The main rule I tried to break....

I’ve Learned Some Things

Maybe I really can

make this work with hourly

employees. It’s easier and

they’re nice guys...

PS you dont have to learn this the hard way!

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One House

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1. No Hourly Labor. Use Subcontractor Only

2. Keep Your General Contractor Partner thinking like you

with 2 techniques:

A. Pay thru a profit split.

B. Check Writing thru the project’s separate account.He spends. I watch thru

electronic banking and fund when necessary. Check

duplicates make accounting easy.

Lessons From The First 10

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3. Wholesale Pricing from subs and suppliers. Always try to beat Home Depot.

4. Good Team of Independent Contractors. Mature, Grown Up Adults.

Licensed & Insured.

5. Make a Budget & Stick with it.

Lessons From The First 10

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It will just take a few adjustments to the formula:

I signed an offer and sent it off tonight. It felt good to

be back on the hunt!

Here’s My Plan...

With The Market Changes...Is Energy Wise House Flipping

Still A Good Idea? YES!!!

Maybe Even

Better!

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A. With the boatloads of money coming down the pipeline there will be opportunities like never

before.

I’ll be watching this closely & may use some of it.

Q. How Could It Get Any Better?

Be Careful. It’s hard

to stand out & command a

premium when you’re running

with the pack!

FREE Money

Never Is.

Note: Other Personality Types may be more suited to paperwork

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Assume: I was looking for $100K spread from buy to sell.

Assume: I can now get only $90 in the overheated market.

I am unwilling to give up my $20

I am unwilling to compromise on the Energy Package.

Something’s gotta give...

At least three things can be squeezed.

My Plan In This Over Heated Market

20-20-20-20-20 Review$20k Energy Package$20K Wow! Package$20K Done! Package

$20K Soft Costs$20K Profit

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1. Reduce the Done(landscape front yard only, etc)

2. Reduce the Wow!(less crown molding, 4 lb pad)

Reduce the Soft Costs(sell them myself, finish faster,

reduce carry costs)

This could add up to $20-30K saved! I only needed to make

up $10K. What to do with all these

“excess savings?”

Plan For Overheated Market

20-20-20-20-20 Review$20k Energy Package$20K Wow! Package$20K Done! Package

$20K Soft Costs$20K Profit

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With the savings from tightening the belt in theDone, Wow & Soft Costs,

There will be enough left over to

Increase The EnergyPackage*

& Add Solar (PV & Hot Water)

= Net Zero Energy

Actually we will only target close to Net Zero

(maybe a $5-15 utility bill?)

It’s A Perfect Time For A....Zero Energy House.

0%Yahoo! This Is

Going To Be Fun!

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One House

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1. South Facing Roof without big tree shade problems.

2. Some Re-Usable Items to keep the cost down. Not quite as trashed as I used to look for.

3. Worn Out T-1-11 Siding is excellent. Perfect candidate for

new insulation and stucco.

4. Built in the 80’s avoids the new lead regulations.

The Perfect Candidate For Zero Energy House Renovation

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Going To Be Fun!

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#10 is finishing up right now. It will be done in about 2 weeks.

It has a South Facing Roof and we are pretty close to our

target budget. So I think we’ll just make the jump and add

Solar. I’m getting quotes now.

The Energy Package already includes most everything

else required for Zero Energy Houses

Ten Is A Good Round NumberA Good Time To Evaluate

Q. If this works for me,Why cant it work for a

Few million more Foreclosed homes?

A.__________

Stay Tuned...

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1. I’m not making as much as the TV House Flippers BUT It’s 6 figures & more than I made

Contracting...

2. I LOVE the Freedom that Energy Wise House Flipping Provides.

3. Green Jobs, Community Improvement, Carbon Footprint, All Good.

4. Great opportunity to experiment and be a leader in Home Performance, Ducted Mini Split

etc

5. I love America, where I can do this.

6. I’m still building the Army. Are you ready?

Mid Term Summary