Energy-Wise Retrofits … Flip or Keep?

I just attended another fabulous, reality-based, seminar sponsored by PG&E, on integrating energy upgrades when renovating foreclosed properties for resale. It was taught by Dave Robinson, a retired contractor, whose mission is generating income while “saving the planet, one foreclosed home at time”. He defines what he delivers in three parts: ENERGY, WOW, and DONE — pointing out that ENERGY efficiency alone doesn’t create much buyer excitement, but that top dollar returns can be achieved by combining this work with such WOW factors as granite counters, tile floors, and stainless appliances, plus a DONE Package of purely practical upgrades such as a new garage door and windows, 30–50-year roofing , and water-efficient landscaping with proper drainage — meaning that the new owner won’t need to make a ‘to-do’ list upon moving in nor spend a lot of time on routine maintenance while living there.

There are few homes and a lot of competition in Sonoma County for properties that match the criteria he recommends: 3 bedrooms, 2 baths, first-time-buyer homes with simple architectural features, in basically middle-class neighborhood with at least a $100K spread between the buy-sell price, which when completed can sell for 10%-20% above the surrounding market. But with diligent persistence deals can still be found — though it may take a lot of kissing frogs to find a prince — going for really funky properties and making low-ball offers on those no one else seems to want before you find a deal that clicks. And for this to work, most importantly, you must have the funds to buy a basically unlendable property (as far as conventional lenders are concerned) and the team in place to follow through on the work.

Dave laid out a very well thought through business model and action plan that I’m sure anyone doing flipping could learn from and which I’d be happy to discuss with you. And, though his goals won’t suit most people, his practical insights on budgeting, construction practices, products and materials choice will be of value to more typical home buyers/owners who are considering how best to invest in a home so as to optimize its future resale value.

Whether your interest is in greening the built in environment or simply cutting down on energy usage, for more details and some inspiration check out the article Energy-Wise House Flipper in Home Energy magazine and visit Dave’s website http://greenearthequites.com. For an agent to assist you on your home buying journey give me a call.

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