The Green Retrofit is a Title III - Regulation Crowdfunding Campaign and is actively accepting investments.
$100.00 minimum investment

The Green Retrofit

Fix then Flip Eco-Friendly Smart Homes

Small OPO
Canyon Lake, CA
Environment
Accepting International Investment
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Help Us Fix Then Flip Eco-Friendly Smart Homes

Invest in The Green Retrofit

The stars have now aligned for flipping Eco-Friendly Smart Homes. We can Green Retrofit a home and reduce the electricity demand by roughly 40%, (per BuildItGreen.org), for a few thousand dollars, then install 40% fewer solar panels, flip for a green premium and share the profits. This can all be financed with the help of rebates, green loans and tax breaks. 


Our secret sauce:  A study by UC Berkeley shows that homes with a Green Point Label, which we will obtain, sell for an average of 9% more than comparable homes. Statistics from The Appraisal Institute also show home value increases by $20 for each $1 offset in annual electricity cost. In our example below, by investing an additional $15,000 in green retrofits and solar panels, we create an additional $13,800  in pre-tax profit, greatly improving our margins and chances of success on each progressive flip.


Environmental Benefit:  An average home burns 10,000 lbs. of coal each year. Per the Toyota company, a Toyota Camry weighs 3,480 lbs., so we are burning the equivalent of 3 Camry's each year. The Eco-Flip will reduce the burning of coal, and we believe it will turn a profit and pay dividends. The definition of Green Capitalism : "A superior return on capital, along with an environmental benefit"

Investment
$100 per share of Common Stock |  When you invest you are betting the company’s future value will exceed $200,000.

* You will receive our deal updates and prevent 30 lbs. coal from being burned annually, forever.


Perk

$100 per share - You will receive our deal update reports every other month, prevent 30 lbs coal being burned annually.

$500 or more -  You will receive a solar powered cap, deal update reports, prevent  burning of 150 lbs. coal annually.

*All perks occur after the offering is completed

An average home consumes about 10,000 of coal each year. Source: the U.S. Energy Information Administration. Our plan is for each of our flips to eliminate burning that coal, and pay a dividend. We will be using the levers of the marketplace to improve our planet, the definition of Green Capitalism.

"A person of modest means who wishes to have a positive effect on the environment, plus earn a dividend, can now  do so by simply putting pen to paper."

- Stephen Nauert  

The Fix and Flip Business

In my experience, a successful flipper aims for a 15%+ return on cash invested. A flipper will attempt to flip two or three houses a year, producing a 45%+ return on an annual basis. With an Eco-Friendly flip I believe we can increase our returns.


The 70% Rule: Flippers generally pay 70% of the "After Repair Value" (fixed up and ready to sell). We will determine how much we need to spend on rehab expenses, then subtract the rehab expense from the "ARV." This gives us a guide to the maximum we should pay for the property.

Example of a basic flip and fix with no green features

Price $252,000  
Loan: $226,800
$252,000= 70% ARVOur expenses
Our down pmt. 10%$25,200$25,200
Rehab cost$42,000$42,000
Closing cost$8,400$8,400
Holding cost 90 days$7,560$7,560
Total invested
$309,960$83,160



RESALE

ARV sales price$360,000
Real estate commission 5%
$(18,000)
Closing costs$(4,200)
NET SALES PRICE$337,800



Pre-tax profit$27,840 33%  return on $83,160
25% capital gain tax
$(6,960)
After tax profit$20,88025%  return

Resale with Green Features

After purchase the house becomes collateral for a combination of green loans and rebates.  In our example we borrow an additional $15,000 to make Eco-Friendly and Smart Home improvements.  We estimate the Green Improvements will increase the value by 8%, (per the UC Berkeley study), or $28,800. After sale we repay the $15,000 loan and realize an additional $13,800, representing a 49% improvement on our initial profit.  In this example we have increased the yield from 25% to 35%, and in the process greatly improved our margin for success on each flip. The Green Dividend. 

ARV (increased value 8%)$388,800
Real estate commission 5% ($19,440)
Green loan payback
($15,000)
Closing costs($5,000)
NET SALES PRICE$349,360



Pre-tax profit$39,40047% on $83,160
25%  capital gain tax($9,850)
After tax profit$29,55035% return

Over 60% of the energy used in California is provided by Natural Gas. A typical home uses 36,885 cubic sq.ft. of LNG yearly, per the U.S. Energy Information Administration.

Building codes were not as tight on homes over 10 years old per BuildItGreen.org. Older homes can be drafty energy guzzlers, costing homeowners ever increasing heating and cooling bills.

 quote: 

If you take these four steps on your own home, you will reduce your power bull by 40% per year...

BuildItGreen.org teaches that the most effective step you can take now to improve your home environment is to add more insulation.

Seal air leaks, your home will perform like a thermos, holding in the hot or cold conditioned air for longer periods of time.

Repair the air leaks in your ducts, older ducts leak up to 30%, Source:  BuildItGreen.org

12% to 20% of your bill could be for lighting. LED light bulbs use about 85% less power then incandescent bulbs, states the U.S. Energy Information Administration.

“Anyone can count the seeds in an apple, but only God can count the number of apples in a seed."

- Robert Schuller

Energy Efficiency is the New Home Improvement

Transforming a drafty home into a thermos

Door with Smart Lock

The First Step: The Green Retrofit

While you'll want to begin your transformation with new paint, fixtures and improved landscaping, the first step in transforming a drafty home is undoubtedly The Green Retrofit:


  1. Weather strip around doors and windows, seal air leaks
  2. Add attic insulation
  3. Repair/ seal air conditioning ducting
  4. Replace existing light bulbs with LED bulbs, which use less energy
  5. Choose Energy Star rated low energy consumption appliances
  6. Reduce water usage with aerators and low flow shower heads
  7. Add Drought Tolerant Landscaping- Drought Smart Gardens
  8. Install 40% fewer Solar Panels because of energy savings

The Second Step: Creating the Smart Home

Coldwell Banker Real Estate Smart Home definition: " A Smart home is equipped with network-connected products for controlling, automating and optimizing functions such as temperature, lighting, security, safety or entertainment, either remotely by a phone, tablet, computer or a separate system within the home itself."


ADD: 

  1. Smart door lock system
  2. Video doorbell with security cameras
  3. Programmable thermostat
  4. Smart lighting controls

* The profit margin on the Smart Home improvements is the icing on our Green Cake.

Video Doorbell plus security cameras monitored from your cell phone

Nest Labs states that Programmable Thermostats can reduce your bill: a 12% savings on heating and 15% savings on cooling, or about $131-$145 in savings a year.

The Demand for the Eco-Friendly Home is Here Now

  • Eco-Friendly homes sell faster and for a greater profit per a BuildItGreen.org survey.
  • The Appraisal Institute's "residential-green-energy-effecient-addendum" shows appraisers how to recognize energy savings, and then reflect those savings in a higher value appraisal. 
  • A National Association of Realtors Surveys show 59% of parents said they'd be willing to pay more for a home with Smart Home technology.
  • Realtor quote "If a buyer walks into a home without a smart thermostat they're walking out."
  • A survey from Coldwell Banker Real Estate states: 71% of Americans said they wanted a move-in ready home, and 1/2 of those said they needed smart home technology to be move-in ready.
  •  The same Coldwell Banker Real Estate survey says: 61% of Millennials want a smart home, followed by 59% of parents, 52% of Gen Xers and 50% of Boomers. 
  • The California Energy Commission voted unanimously for California's Title 24, mandating that all new homes built after 2020 will be Zero Net Energy Homes: producing as much power as they consume.

The Stars have aligned for us to fix then flip Eco-Friendly Smart Homes

We are uniquely qualified and licensed to fix then flip Eco-Friendly Smart Homes.  Steve Nauert, President of The Green Retrofit, possess:  the National Association of Realtors Green Designation, the Coldwell Banker Smart Home Designation, a  State of California Real Estate Brokers license, both of the Build It Green Professional Lender and Realtor designations, and a State of California Contractors Home Improvement Salesperson Registration. 

National Association of Realtors Green Designation

The Smart Home Designation from Coldwell Banker

Over 35,000 homes in California have been Green Rated. 

Build It Green Professional Realtor and Professional Lender Designation

Operating Philosophy, Purchasing, Marketing, Location, Headwinds

Our operating philosophy:  When it comes to finding, fixing and flipping homes as a business, we cannot afford to rely on strictly one individual’s judgment. We will employ, on a deal by deal basis, an architect, an interior designer, and a landscape designer.  A Virginia Tech study, which surveyed homes in 7 states, showed that high-quality landscaping can increase the value of a home as much as 12%. The various contractors and specialists will execute their plans under our supervision. The BIG LESSON I HAVE LEARNED in the home selling business is: pay the extra money for a professional, do not depend on your own personal preferences.  We will pay a 10% performance bonus at the end of the flip to all our collaborators.  This will give us the upper hand in gathering the best talent.


Purchasing and Marketing:  This is a tough business.  Most of the profit is created when we purchase.  Some individuals are terrific at sniffing out a great deal. I have had my successes and failures, so we will be working alongside finders and other Realtors, and I will be looking myself for our deals.  One of the main expenses in flipping is the holding and marketing period after completion.  I will be closely monitoring this aspect, and hopefully bringing us a substantial savings by pre-marketing the properties.  When you have a home for sale you place a sign in the front yard, and have the ability to hold open houses. We will take full advantage by continuously marketing and sharing information about our Eco-Flip during and after renovation.


Location:  Fortunately for us, I live right in the heart of the Temecula Valley, located in Riverside County, California.  The Temecula Valley is roughly 1.25 hours inland from Los Angeles, Orange County and San Diego.  A $600,000 home in these cities is $400,000 here. The Temecula valley experiences a constant stream of buyers priced out of the coastal markets. Our fix and flip price range will be from $250,000 to $500,000. When possible we will try to be under the FHA, ($379,000), and Veterans Administration  pricing guidelines, enabling our buyers to use 3.5% and ZERO down payment loans. 

Financially Speaking...

Headwinds:  I was watching an interview with the president of IBM, which created Watson, the computer that won on the Jeopardy! game show.  The IBM organization has concluded that when it comes to decision making: 33% of your decisions are correct, 33% of your decisions are not optimal, and 33% of your decisions are wrong. In looking back over my career buying and selling restaurants, houses and apartment buildings, I have been successful about 70% of the time. Fortunately, in the real estate business, the proper use of leverage occasionally creates a giant payday, compensating for the misses. My hope in flipping Green is the extra value we create will minimize our mistakes.


Use of Proceeds:  Our fix and flip example shows us using most of our funds for one fix and flip. Should the first one prove successful, we will “rinse and repeat." Eventually I see our role as more of a sponsor, using other source funds for a larger portion of each investment.

Competition: Profit in the fix and flip business greatly depends on how good a deal you get on the purchase price.  We will be competing with many other sophisticated and deep pocketed fix and flip buyers.  Response time, all cash and a fast close of escrow are big advantages.  When it is time to sell, our competition becomes similar homes for sale in our neighborhood, all of which are competing for the same limited pool of buyers.  No / low utility bills, green marketing and green buyer financing options will be our advantages. BuildItGreen.org statistics show that Energy Efficient homes sell faster and for more money.


How do you receive a return:  In a perfect world we would do two or three successful flips every year. Our current plan is for a dividend to shareholders to be paid at the end of each fiscal year.  


Exit strategy:  Should we be successful, our hope would be to pay dividends to shareholders as long as we keep flipping. When we stop, we will distribute all funds to shareholders as their pro-rata share of profits.


Why invest?  There are millions of homes in California over 10 years old that would benefit from a green retrofit. We need to get started. Your $100 investment in one flip will prevent burning 10 Lbs of coal each and every year, forever. Add more flips, burn less coal, make more profit. Your children and grandchildren will benefit from your decision to join us in this endeavor.

Average hourly California electricity production graph and Average retail price of electricity graph sources: U.S. energy Information Administration.

Offering Summary

Maximum 1,070 shares of common stock ($107,000)

Minimum 100 shares of common stock ($10,000)


Company
The Green Retrofit
 

Corporate Address
23010 Compass Drive Canyon Lake, CA 92587
 

Description of Business
Purchase, then fix and flip Eco-Friendly Smart Homes
 

Type of Security Offered
Common stock
 
Purchase Price of Security Offered
$100.00
 

Minimum Investment Amount (per investor) 
$100.00











Perks

$100 per share - You will receive our deal update reports every other month, prevent 10 lbs coal being burned annually.

$500 or more -   You will receive a solar powered cap, deal update reports, prevent  burning of 50 lbs. coal annually.

*All perks occur after the offering is completed

Irregular Use of Proceeds

The Company will not incur any irregular use of proceeds.

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Risks

A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment. In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document. The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature. These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.


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