EESTOR, Alternative Energy, and the Future of Real Estate and Related Industries: Introduction (Part 1)

How EESTOR can change Real Estate?

The Texas based company EESTOR is making huge waves in the energy storage arena and many think their technology will change the world of energy as we know it.? Their new technology is basically a capacitor on steroids.? It has the quick charge and discharge characteristics of a capacitor, but with a much higher energy density.? In addition, this technology will be cheaper to manufacture? than lead acid, making it all the more enticing.

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? You might have guessed that the major interest behind this technology lies with the automobile industry.? Its potential to reduce carbon emissions is astonishing.? There are also plenty of articles out there that discuss EESTOR’s use in several other applications, but I have not seen a whole lot on how the technology could change the real estate, housing, and construction sectors.? I thought I would collect my thoughts and try to build a prediction for several industries and sectors tied to real estate based on EESTOR’s potentially earth shattering technology.? This is by no means a scientific analysis, but there is an underlying economics influence.? Please read with an open mind and a desire to think out of the box…

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Here are a few assumptions and facts, predictions will be based on:

1. EESTOR technology will pass all verification, be mass produced, and will perform as good or better than its predicted specifications
2. The lag time for automobile makers and other industries to incorporate the technology will be within 2 years of EESTOR’s release
3. Buildings are the second largest consumers of energy?
4. The electric grid loses 400 billion kwh of energy through transmission lines in the US
5. Gasoline and oil prices are at record levels
6. Americans commute an average of 40 miles a day to get to work and back
7. Alternative energy is gaining major ground, but battery/energy storage technology is the Achilles heal of practicality and efficiency, and keeps alternative energy from being more competitive with fossil fuels
8. There are 167,000 gas stations in the US
9. Electric cars have far fewer moving parts than their combustion counterparts
10. Propane, heating oil, and wood are the primary sources of energy for heating in homes without access to natural gas.

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In this mutli-part series I will investigate these major areas:

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• Part 2: Impact of EESTOR on Surburbia
• Part 3: Impact of EESTOR on Construction
• Part 4: The New Boom, and Bust, Industries
• Part 5: Assessment and Tax Changes: Devaluing the Obsolete
• Part 6: New Real Estate Investment Opportunities

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Stay tuned for Part 2: Impact of EESTOR on Surburbia…

In the meantime read more on EESTOR here:? http://en.wikipedia.org/wiki/EEstor

Tags: alternative energy, eestor, future of real estate

Do not use plywood for a tile floor base

1. Plywood expands and contracts more than concrete backer board. If water finds its way onto and into your plywood, the plywood will expand. The expansion will create a soft spot under the tile that will give in when someone steps on it. This will almost always cause cracks in your grout and in some cases will pop tiles up completely.

2. Plywood flooring is organic and can host mold, and rot out and weaken over time.

3. You need a table saw or circular saw to cut plywood. Backer board will allow you to lay all the tile you need with just a utility knife.

4. Screws…you will need more of them and they will need to be waterproof. As pointed out in the first reason, plywood expands and contracts and needs lots and lots of screws to anchor it securely to the floor. Depending on the thickness of the plywood, you will need to use upwards of 25 screws per square foot to make sure expansion is minimized. In addition, since plywood holds moisture better than backer board, your screws will rust out over time if your sub floor stays damp. Rusted screws will eventually give way to the expanding and contracting of the plywood and your tile and grout will fail with time.

5. Standard mortar doesn’t bond well with plywood. You will need to cough up more cash and buy the “white” latex based mortar or purchase an expensive additive that mixes in with the regular mortar. Even with these options, the bond isn’t nearly as strong as with regular mortar and backer board.

If you decide not to heed this advice and pursue a plywood base for your tile floor at least do the following:
• Buy the thickest plywood that you can, ¾ inch works well (this assumes you have at least a ¾ inch subfloor).? Total thickness of floor under tile should be about 1.5 inches.? Trust me, the thicker the better…or your grout and tiles will be more likely to crack.
• Get lots of outdoor deck screws
• Spend more and get the premixed white latex mortar
• Thoroughly clean and sweep the plywood prior to laying the mortar/tile
• Leave at least 1/8 inch gaps around each piece of plywood
• Most importantly…keep your house and floor dry!

Good luck and happy tiling!

Tags: tile floors

I live on the water and am cursed with a high water table and a crawlspace underneath my house.? Since my wife and I moved in 2 years ago we have always noticed a faint musty smell in the lower level of the house.? After the record rainfalls in

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Madison, WI? in the month of June our crawlspace became very wet and made the? smell worse.? I learned many things about crawlspace and basement remediation, so I will share with you these bits of wisdom…If you notice a musty smell in your house or find water in your crawlspace or basement? here are some things to check:

• Sump Pump -? The majority of the time when you get water in your basement or crawlspace, it is because your sump failed.? Check to make sure that there is no debri in the sump pit that could get sucked into the pump and clog it.? I found that our sump had become clogged with insulation that floated into the pit when water came in.? You will also want to examine electric wiring/fuses, and check the drainage piping to make sure it is properly connected and is not leaking.
  • Tip:? Purchase a sealed sump system if you don’t already have one.? A sealed system keeps debris from floating in and water vapor and radon from exiting out of the sump pit and into your house.
• Sump Piping -? If the drain pipe from your sump is draining near your house chances are that the water will end up back in your basement or crawlspace.? Use a nice rigid pipe and stay away from the bendy stuff.
  • Tip:? Don’t use drain hoses that collapse (like a large tube sock)…these can blow in the wind on a dry day and easily freeze up on a cold day.? Stick to PVC piping for your drainage option.
• Grading of your soil -? It is important that the earth around your home slopes such that water moves away from the foundation.? Fixing your grading can be a big expense if you need to get a back hoe involved.? If you have minor grading issues you can accomplish a lot with a pick axe, shovel, rake, and a wheel barrow.? Trust me on this one, my wife and I just spent the weekend re-grading the yard around the house because the soil was above the sill plate and let water flow over the foundation walls and into the crawlspace.?
  • Tip:? Put flower beds around the perimeter of your house.? The anti-weed matting and rocks/wood chips that you put down will help water drain away from the house and prevent soil erosion.? In addition, keeping grass and plants from growing next to your home will substantially reduce the number of critters that find their way into your home.
• Gutters and Downspouts – Make sure all gutters and downspouts are clean and free from debris.? In addition, your downspouts should drain at least 5 foot from your house.? A lot of the time water comes in through the basement or crawlspace because your gutters and downspouts are not keeping water away from your foundation.
  • Tip:? Gutter covers can greatly reduce the amount of cleaning you have to do throughout the year…Invest in some and save yourself some work.
• Cracks in your foundation-? This can be a bigger issue since cracks can be very difficult to truly repair and because they can impact the structural integrity of your house.? Don’t bother trying to chisel out a crack and to slop on crack filler, this is almost certain to fail as the pressure the water puts on the filler from the outside of the house will easily overcome it.? Your best bet is to use epoxy injection to get deep inside the crack.? Epoxy can also help the structural integrity of the foundation, unlike crack filler.
  • Tip:? If you have a crack that is leaking water, get a professional involved.? You will save yourself a lot of headaches and rework.
• Plumbing in your home- ? A lot of the times leaks in the plumbing in your home will cause mold to form and will create that “musty” smell.? If you don’t pinpoint the source of water as coming from the outside of your home, check your major water lines…chances are you have a leak.
  • Tip:? Whenever plumbing work is required, get a pro to fix it, but make sure they carry a guarantee that they will fix any future leaks from their work for free.? Action Plumbing in Madison is a good place to go with for this.
  • Tip:? Check the wax rings on your toilets from time to time and make sure that all your toilets are anchored securely to the floor. ? A wobbly toilet will break down the wax ring overtime and will leak water into the floor.? A wax ring is about $2 from the hardware store…fixing the damage from a bad one will cost you at least 100 times that.
• Check for Mold-? Mold is easy to spot and smell in most cases.? That “musty” smell comes from mold!? It is usually black and hangs out on anything organic (wood, latex paint, paper, etc.).? If you have a minor mold problem it is fairly easy to fix with a Bleach (1 part)/Water (5 parts) mixture.? This is of course assuming that you fixed the water problem…mold can’t grow without a damp environment.? So get rid of the source of water and your mold problem will go away.
  • Tip:? A yard/fertilizer pump sprayer from your local hardware store is a great tool for spraying your bleach/water mixture on the mold.
• Examine house your basement/crawlspace insulation- ? You wouldn’t think this would matter much, but a properly insulated crawlspace will substantially reduce the moisture in the space.? If you have a crawlspace, DO NOT insulate the between the floor joists!? Insulating the floor will cause moisture to build up in your crawlspace.? Your best bet is to remove any insulation from the floor joists and insulate the walls of the crawlspace.? The newest recommendation is to insulate the outside walls of your foundation, rather than the inside walls.? This can be a tough task if you own an existing home so hire some contractors to spray foam on the inside walls of your crawlspace.? Not only will this help you save money on heating and cooling bills, it will also help keep moisture out.
  • Tip:? If you are building a new home, invest in waterproofing your foundation and insulating the outside walls.? You will be happy with this choice in the long run since you will be much less likely to have water problems in your basement/crawlspace.
• CLOSE crawlspace vents -? Warm air entering the crawlspace in the summer time will condense on the walls, floor, and ceiling. ? This creates a breeding ground for mold and critters and can rot out your floor joists in a hurry.? In addition, cold air coming in during the winter time will greatly increase your heating bills.
• Pour a concrete floor-? If you are like most folks with a dirt crawlspace, pour a concrete floor.? This will keep most moisture from coming up through the ground, can be used to drain water to the sump, and helps make your space more useable for storage.? A 24’x27’ crawlspace will cost between $2000 and $4000 to put in a concrete floor…very worth it when you consider the problems that can arise without one.

I hope you can take something away from this article.? I put almost all of these things into practice and now enjoy a fresh smelling home and a dry crawlspace, even with my proximity to the water. ? If you have any other ideas or tips to help fix a wet crawlspace or basement, please share in the comments below.? ? Stay dry!

Tags: crawlspace, house flooding, wet basement

Live within your means by buying an affordable home!

Purchasing a home can be the largest, most expensive undertaking you will face in your lifetime. With real estate prices experiencing double digit growth year over year for the past few years, it may even be our greatest investment. Most of us drive to the neighborhoods with the biggest, nicest homes and dream about one day living there. Our homes are our mark in this world, our castles. Given this, should we spare any expense when it comes to buying one? Most people fall into the routine of living in the most house they can afford. It becomes a matter of, “if I make x and have y to spend on a home, I will look for a house that costs y” instead of “I will look for a house that costs y minus what I don’t need”. My article on living below your means looks at this phenomenon in more detail.

A house should be a place to live, not a place to die. In other words, choose a home that you will be happy living in for many years, not one that will stress you out with high mortgage payments. Choose one in a nice neighborhood that has great schools, allows you to live a comfortable life, and doesn’t strap you for cash. In today’s real estate environment it may be a pipe dream to find a home that doesn’t strap you for cash, but opportunities exist around every corner. Whether it is buying a smaller home, one that needs a little work, or one with a smaller yard, you always have options. If you can’t find a place that allows you to live comfortably while remaining affordable, then maybe you are not ready to own a home.

When buying, there are 10 things you must remember about a home:

1. It is an asset, not an investment.

2. Home expenses can eat your wallet and life.

3. Real estate taxes are calculated using percentages.

4. Home buying and selling has high transaction costs.

5. Size is less important than quality of living space.

6. Utilities increase with square footage.

7. Insurance increases with the price of the home.

8. Upkeep increases with the size of the home.

9. Do it for the kids; get a home in a great school district.

10. A home can loose its value!

Number 1 - The savviest of investors invest for cash flow, not appreciation. An investment in a home should be no different. If your house is not generating income, it is not an investment. Banking on appreciation is a risky business and should only be performed with risk capital, ie. money you can afford to lose. Since a place to live is a necessary thing in life, you are better off treating it like an asset. If you buy a home viewing it like an asset instead of a speculative investment you are less likely to act irrationally and take unnecessary risks.

Number 2 – This point highlights that homes are not cheap. Mortgage payments, insurance payments, taxes, utilities, maintenance, lawn care, etc. all add up to a substantial amount and can really impact your budget. Buy a home at a price you feel comfortable with, one that will allow you to maintain your freedom to live life the way you want. That could mean changing your job, starting a business, or retiring. You should always avoid a situation where you lock yourself into something for an extended period of time. Buying a home at the top of your price range can really put the shackles on your freedom.

Number 3 – It is important to keep taxes in mind. Remember, death and taxes are the only things certain in life. The pricier the house, the more you will pay in taxes. You will always pay taxes on your home, even if you own it outright. I mention taxes because they are one of the most substantial expenses to owning a home, and they are often overlooked. If you have a house worth $300,000 expect to pay in the neighborhood of $5000-$7000 in taxes a year depending upon where you live. That is about $500 a month! Talk about a budget buster.

Number 4 – Buying a home for the short term is more risky because of high transaction costs. For a buyer, closing costs can be around 3-5% of the purchase price. That doesn’t include the cost of moving which averages around $10,000 per move. If you are a seller using an agent, commissions are typically 6% and that doesn’t include any legal, title, or survey fees. All the benefits of homeownership can quickly evaporate if you are in it for the short term.

Number 5 - I see so many houses built just to be BIG. They don’t always look the best and have a lot of space that probably doesn’t get much use. If you are a first time home buyer don’t put too much value on space. You really need to live in a house before you know what your requirements are. Remember, you still pay for all the space you don’t use. Besides, most people get more enjoyment out of a small house with character than a gargantuan “Mc-Mansion”. The following items in the list highlight the other benefits to having a smaller house.

Number 6 - The size of the home you purchase can have a substantial impact on utility costs. It is safe to assume that the bigger the house, the bigger your utility payments. Remember, more than just the sales price determines the expense of a house. Utility payments can be a big “gotcha” for first time homebuyers. So heed this warning and buy an efficient home without an excessive amount of space.

Number 7 – Insurance is generally pretty cheap for a home. If you live in a flood plain or other area prone to natural disaster it can become more substantial. The bottom line is that like most other household related expenses, insurance premiums increase with the value of your home.

Number 8 – Most people don’t think about upkeep when they purchase a home. That 4 bedroom 4 bathroom house sounds wonderful until you have to clean 4 bathrooms. This holds true with lawn care also, the bigger the yard the more the work. A large house can be wonderful, but remember it takes a lot of work to keep it that way.

Number 9 – School districts are usually the biggest factor for homebuyers. This is for good reason; well educated kids grow into well educated adults. Society benefits from well educated people. One of the greatest gifts you can give your kids is an education. Besides being a huge positive for your kids, great school districts keep real estate prices from falling because they drive up demand for the area. So, even if you are a bachelor/bachelorette with no plans for kids, the price of one of your largest assets is safer in a great school district.

Number 10 – This is probably the most important point to remember, especially since home prices have recently gone through the roof. Your house may lose its value. This is usually what causes the most financial problems for people. Imagine someone who has stretched their budget so thin to afford a house and is unable to start a savings account. If they lose their primary source of income and can no longer make the payments they will need to either find another source of income or sell the house. If the house has decreased in value and they need money to make up the difference between their equity and market value they are probably in some deep trouble. This happens when one sacrifices a savings account for a home. It can also happen if there are no other options to generate the same level of income. Bad things can happen, so make sure you are able to weather the most difficult of storms when purchasing a home.

You may have noticed a common theme with these ten items. Sustainability is key to owning a home. Can you afford the mortgage while still saving/investing? What about the utilities, taxes, insurance, and upkeep? Take all of these things into consideration when purchasing a home. Always make sure that you are able to maintain and grow a savings account or investment portfolio. It is critical that you have a worst case scenario fall back plan. If you can’t afford the home when you want to change jobs or start a business, then you might want to think twice before buying it. Despite all this doom and gloom, home ownership is one of the biggest factors of class distinction in America. You are much less likely to become wealthy if you don’t own anything.

Tags: buying a home, buying real estate, live within your means

In Debt? Save money and pay down debts...

So you have the job, money is coming in the door, but if you are like most Americans it is going out the door just as fast! The B word is very intimidating to most because it screams “boredom” and “oppression”. What most people don’t realize, however, is that debt and lack of savings scream louder, and with more vulgarity. A budget is a critical rung on your social ladder to success. Without a budget owning a home, saving for retirement, and having a decent savings account become more and more difficult to attain. The kicker is that maintaining a budget can be one of the easier and more rewarding things you do in life. You will be amazed at how addictive, and even fun, it can be to manage one. The more you save and control what you spend the happier and more free you feel.

You may be asking yourself, “This sounds great, but where do I start?” I have put together a simple Excel spreadsheet that breaks down what money you have coming in and it has multiple categories for entering what money goes out. To get started, download the budget spreadsheet and determine how much money you have coming in monthly. Then figure out how much you spend on your house, car, private/student loans, and daily living per month. Use the goal column to set a maximum that you want to spend in each category. It will auto-populate the rest of the months for you. For the first month track how much you spend on groceries, eating out, going out, and random personal items. Once you know these try to figure out the max you want to allow yourself to spend on each category per month. Hopefully you have something left over at the end of the each month. If not, you need to read our article on Living Below Your Means.

If possible try to pay all your bills on the first of each month. This makes it easier to reconcile your checking account, and keeps worrying about paying bills on time to a minimum. When you pay your bills take the amount you are estimating you will have left over and deposit/transfer it into your interest bearing savings account. This gives a little bit of a safeguard from spending money that you should be saving. Plus, good savings accounts have a 2-3 day waiting time for funds transferred back to your checking account as a further disincentive to make compulsive purchases.

So now you have a budget, but you may be wondering “How will I ever maintain this thing going forward?” This solution to this is simple and maintaining a budget becomes as much a part of your life as paying bills. Since you are paying all your bills at once a month it is helpful to bring up your spreadsheet each time and enter the exact values of the bills paid for the month. This will give you an accurate number to transfer to your savings account and will make maintaining the spreadsheet simple. The daily living values will always vary from month to month and you may spend less than you estimated if you are frugal. This is a bonus because when next month rolls around you can put that extra money into your savings account.

This solution to budgeting may not be granular enough for the shrewdest of budgeteers out there, but it works wonderfully for those of us who would rather spend our time living than hoarding and detailing every receipt. I find that most people have a hard time dealing with the fancy software and tedious tasks of maintaining a highly detailed budget, and they eventually give up and scrap the whole budget idea altogether. So my advice is, keep it simple. You will start to fine tune and squeeze every extra penny out of your budget on your own when you see your savings account sky rocket. Remember, a budget is only effective if you keep it up-to-date and incorporate it into your busy life. Good luck and happy budgeting!

Tags: pay off debt, save money, start a budget

Living well below your means

Do you remember when you got your first real job? Finally, you had money coming in the door. Heck, maybe you were even savvy enough to put together a budget to see how far that money would go once you started living. This budget probably acted as a tool to see how much you could spend instead of how much you could save. Our consumer economy has taught us that money is for spending. Your salary determines what you can spend to get stuff, not what you are able to save or invest.

I remember as a senior in college I landed my first “real job” and thought I would be smart and setup a budget before I started life on my own. My logic went like this…”I am bringing home $2,200 a month. $200 will go to student loans, $200 for groceries, $100 for utilities, $100 for going out, $70 for a cell phone, $30 for internet. Ok, that leaves me with $1500 dollars to split between a car and an apartment. I can get a really nice apartment in Madison for $800 a month. That leaves me with $700 a month for a car payment, gas, and car insurance!”

So what did I do next? You guessed it…I immediately went to the car dealership looking for a car that would have payments in the $400 price range and found an apartment for $800 a month. It wasn’t about what was really practical, it was about me stretching my budget to the max and “living” the best I could for the money. I had no thoughts of saving or the downside of locking myself into all of these expensive financial commitments. Does this sound familiar to you? If not, then you were wise beyond your years. However, I have a feeling that most people began life on their own like me.

Well it didn’t take long for me to realize that not having any money left over at the end of the month was not the key to happiness. I started to become more and more stressed and felt trapped by the “iron cage” of liabilities I was building. What if I lost my job? Would I be able to afford my car and lifestyle? Worse yet, what if I wanted to quit and work a dream job that paid less or start a business? Could I come up with the investment capital and still afford my lifestyle? The answer was overwhelmingly “NO”. I would have been up a creek if I lost my job and my entrepreneurial side began slowly dying. It was at this point when light bulbs went off in my head. I realized that the car I had bought (a Subaru WRX) was a great car that was fun to drive, but it got me from point A to point B just like any other car would, albeit maybe a little faster. It only took premium gas and didn’t have great fuel economy. In addition, the cost of gas was skyrocketing. It started to become a no-brainer; I needed to ditch the “nice car”. Then I thought about my apartment…”$800 a month, that’s $9600 a year! What do I have to show for that $9600 when the year passes? Nothing…” This is when I realized the value of having monthly cash flow AND assets.

For the next few months all I was interested in was increasing the amount of money I had left over at the end of each month. To start I went to a car dealership to see what I could get for my car. I walked away feeling angry and dejected because they were definitely low-balling me. The old saying, “If you want something done right, do it yourself” couldn’t be truer when it comes to selling your car. I decided to post it on the classifieds at work and sold it the same day, for $4000 above what the dealership was willing to pay. I went online and found the cheapest, most fuel-efficient, reliable used car I could get for the money. The amount I spent on car related expenses dropped from $710 a month to $286, a total of $424 a month savings. This turned out to be one of the smartest moves of my life because I was able to get 103% financing for a house since my debt-income ratios were now in line. I bought a fixer-upper and saved about $100 a month compared to what I paid for the apartment. I also decided that I could eat fine by only spending $100 a month on groceries. After all the tweaking, I had $700 left over at the end of each month and I was building equity in a home. The joy I got from knowing that I could afford my lifestyle and take a $700 a month pay cut if worst came to worst, or if I decided my job wasn’t right for me, was incredible. Most importantly for my entrepreneurial mind was that now I was on the road to saving investment capital to make the jump into starting my own business.

So what can you get from my story? Take a look at what you are spending money on. Do you really need it? Does it make you so happy that you can live with saving less money each month? Are you building equity? Are you over dependent on your current job’s salary? Can you quit your job and do something you love? One of the most valuable things you have in life is freedom, freedom to say and do what you wish. If your lifestyle is hindering your freedom, then you are living beyond your means. It is not about what you can afford, or how others perceive your financial success, it is about living your life the way you want. Make your money work for you and you can begin to enjoy life.

Tags: Budget, save money, spend less