The Foreclosure Life Raft (And How to Get Your Cast Away Business Back on the Mainland)

By Ryan Moehring

If you are reading this, congratulations are in order! You have managed to survive one of the worst housing crises in several generations—a crisis, many believe, is beginning to subside. If you are like most of your fellow survivors, you have likely managed to carry on by subsisting on an unwholesome diet of foreclosures, short sales and real estate owned properties (REOs).

I liken the situation to Tom Hanks in the movie Cast Away. In the film, Hanks’ character, a Federal Express employee named Chuck Nolan, is stranded on a deserted island after his plane crashes while flying over the South Pacific. Chuck too, resigns himself to a less than ideal diet of crabs, fish, and coconuts.

Chuck remains on the island for more than four years, eventually becoming remarkably adept at spear fishing and other island survival skills. He even befriends a fellow crash survivor, a volleyball he affectionately names Wilson. Chuck grows accustomed to island life, eventually accepting the fact that he will never be rescued. However, of the few things he was able to salvage from the plane crash, one constantly reminds him of his home and his life—a single, undelivered FedEx package.

The metaphor is not sophisticated, but it is well-timed. Many of us who work in the green real estate industry have been side tracked over the past 2+ years just trying to keep our real estate businesses alive and profitable. Unfortunately, in order to do this, many have not been able to focus on green properties. Now that the market is turning around in many locations, it is time to focus once again on delivering our package—our goal to green the real estate industry.

This refocusing effort need not cause a 180° shift in your business plan. Just as Chuck didn’t transition from a sushi and coconut diet right into a Big Mac his first day back in the states, foreclosures and bank-owned properties will likely continue to be a part of your real estate “diet” for some time to come. The question is can you somehow combine your necessity and your ideology to make money and make a difference?

The port town of St. Lucie, Florida provides a hopeful example. The town, which has the 10th highest foreclosure rate in the country, received more than $13.5 million dollars in federal stimulus money to purchase some of its 10,000+ foreclosed properties. The Mayor of the town has decided to use some of the money to retrofit the homes to make them more energy efficient before putting them back on the market for purchase by low-to-mid income, first-time homebuyers.

The ingenious plan provides economic stimulus in at least three ways: 1) it takes bad notes off banks’ balance sheets, thereby contributing to the “thawing” process of the nearly arctic credit market; 2) it puts affordable housing within reach of thousands of new homebuyers, which ensures long-term economic activity in St. Lucie communities; 3) it creates jobs for the companies that provide insulation, windows, and other energy efficient building services.

All of this green activity embeds itself into the community, making green an integral part of the city’s identity, and laying the groundwork for even more green activity in the future. The last time I checked the city of St. Lucie still needs licensed real estate professionals to help them sell these retrofitted properties. I imagine that holding a green designation like EcoBroker® might make the difference between landing these listings and spear fishing for dinner. Your city is probably working on a similar program, and if not, they would likely entertain the idea if a motivated professional like you pitched it to them. There is a world of possibilities—what is needed is a shift back to our pre-Cast Away, aggressive mentality that we are going to transform the industry, no matter the obstacles.

I understand, really I do. You’ve been stranded on a 100 acre island for a couple of years. You’ve been exposed to the elements. You’ve had to hunt for your own food. You’ve survived in ways you never thought you’d have to. You will be forever changed by what has happened to you, and your industry will certainly never be the same. You’ve had complex discussions with volleyballs about the meaning of life, for goodness sake.

You will undoubtedly have to eat a coconut every once in a while just to keep your belly full, but you are back on the mainland. Houses are selling again. Life is good. And you have a package to deliver.

Sources:
http://www.palmbeachpost.com/opinion/content/opinion/epaper/2009/04/26/a18a_swartzcol_0426.html
http://digg.com/business_finance/Greening_Foreclosures_Buy_a_Home_in_Detroit_for_40?FC=PRCS4
http://www.salon.com/mwt/feature/2009/04/11/real_estate/index.html
http://www.imdb.com/title/tt0162222/

GREEN: A Recession-Proof Industry?

GREEN: A Recession-Proof Industry?
By Ryan Moehring


If you flip through any of the broadcast news channels or publications these days, you undoubtedly will be greeted with a barrage of headlines surrounding the current state of the U.S. economy. (For those of you who haven't been paying attention, it's not good.) Terms like "financial bailout," "recession," "inflation," and "the worst financial crisis since the great depression," do anything but conjure pleasant images in the minds of Americans and, unfortunately, they now dominate our daily news.

Yes, times are tough, and the constant media coverage seems to amplify the uncertainty we all feel, but are things really that bad for us as green real estate professionals? I'm going to propose that there is a silver lining to this dark cloud. Fortunately for EcoBrokers®, the bright spot in this dark time is the enduring stability of green building.

A study released this summer by McGraw-Hill Construction and the U.S. Green Building Council (USGBC) found that over the past three years more than 330,000 "market rate" homes with green features were built, making green building a $36 billion per year industry. Of that number of homes, an estimated 60,000 earned third-party property certifications through LEED or another certification program.

The study also surveyed existing owners of green-certified properties in an effort to gauge their attitudes about their homes. An overwhelming 83 percent of respondents stated that their new green home will lower operating costs. Seventy percent of those surveyed said that they would be "more" or "much more" inclined to buy a green home over a conventional home in a down market like the one we face today. The study also found that 78 percent of lower-income consumers (those who are most affected by a market downturn) would be more inclined to purchase a green home.

While these numbers paint an optimistic picture for green buildings, a cynic might point out that the findings were released before today's economic meltdown had completely matured. Now that we more fully understand the gravity of our economic woes, is green building really as strong as this summer's study reported? Are LEED and other property ratings going to go the way of the Starbucks® Venti Triple Mocha Latte—a luxury consumers might have to have to do without until things improve?

Michelle Moore, senior vice president for policy and public affairs at USGBC, doesn't think so. "So far, we haven't seen any slow down," Moore said. "Our green buildings numbers are really strong, our membership numbers remain strong. In fact, we're at record levels across the board, from registrations and certifications of projects to the number of people taking the LEED AP test. They're all way up."

At the Greenbuild conference in Boston this month, Nancy Floyd, founder of the clean tech venture capital firm Nth Power, echoed Moore's sentiments. "The economic downturn will actually be good for this sector," Floyd said, "because the market meltdown is accelerating innovation. There are opportunities now because builders and decision-makers have more time to consider new ideas. There also is more competition among builders; so some will differentiate by adopting green building products and practices."

So, if more and more green buildings are being built, and consumers are increasingly satisfied with green buildings, the logical conclusion is that green real estate professionals should have more opportunities to help facilitate these transactions. While your EcoBroker® training ideally positions you as the most qualified real estate professional to handle these kinds of deals, you can't possibly expect deals to just fall into your lap. So how can you capitalize on the continued vitality of green building?

Maybe the time has come to revisit some of the concepts you studied in the EcoBroker Green Market Advantage™ course. Perhaps you should take another look at the online marketing materials that became available to you once you earned your designation. If you haven't completed your training, the rapidly approaching holiday season may be the gift of time you need to finish, setting you up to hit the ground running in 2009. Maybe you could get more closely involved with your local USGBC chapter and its builder members. Regardless of which path you take, a variety of opportunities are out there for you to build business and make a difference in your community.

Another piece of the green housing pie that the USGBC believes will be full of opportunities during this recession is green home retrofits. "This is an incredible opportunity for the industry to turn its focus to existing buildings," Moore said. "In any given year, new construction makes up only 10 percent of the overall building stock. But now, there will be fewer people building but just as many people wanting sustainable living or working environments." While helping a client retrofit their home may not result in a commission check, it is yet another way to provide real value to your clients, which will always create loyalty and referrals.

The fact of the matter remains that more green properties are being built every year, and the occupants of those buildings are increasingly satisfied with their purchase. Green building and remodeling is truly hitting critical mass, even in one of the most challenging economic times of our generation. Someone is getting hired to sell these properties and it might as well be you. Certainly no one is more qualified and more deserving than an EcoBroker®.


Sources:

http://www.fypower.org/res/news/green-homes.html
http://energypriorities.com/entries/2008/11/nancy_floyd_greenbuild.php
http://www.usgbc.org/Docs/News/Green%20Homes%20Affordable%20and%20In%20Demand%20-%20Press%20Release%20for%207-24%20am.pdf
http://greensource.construction.com/news/080725GreenHousing.asp

http://www.archpaper.com/e-board_rev.asp?News_ID=2950