by Nick Gromicko, CMI® 

Solar energy offers considerable advantages over conventional energy systems by nullifying flaws in those systems long considered to be unchangeable. Solar power for home energy production has its flaws, too, which are outlined in another article, but they're dwarfed by the advantages listed below. 

The following are advantages of solar energy:

• Raw materials are renewable and unlimited. The amount of available solar energy is staggering -- roughly 10,000 times that currently required by humans -- and it’s constantly replaced. A mere 0.02% of incoming sunlight, if captured correctly, would be sufficient to replace every other fuel source currently used. Granted, the Earth does need much of this solar energy to drive its weather, so let’s look only at the unused portion of sunlight that is reflected back into space, known as the albedo. Earth’s average albedo is around 30%, meaning that roughly 52 petawatts of energy is reflected by the Earth and lost into space every year. Compare this number with global energy-consumption statistics.  Annually, the energy lost to space is the combined equivalent of 400 hurricanes, 1 million Hoover Dams, Great Britain's energy requirement for 250,000 years, worldwide oil, gas and coal production for 387 years, 75 million cars, and 50 million 747s running perpetually for one year (not to mention 1 million fictional DeLorean time machines!). 

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• Solar power is low-emission. Solar panels produce no pollution, although they impose environmental costs through manufacture and construction. These environmental tolls are negligible, however, when compared with the damage inflicted by conventional energy sources:  the burning of fossil fuels releases roughly 21.3 billion metric tons of carbon dioxide into the atmosphere annually. 

• Solar power is suitable for remote areas that are not connected to energy grids. It may come as a surprise to city-dwellers but, according to Home Power Magazine, as of 2006, 180,000 houses in the United States were off-grid, and that figure is likely considerably higher today. California, Colorado, Maine, Oregon, Vermont and Washington have long been refuges for such energy rebels, though people live off the grid in every state. While many of these people shun the grid on principle, owing to politics and environmental concerns, few of the world’s 1.8 billion off-the-gridders have any choice in the matter. Solar energy can drastically improve the quality of life for millions of people who live in the dark, especially in places such as Sub-Saharan Africa, where as many as 90% of the rural population lacks access to electricity. People in these areas must rely on fuel-based lighting, which inflicts significant social and environmental costs, from jeopardized health through contamination of indoor air, to limited overall productivity.   
  
  
• Solar power provides green jobs. Production of solar panels for domestic use is becoming a growing source of employment in research, manufacture, sales and installation.
  
  
• Solar panels contain no moving parts and thus produce no noise. Wind turbines, by contrast, require noisy gearboxes and blades.
  
  
• In the long run, solar power is economical. Solar panels and installation involve high initial expenses, but this cost is soon offset by savings on energy bills.  Eventually, they may even produce a profit on their use.
  
  
• Solar power takes advantage of net metering, which is the practice of crediting homeowners for electricity they produce and return to the power grid. As part of the Energy Policy Act of 2005, public electric utilities are required to make available, upon request, net metering to their customers. This practice offers an advantage for homeowners who use solar panels (or wind turbines or fuel cells) that may, at times, produce more energy than their homes require. If net metering is not an option, excess energy may be stored in batteries.
  
  
• Solar power can mean government tax credits. U.S. federal subsidies credit up to 30% of system costs, and each state offers its own incentives. California, blessed with abundant sunshine and plagued by high electric rates and an over-taxed grid, was the first state to offer generous renewable-energy incentives for homes and businesses.
  
  
• Solar power is reliable. Many homeowners favor solar energy because it is virtually immune to potential failings of utility companies, mainly in the form of political or economic turmoil, terrorism, natural disasters, or brownouts due to overuse. The Northeast Blackout of 2003 unplugged 55 million people across two countries, while rolling blackouts are a part of regular life in some South Asian countries, and occasionally in California and Texas.
  
  
• Solar power conserves foreign energy expenditures. In many countries, a large percentage of earnings is used to pay for imported oil for power generation. The United States alone spends $13 million per hour on oil, much of which comes from Persian Gulf nations. As oil supplies dwindle and prices rise in this politically unstable region, these problems continue to catalyze the expansion of solar power and other alternative-energy systems.

In summary, solar energy offers advantages to conventional fossil fuels and other renewable energy systems.

 
 
 

by Nick Gromicko, CMI®
 
Purchasing foreclosed homes in desirable areas at below-market values can be a sound investment strategy. Appreciation on their original prices may be tax-free.  Buying foreclosed rental properties can provide positive cash flow, as well as valuable tax deductions. On the other hand, buying a foreclosure involves homework, patience, and a certain amount of luck. For those wishing to get a bargain house through the foreclosure process, it’s best to learn the basics.
 
​Four Ways to Buy a Foreclosed Home

• A presale is when the prospective buyer negotiates with the current owner before the house is foreclosed upon. Presale discounts can be considerable, but communicating and reasoning with the owner isn’t always easy; they might have legal problems, lost their phone service or electricity, or greet you with suspicion, having already been hounded and threatened by creditors. And after time and energy have been invested, the deal can fall through if the owner comes up with the money to repay their debt, or for any number of unexpected reasons. With persistence, however, the seasoned real estate investor can profit from presales. To find out about presales, you can try one of the following avenues:
  • Ask your local county court how to search new notices of default.
  • Find out if the County Recorder has data available online.
  • Look in the "legal notices" section of the newspaper for properties that are coming up for sale at public auction. Take note of the address, the property owner’s name, the tax ID, and whatever other information is contained in the ad.
• A foreclosed home may be sold at a public auction, in which buyers can expect a discount of 10% to 25% of market value. Interested bidders are generally required to show proof of financing, and must have a minimum cash deposit before they are qualified to bid. It might be impossible to gain entry to inspect the interior, too, which makes this type of purchase risky. The local building department may have permit records that can clue you in to the building’s layout and appearance.
• A real estate-owned (REO) sale is a transaction where a foreclosed house is purchased directly from the bank. These properties typically wound up in the bank’s portfolio after failing to sell at auction. REO investments are relatively safe, as there are no tenants to evict or hidden liens and, unlike properties sold at public auction, buyers can usually receive a mortgage to pay for them. And purchasers might even get an unused house; the slow economy has left many builders at the end of their construction-loan periods without finding buyers for the homes, in which case the bank will foreclose on the brand new homes. Unfortunately, REOs are usually offered at near-market prices to recoup the costs of property taxes, maintenance and legal fees. To find REOs, try the following:
  • Check lenders’ websites, as they may have a list of their REOs, along with contact information for the appropriate real estate agent.
  • Call lenders and ask to speak to someone who handles their foreclosures.
  • Check newspapers.
• The Department of Housing and Urban Development has tens of thousands of HUD homes whose previous owners defaulted on federally issued loans. After a period during which local governments gain exclusive buying privileges, they become available to individual buyers who pledge to live in the property. After another 10 days, investors may bid on the property. It’s difficult to make a profit on these houses, as HUD releases them at near-market values.

​Tips for Foreclosure Purchases

• Invest time in research and preparation. Those new to the field should spend some time learning the variables of foreclosure investing before making any purchases.
• Budget carefully to prepare for the unexpected. The house may require unforeseen repairs, such as a leaky roof or unstable deck. The price tag of the home itself is often just the first of a series of fees. What if you planned on rental cash flow to cover the mortgage, but you can’t find a tenant?
• Avoid buying a foreclosure sight-unseen. Try to see the house yourself before buying it, or hire someone to evaluate at it in your absence. Distant investors are buying up properties unseen in bulk, and they’re often unpleasantly surprised at how much they’ve been misled.
• Evaluate the neighborhood. If the foreclosure is rife with problems, but it’s in a desirable area with high property resale values, it may still be worth it to make a low offer. An area with several foreclosures or a high crime rate can undermine an otherwise good deal, however.
• Consider how long the house has been vacant. Building damage – and the costs required to make the house livable - generally increases with the time that has lapsed since the last tenant vacated. Pests are a particular issue in houses that have been empty for a long time, and plumbing defects and leaks increase in likelihood in such homes, as well.
• Examine the landscaping. Left unchecked, trees can send their roots into the foundation, and vines can creep into the windows.
• Has the house been professionally inspected by an InterNACHI inspector? Foreclosures can be notorious for damage suffered at the hands of past tenants, through both inadvertent and intentional vandalism and theft.

In summary, there are a number of ways to go about buying a foreclosed home, and buyers should exercise patience, persistence and careful planning before buying foreclosed properties.