All Forum Posts by: Glen Sonnenberg

Or you could just get a grout removal tool and grind it down manually. Depending on the size of the area which needs to be fixed this might be an easier solution. Below is an example of the tool.

http://www.zorotools.com/g/imagewindow/141062/

Verizon doesn't offer it but the HTC One is hands-down one of the best phones out right now. If you don't want to switch carriers then wait until after Summer. There are rumors that Verizon will cave and offer it. Read the reviews.

Given that the house is not securing this loan (as it is of a personal nature) then to be honest you should disclose the loan to the bank as a personal loan. The bank will take that into account when they determine how much you can borrow. On a personal note, if your intention is to borrow as much as you can against the house, I would suggest you use a chunk of that to make a principle payment to your parents. They were kind enough to lend you the money in the first place and deserve to have the note paid down (at least some) when you're borrowing against their "collateral".

From what I can tell, they take your average usage patterns from the past year and size the system such that it will be slightly higher than your average usage. The systems generate power during the day to bank energy credit with the utility and then at night you are using that credit to power your house. Also, the expectation is that during low-usage parts of the year you will build up a credit which you will burn through during peak-usage parts of the year. Probably why the one utility resets their credits after a year. This way they don't have long-term liabilities building up on their balance sheets.

As for maintenance, you're right that they do need to be cleaned. However, with the lease agreements or power-purchase agreements the seller actually monitor the panels to make sure they are operating correctly. In addition, they warranty the panels and repair them if they fail. That isn't the case if you purchase them outright though. I'm not sure I agree with your assessment that they have a 10-year lifespan. Most are saying 20-25 year and they model their financial returns based on that. That's why it's not clear to me how they justify a zero FMV after a 10 year lease. Not sure if the Feds would agree. :)

Lastly, I haven't seen a system yet which includes a battery backup option. They exist but typically are there just to protect you against brown-outs like a UPS system. I haven't seen any systems which allow you to charge them during the day and discharge them at night. I doubt that they would be affordable given the price of batteries.

Yeah, in addition, it appears that NV Energy is pretty stingy when it comes to their incentive program. They apparently are on target for the state mandates regarding alternative energy and don't have much incentive to rebate the costs of installations to many customers which is why they have strict limits on the program. I also don't know if you don't get the rebate in one year whether or not you are able to apply again the following year and there are no guarantees it will continue. Once the systems is paid off, it seems to be a pretty good deal but you have to pay the up-front costs.

With NetMetering rules the utility has to purchase the energy you put back onto the grid. However, it is applied as a credit towards future use. They limit the size of the system which you can put on a property based on the past usage history since the utilities don't want to be on the hook for huge systems producing power. For most systems, you'll generate a credit during the low-usage months and then burn that credit doing the high-usage months. I do not believe the utility will cut you a check for any credits.

I met with the SolarUniverse guy yesterday and he emailed me some quotes for both a purchase and lease option. My rental is a 4/2 approximately 2060 sq ft house. Using my tenants usage for the past year (they are pretty conservative and pay $175 a month on level-pay) they came up with a ~7.5kW system which would effectively zero out the electric bill on average throughout the year. We would still have to pay some fixed charges (facility, meter, etc.) which would come out to about $12 a month. Here are the numbers which I rounded off a little.

Purchase

$39.2k - ~$11.7k (federal tax credit) - $9k (NV rebate) = ~$18.3k

Being that it's a rental property, I'm not eligible for the federal tax credit so this kind of seems like a non-starter to me. For commercial installations (not sure if 2-4 duplexes count as commercial) you would be able to get the credit and also take depreciation.

Lease

$29.7k (they take the fed tax credit) - $9k (NV rebate) = ~$20.6k

This is a ten-year pre-paid lease option and they assured me that after the lease the FMV for the panels would be effectively zero so we would then own them. They also said that they have signed agreements which said that if there was a residual value they would pay it but that may create some complications. No one has any experience with this and they are hard to value.

Here's the kicker on both of these agreements. The Nevada rebate is a lottery system and is based on NV Energy putting up money to fund the rebates which varies year-to-year. This year for both residential and small business combined, NV Energy is only rebating up to 1539 kW's of installations this year. Based on my math, that would mean only ~205 people will get rebates based on our size system for all of southern Nevada. The sales guy said he estimated I had a 70% chance but I think that's a wildly optimistic assumption. They did however include a clause in their contract that if I didn't get the rebate I could cancel the deal.

So, in my situation, here's what I believe would be the numbers.

My tenants pay $175 a month now. Subtract out the $12 a month fixed charges and that would mean $163 a month for electricity assuming the system zero's out the utility charges for electricity generation.

$163 * 12 = $1956 / $20653 (cash/lease) = 9.4% return

The sales guy said they have a bank who will do a 12-year amortization of the lease payments with zero down at 2.99%. That cuts into the return and doesn't count for any vacancy. At the end of the day it's pretty close to break even but I'm not sure I want to take on the additional debt. I think I'm going to wait until SolarCity makes it to Nevada and do a power purchase agreement instead. I haven't got enough usage details on our Phoenix property yet to get a quote. We'll see in a few months.

PS. If you are interested in this for 2013 you need to hurry. The deadline for Nevada rebates is May 17th and it takes a few days to process the paperwork. Good luck!

No offense but if I was a person who had $500k to invest, why would I become your partner and assume the risks involved with your LLC without any ownership stake in the LLC? If there were a personal guarantee required of each "partner" by the bank, that would make me even less likely to want to "invest" since per your agreement I wouldn't have any ownership stake to benefit from but much larger potential liability. The upside is I get my money and 8% paid back over 5 years. The downside seems significantly larger relatively speaking. I'm not an expert. Just throwing that out there...

What we've done is purchase a house near the university our son is attending (ASU) and have him rent out two of the rooms to students to cover the costs of the house. Are you planning on paying the $10k cash for the trailer? If so, why not use that as a down payment on a house and do the same thing? Technically we're renting the house to our son and allowing him to sublet the rooms to others to cover the costs of renting the whole house. If you are covering your son/daughter's portion of the rent you can charge them rent and then "gift" it back to them at the beginning/end of each year. In addition, you can pay your son/daughter to do the property management for you as a way to provide them with assistance which you can write off against the rental income as long as it's reasonable (we're using ~10% of the rent as a general rule). They will have to declare it as income but unless they have other income it won't be enough to generate any tax liability. Just a few thoughts...

My wife and I just purchased our 5th property and we worked with two lenders in Arizona. The first was Alliance Financial Resources, LLC. Unfortunately we ran into an appraisal issue and ended up using Prospect Mortgage (via Homepath) to get around the problem. Both of them were very helpful. The requirements are/were 20% down, 720+ credit score and six months reserves to cover the combined mortgages on all properties. We also had to provide lots of income documentation but it worked out pretty well.