On this Summit Roundtable we discuss an actual casestudy of the ROI of solar on short term rentals, mid-sized multifamily, and how delicious wild game tastes when you carry the elk off the mountain yourself after the hunt. Sponsored by: Aspiration Bank--Eliminate your carbon footprint with set it and forget it roundups that plant trees with every purchase and get cash back shopping with environmental and socially conscious retailers.
On this Summit Roundtable we discuss the ROI of solar on short term rentals, mid-sized multifamily, and how delicious wild game tastes when you carry the elk off the mountain yourself after the hunt. Featuring motivated and mindful investor Blake Dailey and sustainability advocate Logan Boesch.
Connect with Logan on Instagram
Connect with Blake at multifamilyjourney.com
Sign up with our link to keep the show running: Change Your Bank, Change the World learn more at Aspiration.
Blake has skyrocketed in the investing world starting 18 months ago with his first purchase and now has 85 doors. His systematic approach has yielded an almost 100% occupancy rate this past year despite covid.
Logan grew up on a corn farm in MN and bought his first solar panel at 15. Today we’re going to listen to them brainstorm with actual numbers on an airbnb property with 9 months of utility data to decide if solar is a good investment for profits and polar bears.
If you’re ready to take the leap into renewable energy for your real estate business, then this episode is for you!
INSIGHTS AND IMPRESSIONS
We dig deep into the key features of what makes solar a good investment on commercial properties, especially Airbnbs. A few key terms like NOI and income approach are thrown out there, no worries—all that means is that if you are the landlord and paying for utilities — adding a power planet to your roof will drastically affect the valuation of your business/investment.
Unlike single family homes, most “commercial” properties are valued based on the income they produce minus the expenses. The financing is important, but separate from that equation and makes it a bit confusing - but a great opportunity to focus on efficiencies to improve the value of your business.
For larger multifamily commercial properties with individual meters for tenants, it may make financial sense to consider solar based upon the orientation of your roof and the amenities the owner/investor must pay for.
If you’re ready to take the leap into renewable energy for your real estate business, then this episode is for you!
Learn more about Blake and his journey at multifamilyjourney.com
Connect with Logan at Bailiwick Capital and Instagram.
“The utility companies are slumlords, what does Texas think?”
Learn how your green can grow more green for your portfolio and the planet! Visit us here for everything you need to know: www.sustainableinvestorsgroup.com
Schedule a call where we can discuss your investing needs, outdoor adventure plans, or just to get to know each other.
Special thanks to Blake Dailey and Logan Boesch for taking the time to share so many great insights with us.
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Until the next time, Climb Your Mountains.
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Does Solar Do Good On Short Term Rentals?
[00:00:00] morgan: welcome to the art of sustainable investing. A show for outdoor lovers. Curious about the connection between purpose and profit. And today is one of our very special summit round tables. We'll remerge people you wouldn't expect to bridge sustainability and investments.
And today's question is the solar on short term rentals. Do good. And from the sustainability side, we have Logan bash here from ballywick energy. Hey [00:00:30] Logan, how are you? I'm very good bargain. How are you doing today? Fantastic. The sun is out, so I'm very happy. We like these seven days. Yeah, it's a little cold here today for being in Florida, but uh, probably should have a sweatshirt on, but we'll take it.
Yeah. Tell us where you grew up. Yeah, so like I said, I'm from Minnesota originally lived there, basically. My whole life grew up on a farm there where, uh, we, we grew corn and soybeans [00:01:00] and I mean, that's really all, I knew kind of a thousand people and I felt like there was something more to the world. So I wanted to kind of get out there and see, and when I was 15, I actually bought my first solar panel.
Cause I always thought solar was a really cool energy and it's like free energy from the sun. Why not? So use that to like charge things on the farm, like tractors and stuff like that. Everyone thought I was crazy. And that was one of the, some years ago. Now, [00:01:30] was there any, were any of your neighbors doing the same thing?
No, it was literally unheard of. , it was like right when eBay first got big and I was buying and sell this stuff on there, like crazy. And the solar panels came across and.
So I'm research in it. I'm like, this is so cool. It gets free energy. So I've bought one for 40 bucks and my like a showed up. My dad's what is the best stuff? What are you doing? I'm like, don't worry, don't worry. It should be free energy. So, did that and then got [00:02:00] into commercial real estate out of college.
I went for, I was a finance major and, you know, realize that. Everyone can, for lack of a better word can do that. That's something where you're not necessarily making a difference in the world, uh, when you're just focused on that. So I, I realized with solar and the return on investment that you can get from that, if you can couple that in with real estate, then that was kind of my life calling and I've spent six years strong and I'm [00:02:30] loving it.
So. That's awesome. What are some of your earliest memories of being passionate about sustainability or the natural world? Yeah, I think the, the, the seller on the farm I think was really, really important to me. And then even with, with like farming, you know, we were always trying to do things to, you know, conserve where we could, as far as grow our own vegetables.
I mean, my mom growing up, we had. A huge [00:03:00] garden. Where are you going to? That was the thing you grow on your peppers, all that. And they're always tasted better than what you got at the grocery store. So, absolutely. Yeah. There's nothing like your own vegetables that you grow that has such a more intense flavor.
Right. And we are actually a good friend of mine. He, went elk hunting last year. , he got one and we were over at his house doing a barbecue the other day. And I was like, doesn't it taste so much better than that. It has like your blood, sweat, and tears [00:03:30] in it. And I feel the same way about all also know you can do it in a sustainable way.
Yeah. I remember. my father had gotten elk when I was a kid, but there was a dispute with a couple of other hunters. So they split it up. But that elk was in our freezer and little white packages with red stamps for months and months and months.
I don't think people understand how big elk are right now. It's insane. [00:04:00] Pull it out of the mountain, everything like on his back, that's got to taste so good knowing that you did that. Right. So I, I feel the same way about all food that you work hard for. So absolutely. It's got a different meaning to it.
So tell us about what you're doing now with your projects. Yeah. So we got a lot of different stuff going on in the, in the solar round. I'm sure anyone that's been paying attention to it at all has heard a lot about batteries lately. That's kind of the new thing. solar, you know, it's been around really since the [00:04:30] seventies and it used to be super expensive and the price has come down and at least here in the United States, , almost 80%, I would say the utility market now in the United States, it at least makes sense where you can break even, or save money.
And, you know, there's still a few, one offs here where it doesn't quite make sense, but, uh, with the administration change that we just seen, I think some of that, see, we're going to start to go away and it's going to be across the board. And, and as you know, obviously to [00:05:00] get to like Germany's level is, would be great.
You know, I think they're, they're really some of the pioneers in the industry and you know, me personally, I look up to them and, you know, that was always what we would look at and be like, can we strive to do that? Like, Yeah, a friend is actually asking me about investing in a solar farm last week and another friend as well.
It's just starting to become part of the normal consciousness, but here in Germany, I mean, I live in a it's not [00:05:30] necessarily economically depressed, but it's certainly not a very wealthy area. It's a lot of farms, villages.
There's not really any big industry, besides, wineries pretty much, but you see solar panels on every farmer's carport every year. Houses in town. just fields of solar panels next to the freeway, or sort of in-between pockets of the neighborhood and it. I haven't been to the States for a few years, but are there places in the [00:06:00] States where there are these kind of, fields of solar panels?
Yeah. Solar fields are, really big here and then another there's there's fields and there's gardens. So it was a little bit different. A garden is where a group of people get together and they say, Hey. Uh, I live in an apartment. I live in a condo. I live somewhere where solar doesn't make sense.
So let's find someone that can build this garden megawatts worth, and then you can buy into it. And then you're, you actually have [00:06:30] ownership in this and you get to pull some of that electricity from that since you can't have your own system on your own property. And then the fields are what we see, like what utility scale they do.
the States make different mandates that we have to hit, the utility has to hit. And so they started building these huge solar fields out in the middle of, , a field off the interstate or wherever it is. We have a lot of here in Florida and throughout the United States, but their utilities not realize that they can [00:07:00] incentivize homeowners to go solar on their houses.
And then the homeowners actually pay for it, but it's a twofold benefit because the utility gets help hitting their mandate and then enough to spend money out of pocket to build these solar farms. And then the homeowner actually ends up saving money on their electric bill because the cost of the solar is less.
Than what they were paying for electricity. So it kind of creates this win-win and then obviously we're in the middle because we [00:07:30] get to do the install servicing and maintenance on the system. That's our residence, if there's a solar garden, the people that buy into it, do they pull that electricity directly or are they getting some kind of, yeah.
Yeah. So, so it's interesting. I'm glad you mentioned that. So usually the garden might be, you know, a hundred miles away. From where, you know, the main buyers are in the apartment or the city or wherever that particular person is. So it's kind of like, it's [00:08:00] like a tit for tat. So it's like, all right. The garden's really pumping in a thousand kilowatt hours just for round numbers.
And then there's 10 homeowners, each taken a hundred. A lot of times they're not getting that direct energy. Right. It's just, they're counting the meter here. And they're saying, okay, we got our thousand here and then they counted their meter over here, counts backwards on their house. And they get the credit there.
So, but they're not actually using the actual entity. Whereas once you put on your house, you know, you're like, Hey, this is my energy that I'm producing. I'm using. So there's a little bit of pride of [00:08:30] ownership that goes in with that too, that we see. Yeah. Yeah. It's a little bit more direct if it's on your house.
Right. So, you know yeah. You look at it, you feel it, you see it, you see your meter spinning backwards every day. Like I was just stopped looking at mine this morning, perfectly sunny day. It's just. Crank and backwards and you can just watch it grow up. It's it's pretty cool. So it's a good feeling. Yeah.
That is called. Are there situations where neighbors can band together and share amongst each other on some kind of like small micro grid or, [00:09:00] you know, sharing situation because maybe one house over produces solar. Right. Love that question. So I'm a huge fan of micro grid. And that is another thing I would say batteries.
It's like the hot button topic right now and solar, but then next one is micro grid and it's exactly like you said, let's build this whole new sustainable neighborhood. No, you don't even do like community, like real gardens in there where you can have your little plot where you can grow some food and do some [00:09:30] different sustainability things like that that we like to see.
And then, like you said, so Let's say my neighbor, Jim, over here, he went on vacation and he's not using his solar, well, and if I've got, my parents or someone in town visiting, and I'm using more power than what my solar is doing, you can actually meter that with Jim and use his power. And then when you're gone, he can use yours.
It's kind of a give and take. And those sustainable communities, I think are going to be really, really huge, where we're going to get to the point where you might not even need to tie into a [00:10:00] utility. Cause that one community is sustainable on its own with all the neighbors, having solar and a battery, which I think is going to be incredible.
Well, yeah, I mean, especially with what happened in Texas recently, I'm sure there's a lot of communities that are between the outages like that or wildfires where the power shut off preventatively. Like this makes a lot of sense. Yeah, you got, you got your neighbor or whoever it is next door helping you out just in case your battery and your solar doesn't have enough for whatever reason that [00:10:30] is.
But as a community, as a whole, you know, there's power in numbers. Right? So we have enough when we have 50, 60, 80, a hundred houses on that one particular micro grid. So yeah, it's really cool. It almost hearkens back to, you know, the village concept or we'll start taking care of each other and connecting a little bit more.
Yeah, it's a community. And then, you know, it's no different than really like an HOA type deal. Right. So, yeah. Yeah, I guess so it's like an energy HOA. Yeah, exactly. That's good. Coin that coin to ask it will be worth than [00:11:00] money trademark. Yes. So, what do people get wrong when they're trying to make impact with renewable energy?
Okay. I think, the solar industry has gotten started to get a little bit of a stigma on it.
Cause there's been a few companies that are like a pop-up fly by night deal, where they're just looking for a quick money grab. And, and I mean, I think that's wrong. Like I said, this is my passion. I'm planning on doing this for the rest of my [00:11:30] life. It's something that I love and it really poured my heart and soul into and moved across the country to do it.
And you know, there's, there's a lot of false information out there just like with anything, right . And then it's awareness of, getting in front of the right people and being able to articulate the correct information to them so they can understand exactly what it is and make the decision that makes sense for them and their family or their business, you know, whichever it is that that's looking at doing seller.
Yeah. Do you think your background [00:12:00] growing up in farming in the Midwest gives you a special edge? When you're trying to talk with people who might be skeptical. I think so. I, I do, I try to always be as transparent, upfront with people as I can.
And, you know, there's been people that I've said, you know, maybe sell it. Doesn't make the most sense for you. We're going to have to cut out 10 trees and do this and know your utility rates only this and no, I'm okay with letting them know that, Hey, if you're making this decision today, Yeah, it's not for money it's for the environment.
And [00:12:30] some people are totally cool with that. I had a lady call me the other day and she was like, Hey, I don't care about the savings, anything like that? She was 68 years old. I think she was like, I know, like I want to pay cash for it. I know I'm never going to recoup my investment, I want to help the environment.
That's part of my plan. Sure. And there's a lot of different paths for different people, for sure. It's it seems like one of these, you know, solar, maybe I'm not sure about the battery side of things, but the, the [00:13:00] panels is, is this something that you would expect to think about, you know, like as if you were putting in a furnace or an air conditioning, is it something like that expense where you expect it has a certain useful life?
all the systems that we do, whether it's commercial or residential, we're going to do a 25 year warranty on it. And some of them, you can pay a little bit of extra and do a 30 year warranty. So, like, I know you mentioned furnace, AC, things like that. What kind of warranty do you get on a product like that typically no longer than [00:13:30] five years maybe.
And it's probably pro-life so, the cool thing about seller is it's once you get it right in the quality control on the front end, it's done correctly. It's like a set and forget it type deal to get it up there on your house. There's no moving parts. You don't have to worry about a motor going out oil it or grease it or anything like that.
logan: You put it up there, it produces electricity and life is good. There can be a little one off, but for the most part you set it and forget it and you're saving money. And the payback [00:14:00] is anywhere from like in California. You're seeing paybacks under two years. We just did one last year and his payback, it's right around 5.2 years on a commercial building. Right here in Panama city and you know, he's stoked.
So it's, it's great. Yeah, that's fantastic. All right. Thanks Logan. We're going to move on to the other side and introduce our motivated and mindful investor. Blake daily fun fact Blake, his wife and I are both physical therapists.
[00:14:30] Yeah. That's awesome. Yeah. That's I think that's how we actually connected for the first time over LinkedIn and we're in the same mastermind group. I was like, I didn't even know that. So that was good. Absolutely. Thank you so much for joining us. So we'd like to get to know our guests a little, a little bit.
can you tell us what it was like around the dinner table as a kid growing up, around the dinner table as a kid coming up was more kind of informal for me. I'm from a small town and had a single mom. . Where did you grow up? I'm from a small town in Indiana called gas city. And we don't have a lot of natural [00:15:00] gas. That's where the name came from, but we do have a lot of gas stations. So a lot of how many gas stations, in our town of like 6,000 people, there's eight or nine gas stations on like our one main street.
not only are you an air force officer and apartment syndicator, but you're also a brrr and Brr'er.
Can you tell us about that?
Blake Dailey: Yeah. So BrrrnB is just a strategy. And for those that aren't familiar with the BRRR [00:15:30] strategy, it stands for buy rehab, rent, refinance, and repeat. So it's just a way to, you know, put your capital in a deal, fix it up, get it rented, then refinance, get your capital back and you can take it and do the next deal with the same initial capital.
And just as like the, uh, you get velocity of money with that strategy. So that's been a big for my growth. And then. My wife and I, our first investment property was a VA house hack. So VA loan house. Heck, um, and we rented out the extra unit with Airbnb. So that's how we got into the Airbnb space. And then [00:16:00] we started doing burgers and I was like, let's combine these because I think w I thought it would work.
And then it ended up working really well. We got really high cash flow by renting them as Airbnb rentals and then refinancing out to go buy more. Yeah, that's very, very interesting. I never heard of anyone doing that, but it makes a lot of sense. I was particularly interested in how you would focus in, on properties that would have a granny flat or like a smaller apartment that was included.
Yeah. So all of our current. [00:16:30] , Airbnb is we have seven of them and each property is a main house with a guest suite or guest house or apartment of some sorts. So the first one we bought was a three-two house with a attached one, one apartment mother-in-law, suite efficiency, you know, whatever you want to call it.
and the next one we bought was like, Seven blocks away as a pre-foreclosure and it was a house with a pool with a detached guests. We, so the way you can monetize us was the way I figured out we can monetize those. The best is you. You take those two units and create three [00:17:00] listings. So you make a listing for the main house.
You make a listing for the smaller unit, and then you make a listing for both of those combined for larger groups. And they all, like all of those listings are linked. So if the smaller one books, it blocks off the bigger whole listing, if the whole listing books at books off or blocks off both smaller listings.
So by doing that, we're we were able to, Capitalized are like the nights that each property was, producing revenue. So if you look at our vacancy per property, it's like virtually [00:17:30] non-existent because at least one unit is booked and like each unit has like 90 plus percent occupancy individually.
So it really, , just capitalizes on like your occupancy and the revenue you can bring in. Yeah, absolutely. And it's also nice too, because you have that added density. when thinking about from a sustainability perspective, that's nice to be able to have that capacity. Yeah, absolutely. It gives you a higher yield per property.
So you, you know, you're able to make more with less, I guess. [00:18:00] absolutely. And where are your properties? So all of them are in the Panama city area and then currently rehabbing an eight unit. That's going to be a larger and B that's in Fort Walton beach. So they're all along the panhandle of Florida. Lots of sun there.
Lots of sun. Yeah. So Logan and I have talked about, putting solar on them before, , even the duplex that we own together. We talked about putting solar on it, but I think we, we came to the conclusion that doesn't have a South facing roof. So we're like, eh, maybe we'll come back to it later. [00:18:30] Very cool. can you share some details about one of your recent, investments? Yeah. So, two really recent ones. First one was a 66 units syndication. That was my first indication. And, with my partner. So we found that in, in Greensboro, North Carolina, raised the capital and close the deal.
So, my role in that partnership was to bring, a majority of the capital and to. Manage the, the investors and the reporting of, of the asset and the other people that are in that [00:19:00] market are doing the day to day operations. And we all kind of come together. So divide and conquer on that, on that deal.
And it's worked out really well. And then the eight B eight unit burn B I was talking about in Fort Walton beach. That's a complete gut job renovation. So that has been, a headache, but a cool process at the same time. So going through some, new things first. Purchase in Fort Walton beach. So dealing with their city, ordinances and codes and yeah, the planning and zoning commission has given us some headaches, but we made it through that.
[00:19:30] So, um, yeah, that's going to be set to be done here in about a month. So, uh, getting that furnished and up and thinking about. Managing that one now. So working towards all that. , the Airbnb properties? Are you targeting vacation people or, traveling professionals?
Yeah. So it is really a good mix. And what I really like about this market in Panama city and the market and Fort Walton beach is that yes, their debt, their vacation destinations, but they also have other [00:20:00] economic drivers and. That brings people to the air. So both areas have military bases, both various have two, uh, military bases within, you know, 15, 20 to 25 minute drive.
So we have here, we have Tyndall the air force base, and then we have the Navy base. And then over in Fort Walton beach, you have Eglin and Holbert field. And the Mo the new property is right between those two. And then all my properties and Panama city are right between the Navy base, and the air force base.
So because of that, we got, we get consistent year round demand, you know, you're, [00:20:30] Revenue falls in the, in the off season, for sure. Like, like it does with all short-term rentals, but we still stay occupied. So we're still bringing in revenue where a lot of like pure vacation destinations, like a lot of the houses, um, on the beach side or Gulf facing or whatever, it might just go vacant for, you know, November, December, January.
So then you're paying bills on these properties that have no revenue coming in. I'll be, they, they produce a lot in, you know, March through October generally, but you have three months bringing in low to no. Um, revenue and you're definitely [00:21:00] in the negative, if you do have those rented out because the fixed costs are so expensive, but, uh, yeah.
So to answer your question, they cater to the vacation people. So we decorate them, theme them with the area. So it feels like a beach vacation spot, but we have demand from people outside of just, it sounds like you've really nailed it on a model that's consistent. Versus sort of, you know, the extreme highs versus the yeah.
Yeah. We, [00:21:30] we definitely have in what we've done is just kind of built, you know, a criteria that we look for in a system to go execute on that. Like all my Airbnbs aren't beachfront I purchased them anywhere from like 80,000 to 170,000. and now they're worth anywhere from two to two 50 after the rehab and renovations and stuff like that.
Whereas your beach properties are like 500,000 and up. So you get a cheaper property that still brings in that higher revenue. and then just by knowing your area, catering to your customers, which people come to [00:22:00] Panama city because of the beach. And if you can incorporate that into your, you know, Themes and things like that and how you decorate and create your listings and all that.
It draws people in and allows you to have your listing stick out. So it's, it's been working out really well. Now I've got to ask, when did you start your journey investing?
So we bought our first property in July of 2019. So like a year and eight months, a year and eight months. And you now, how many are you up to? I have 85 units, so [00:22:30] that's why I filed great job. Thank you. I know them are getting rehabbed right now, but yeah, 85 is the total. That's fantastic. What's your, what's your reason for doing this work?
I mean, you're a full-time air force officer, correct? I am. Yeah. So lot, lots of free time, as you can imagine, working full time and investing like this. but the big, Y I mean, I think it goes back into, kind of where, where I came from early in life, not having that, that structured family life [00:23:00] and wanting to do better for, my family when.
Nicole, my wife and I have our kids and everything like that. So it really, really ties back to that. But also to, uh, just be financially free. Like we worried about money growing up, it was, it was money was tight. So, um, growing up in that, I was like, you know what? I want to go be in the military and make a ton of money.
And then I found out in the military, you don't make a ton of money. So investing is a way for me to, you know, chase financial freedom, which, you know, which is that kind of common [00:23:30] theme, but really to produce for my, for my family and not have it be a financial struggle and just to be financially secure and be able to travel and do things and, and spend time with my family and kids.
And we have them eventually. Yeah. And especially starting this young, you've got a leg up on almost everyone. I know. That's very cool. And so this is my favorite part of the show where I sort of step out and I'm just going to let you two talk to each other around this question of, does solar do good on short-term rentals?
[00:24:00] All right, Logan with something brother. How's it going black. This is funny. I think we should say for the list. And there's like a Morgan was not aware that we knew each other. She was like, Hey, we were talking about doing the podcast. And I'm like, she's CC'd us on the email. So we were all in it together and she's like, I think you two would be really good.
And I was like, yeah. Actually Logan is one of my very good friends. Like we mastermind every week, you know, play Spikeball go, you know, go kayak and all that kind of stuff and, and own property together. So like, this is, this is perfect. And this is something that we've talked about [00:24:30] offline.
Probably not as deep as we will today, but something we've been thinking. It really, it really is wild. I have no clue that either one of you knew each other and I'm in Germany and you guys in Florida. Small world at the end of the day. so where do we dive in? So this solar, this solar in short-term rentals.
So, I mean, I just want to hand it over to you. Like, what do you think the benefit is on the investment side? Cause you own, you own property as well. And then we've talked about, you know, maybe putting it on some of our investment properties. Um, so what, what's [00:25:00] your take on it? Just high level. Yeah, I think probably the best way to start is, you know, proof of concept on what I'm doing right now.
I have a two unit, uh, Airbnb at the beach that I just started Airbnb being, uh, last month. So that was my first full month. And I've had solar on it since I was living in it first and I started Airbnb in it and I've had solar on it now for three months. The, uh, [00:25:30] average utility bill that I've been getting at this particular unit is just under 200 bucks a month.
And I haven't even been banned in the summer months yet. We're running the AC. Well, the last month I just got the bill and it was $21. So. I mean that in itself, 80% of your costs. Yeah. Yeah. And then, you know, even when we're talking about any sort of like commercial property, but in, [00:26:00] in general with, uh, let's just keep it in.
Multi-family when you're taking an expense and you're trying to put a cap right on the property, just go and sell it. That expense is going to come right off the top. So let's say you either pay for the solar outright and you have zero expense or you finance the solar and you put it below into where it's going to be debt service, and it's not going to come out of the expenses.
That's going to [00:26:30] increase your value of that property. You know, put a cap rate on, let's say your power bills, a thousand dollars. Let's say you save a thousand dollars. And you put a cap right on at, at 6%, that'd be that's $60,000. That's a ton of value because how those commercial properties are valued by the, by the income they produce.
And that's all they care about is the income approach when you're talking about an investment property. So it's such a huge incentive to be [00:27:00] able to take that expense and move it down into a debt service or to take that expense and move it out completely. And then the other piece of that is the tax incentives that are available right now.
So you're going to get 26% of the system paid for, or back on you, a credit on your taxes. For, just for putting the system in, and then you're going to be able to depreciate the system on an accelerated depreciation schedule. where you can take up to a hundred percent of [00:27:30] the depreciation all in year one, or you can spread it out if you'd like to.
So the way it ends up, depending on your tax bracket, you end up getting about 50% of the system paid for by the government too. Yeah, that's good. So basically you spend $10,000 on a system just with that tax credit. You're getting $2,600 back when you do your taxes. And then, you know, if you're in that higher income bracket or just want to offset your income, then you can take that depreciation and lower your taxes there.
Is that correct? Correct. Yep. You're going to say, you're [00:28:00] going to get a double Def, you're going to get to PIP it on the tax credit. And you're going to get ahead of began with the appreciation. Is that right? Separate from the tax credit that ended in like January 1st. Yeah. So actually that tax credit got extended, which is really cool for our industry.
Yeah. Yeah. That's really good for you then. Um, or really anybody that's looking to get solar, and that would be really, if you're talking multifamily properties, you know, for the 66 unit, for example, that we just purchased really, we'd only want solar on that. If we're paying the electric cars, if the [00:28:30] tenants are paying it, I mean, would there be as, as big as a benefit because then, you know, you're paying for a large commercial thing like that, that could be a.
A hundred thousand dollars expense that you, as the investor would see no return on it or, or would you, that's a great question. So on commercial properties like that for multi-family where it's individually metered, then my suggestion is strictly to offset the cam charges of the electricity. So if you've got a pool, you've got a hot tub.
You got a common laundry area. [00:29:00] When you have this, when you have a bigger complex, for sure. Yes. You're going to use that to offset the amenities meters. You know what I mean? That, that electric bill still on properties could be 10 grand or more a year that you could offset, which on the six gap is, could, can make it up for you.
So for example, on your two unit, is that individually metered? That is individually metered. So what I did with that is I put one system on the roof. So it looks like it's one system, but then you can run [00:29:30] a certain amount of panels into each meter. So I'm like, okay, this meter, the one-sided of the unit is, it's a three bedroom and the one's a two bedroom.
So I want to use it a little bit more power. I run up two thirds of it in one side, third of it. And the other side of it is offset, both on that. So it works out well. Gotcha. That makes sense.
So this is the electric bill for the property, Logan and I owned together. It's a, it's a duplex, but it's got one meter. and we for a little bit of background, like we talked about this. [00:30:00] Shoot last year when we did the bird together on it, about putting solar on it. But I think at the time we decided not to, because it didn't have a South facing roof, so it didn't catch as much power.
Um, so I think that'd be a good thing to talk to. And then I cannot tell you the actual build number. So I want to be seated. Oh boy. That's good. Good big. With with seller, you know, just to take it down to like the very, the simplest form. If you have a South facing roof, your return on [00:30:30] investment is going to be better.
If we go east-west it's, it's not significantly better where it doesn't make sense on an east-west. It's just that your payback is going to be a little bit better because you're going to collect more sun. Throughout the year and therefore more sun, more kilowatt hours, kilowatt hours, smaller bill, less stated, pretty simple math.
Right? So on that particular property, we weren't sure, where that bill was going to come in at, so it's like, well, Hey, let's look at it and say, now, if I needed to be seated for this, and it's going to be a $500 bill, we're [00:31:00] probably going to have to revisit this conversation, not quite 500, but I haven't pulled up from last July until this March.
So we've got nine months of data here, but this month in March, like it's not even. Hot yet. We haven't even had a day break, you know, probably 85 in Florida yet. And it's three 87. It's still pretty expensive. I guess there's two, like it it's worth mentioning that in the bottom unit, there's two people living in the top unit it's as a total of 3000 square feet.
So it's a pretty big duplex [00:31:30] and the top unit. I think there's a family of five in the, in the four bedroom up top. Um, So it's, uh, it's a, it's a large house and there's people, you know, using more electricity cause there's more people. Um, so for three 87 in March last, uh, what was February? February was, is a 66 month $66 change.
So it was like low, low three hundreds. January was. two hundreds. [00:32:00] So it's going up a little bit as the, as the temperature takes up a little bit. So, and they probably been running the heat a little bit in there too. I would guess we have something a little bit in January and February, but yeah, definitely the summer is where you're using like the AC.
Yeah. So that's going to be like, you have to, to survive down here at a, uh, AC go Island to tenant last summer. And it was like, I swear. They're like, got about to cancel their lease. They're so mad. I was like, I don't blame you at all. [00:32:30] So yeah, for, for this one, I mean, we've got a good example here for, for this one.
What would you, what would you know, this is our privacy. We have a good example of it. This, if this is somebody else, if this is a new investor, what do they look for? to offset their expenses on a, because we pay the electric bill on this, cause there's only one meter. So that's why we're looking at it.
Um, that one, if you're paying the electric bill, that's the other thing, right? Is the tenant. They're they're just a little less [00:33:00] conscious, right? We've all been to an Airbnb or a hotel room. And the first thing we do, we go in there crank the dial down to 60 or whatever it is because it's hot and we want to be called and we sleep and we'll leave the lights on and leave the bathroom fan on and leave.
Then we opened the window and that's hopefully if we seen it off about it. So, uh, you know, people are just a little bit, a little bit more frivolous when they know they're not footing the bill. So that again, that's when it really comes in where, you know, like the example [00:33:30] I have here at the beach where I have a smart thermostat on there.
So I've been monitoring, , when people come in and it's just like clockwork, the tenant that came in the other day, I went on and checked it right after they checked in, it was set at 70. Great. Now I'm a 60 right when they walked in. Right. So, so we know that stuff's happening and that's, like I said, it really makes sense when you don't have to worry about that expense of getting hit with that $400 bill or $600 bill.
[00:34:00] At the end of the month. And then all of a sudden your Airbnb profits get cut because you didn't realize you had these, these costs. Right. And definitely, yeah, that's a big, that's a big thing. Like the Airbnb world is because you pay all the utilities, you know, as the, as the homeowner, you pay everything and the, the guests just pay you rent, which you have to pay out.
So, um, I mean, I was looking here cause I got my Gulf power account, which is the utility company here. at my history and on all my Airbnbs, the monthly average is [00:34:30] two 20 to two 70 a month on an annual average. So if you can offset that and take 200 a month, that's 2,400 a year, you know, a little bit over that, depending on if you're able to offset all of that.
Or even if you cut 90%, you're still only paying probably a couple hundred a year. That, that goes straight to your ROI. That's straight to your straight to your pocket that you can reinvest.
So if you're valuing that on an income approach and you put a six cap rate on that, that's the [00:35:00] 2,400 bucks. I mean, that's 40 grand of value.
You just add via property. Plus the tax credit that you got from it is, is at least probably 40 grand, right. Or a tax credit and the tax depreciation. So it ends up. I mean, it's, it's an amazing investment. Like I said, I think you're, I think you're convincing me, man. I have to go over to crystal and read the meter and look at these past bills and get this done.
And that's some of the fun part too, is getting to actually, you know, have that personal [00:35:30] one-on-one meeting with building owners, homeowners. And, and when they get that first bill and they call you and they're like, wow, you know, negative 20 bucks, $80. And it was, or, you know, it's usually somewhere in there and like their last bill is two grand and now it's 80 bucks.
It's a really cool thing. Yeah.
Yeah. I liked, I liked the sound of that already, especially because I have seven of them and I'm about to have 15 Airbnb units. If I can cut 200 per unit off of 15 units, [00:36:00] That's a, that's a big difference when you, yeah. And, and we do a lot of proof of concept too. I I've worked with different property owners before and, I had this one guy he owned, I think, 15 different properties and in these are bigger, , commercial properties.
And he was like, all right, let's do the one. See how it goes. And he got that first bell. And I mean, like I said, I think it was. In the thousands, I think it was like 2,800, four grand, something like that. And his new bill was like [00:36:30] 200 bucks let's go on with the next one. That's awesome.
Yeah. Before, before we, had to get out of here, thinking from the investor standpoint, how much. does this cost to the investor to start out with, and then, you know, we can get into like how they get their ROI, like their breakeven point and all that. Sure. Yeah. That's a great question too.
That the main thing with solar is
If you have a completely perfect South facing roof, but I can put all your solar on, it's going to knock out a hundred percent of your bill [00:37:00] that is going to take less panels that if you have an east-west. So in the way solar works it's per panel basically. Right? every panel you add that expense goes up a little bit more and more labor, more materials.
the range, and I know this is silly to even give a range, but , we've done, uh, a project for, at and T and I was involved with that project and that was a $1.5 million project. And then, as a matter of fact, that I think the guys are doing this install today, the smallest project I've [00:37:30] done this year in a while was for this nice little lady that wanted 12 panels on her beach cottage.
A lady, she was like, I want to do something to help the environment, , save a little bit of money and put wall panels on her place. And I think it was Eight grand or something like that.
So, so that there is a wide variety and we do like to service , anyone that wants to look it'd be more sustainable and helping the environment and saving money and we want to help them. But I would say the average Logan sales skills, just rewind that for like the last [00:38:00] minute and feel have you wanted to buy some solar?
That's awesome. All right. So if we just say we're, , paying 20 grand for solar for the 1500 square foot house that has a $200 a month. Electric bill. , , And you say you're paying 20 grand for that. Is that 20 grand out of pocket? Is that 20 grand financed?
, how has that payment structure work? And you know, if you're saving the money in the electric bill, are you paying additional money for the solar? So like what's your actual, yeah. [00:38:30] So, so if you pay a cash out front, so let's just go 20 grand, like I said, nice round number, and you're going to offset your $200 electric bill.
So you pay it. And you're going to recoup that cost, , anywhere from, in residential, here in Florida, where we're around the seven years is what we're looking to hit on a break, even up to 10, possibly, depending on like orientation, few other things like that. But that's really probably what you're looking at.
logan: Realistically. Now, if utility rates go [00:39:00] up, as they usually do, you know, we can compress that down towards five. But I would say 90% of our customers do is finance the system so it's zero money out of pocket. You'd never pay a dime. And you're going to knock out your $200 electric bill.
And let's say, we're going to drop it down to one 50. So you're going to save 50 bucks a month. You're still going to have a little tiny hookup charges, a utility that's usually around like 10 to 20 bucks. So add [00:39:30] those together. You're maybe around like one 60, one 80. So you're saving 20 to 40 bucks a month without you paying anything.
It's literally just switching to renewable energy and you're paying less. Instead of paying more, plus you get that tax credit, whether you're doing residential or commercial, you get that tax credit back to the government too. Okay. Yeah, that's really good.
Blake Dailey: So before you're even talking about tax credits Or the depreciation, you know, the benefits you're going to get later on,
so you're going to save a big bulk of your utility bill and you just make that up [00:40:00] in that financing cost, but you're still saving off what your electric bill was. So you just count up the difference in that savings amount and then add any Tax benefits. And from an investor standpoint, I mean, you could honestly break that down into the IRR of your investment plus you're, , I like the whole thing.
You're being environmentally conscious and helping save the polar bears.
logan: We, we always compare renting to, owning right. So most people they've rented property in their life, and they're gonna pay that rental to the landlord who were the landlords. Right. We're love it. We get that check every month. [00:40:30] And what do we do with it?
We go and spend it on, redoing the property or we live off it or whatever, right. We, we that's our income. Now when that person goes and buys a property, they get a mortgage on it and they're paying towards owning the property. And every single month they own more and more of it. And eventually one day what happens.
That payment goes away. You own it free and clear for the same amount of rent still coming in the same amount of rants comment.
So with solar, it's the same thing. You're renting your [00:41:00] power from the utility. You're just cutting that, check to him every month and throwing it away and say, here you go, landlord, here you go slumlord.
Take my payment now, instead then the greediest slumlord, entire state of Florida they are, I'm telling you that's the utility . company. What was the last time they did it? What does everyone in Texas think? When the, when the slumlord came in and said, Oh, sorry, your power's out. We'll get there and fix it when we can.
Right. So, so it's unfortunate. So You can own your own [00:41:30] power plant on your roof, where you don't have to worry about answering to that slumlord , when they want to come and bump your rent next month. Cause they're already talking about, I just saw that an article today that Warren buffet, Elon Musk, were going at in about how to fix Florida.
And they're like, well, we're going to raise rates, but of course you are. Well, Your fixed payment on your solar is never going up. It's a fixed payment. You never have to worry about it. So. No, I like that. That's good stuff. I really like how you compared the utility companies to slum Lord.
[00:42:00] Yeah, that was a good, Oh, so like the, uh, the name of this episode, why utility companies are slumlords and how I'm here to save you from them. That's to be taken, that's just a universal thing. Love the environment. Don't care about the environment, but nobody wants to be taken right. Yeah, there's a, there's a guy I used to work with and California, he's hilarious.
He would, he would call it the great Satan deli. That's [00:42:30] hilarious.
Blake Dailey: I think you convinced me, but we definitely need look at it on Crystal and the eight unit, because I mean, the value of that property is going to be directly driven by the income and expenses. So that one I think would make for sure the most sense, that eight units South facing there's enough equity in them that add an extra finance charge.
Wouldn't put me underwater and plus it'd be safe. And so. Let's do it. Let's just let's let's go ahead. Where do I sign? Well, I love this, this summit round table [00:43:00] has getting results. It's very real. but as this is a show for outdoor lovers, I want to ask a final question. So what role does the outdoors play for you?
Oh, man, I think it's huge. Like I go, that's where I go to like just. You know, take it easy, relax, not work like last week. And I had the first weekend in a long time that I haven't just worked all weekend. And me and Nicole, we went to the beach, we went kayaking. We, we drove this new spring that we hadn't been to and that stuff that's like what fills my cup.
So getting out and doing stuff like that and just being part of [00:43:30] nature, like love hiking. So just anything outdoors. That's where I get my motivation and kinda my cleanse so I can come back and, I guess my more properties I burn myself out. Yeah. I understand that. It's almost a, a place to recharge.
Yeah, for sure. And how about you, Logan? What role does outdoors play for you? it's pretty similar, honestly. Uh, we brought me in like, actually, we'd been to the Springs together a couple of times, like you said, we play spike ball on the beach, which is, it's my favorite thing in the world. So anyone we need to look at doing this [00:44:00] week.
Yes. I think it's supposed to warm back up again. So we need to do that. and the hiking I would say is probably one of my favorite things. I actually went to New Zealand two years ago now. Um, before COVID right. And, there was a sign from 1908 where the glacier was in 1908 and there was one for 1990.
And then it was where it was today was I'm in. Yeah, hundreds and hundreds of yards away. [00:44:30] Right. And that was probably one of the most eye-opening things to me, why get up and do what I do and saving the outdoors because we're, we're supposed to be able to go and land on this glacier.
Unfortunately, it was bad and they weren't able to do it, but just to see that and. Uh, beauty and everything we have, and being able to know that I truly feel like I'm a part of saving. So, you know, it's for future generations to see is pretty important to me. So yeah. How sad would it be if our grandchildren didn't get the opportunity to go hiking or cliff [00:45:00] jumping, you know, That that's an unthinkable.
That'd be pretty mad about it. I want to do with my kids and grandkids, like take them out and see the national parks and all that kind of stuff. Yeah. Well, thank you guys for helping me build this, movement to tear down the walls between doing well and doing good. Logan, if people wanted to get in touch with you, if they had questions about solar or anything else, where should they go?
Yeah. Uh, I would say, um, I actually had another podcast earlier. I have my Instagram handle right there. It's Elvis Ash. [00:45:30] that's, that's an easy way to get in contact with me. That's actually my tick doc, Instagram, pretty much everything , so I reached out to me. There's these just like very cool.
And Blake, how about you, if anyone had questions about investing multifamily or Burundi's. Yeah, the best way would be to go to my website. It's multifamily journey.com. That's also the name of my real estate investing podcast. But if you go to multifamily journey.com, if you're interested in investing in real estate investing, there's free resources, that you can download [00:46:00] on there, like how to get started, how to buy your first property.
And then all my deals are on there. So you can kind of look at the, at the progression and see the behind the scenes. And then I'm on social media too. It's at Blake J Daley. Awesome. All right, thanks guys. Until next time, stay curious about the connection. Thanks for having us. We appreciate it. Yep. Bye bye.