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Archive for September, 2013

The Changing Landscape of Evictions and a Few Things Landlords Can Do About It – By Michael A. Brennan, Eviction Attorney

Posted on 01. Sep, 2013 by .

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The eviction landscape has changed over the past two to three years. Due in large part to an increased number of tenant attorneys, jury trial demands, court closures and staff layoffs, evictions are costing landlords more money and taking longer than usual to resolve. Tenants and their attorneys attempt to force […]

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Discrimination – The Good, the Bad and the Ugly – By Zachary Lawrence JD

Posted on 01. Sep, 2013 by .

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Oxford Dictionary defines the word discrimination as ..”The unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age or sex.”

If you are a prospective tenant in California, your rights are covered by […]

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Corruption in Your Own Back Yard – By Jon Coupal

Posted on 01. Sep, 2013 by .

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A recent front page story in the Los Angeles Times raised the curtain on a dirty little secret that local school officials don’t want the public to know. Many school boards throughout California have indulged in a process that can best be described as “bribery and money laundering” which grossly inflates the cost of […]

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History-Making Government Solar Incentives Now Offered! – By Ted Bavin

Posted on 01. Sep, 2013 by .

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Multi-Family Dwelling Owners to Benefit the Most!

For the first time in history, solar hot water systems (SHW) will pay for themselves in one to three years! This is due to simultaneous incentives now being offered by the state of California and the Federal government. This “perfect storm” of incentives has aligned to make this the most profitable time for businesses and apartment owners to invest in solar hot water systems.

Something like this happened once before in the late 70’s through 1985 sparked by the “Arab Oil Embargo,” with thousands of commercial hot water systems installed (many of which are still operating today).  However, under the new program, systems must be even sturdier and longer lasting, having to meet a long list of quality criteria including being freeze-proof and protected from over-heating.

Solar thermal systems (SHW) are quite different from solar electric systems (PV). Among other things SHW systems are based on an older mature technology and capture 3 to 4 times more eenergy per square foot!  There will never be a “breakthrough” in SHW as its’ design is as simple and efficient as “the wheel”.  We still use the same wheel design as was used thousands of years ago.  In the case of solar thermal, little has changed since it started being used in the early 1900’s.

Simply put, a solar thermal system is black material under glass which absorbs the energy from the sun…and if you run water through it, the water gets very hot. Since the technology won’t change, the only things which drive up the cost of an installed SHW system are the ever-increasing price of copper, aluminum and labor.

So let’s take a look at how the economics of this “perfect storm” of incentives works.  First, the Gas Company, through the California Solar Initiative (CSI), pays an average of 50% to 60% of the total cost (received within 30 days of completion).  Then the IRS pays you back another 30% as a tax credit, even toward AMT (Alternative Minimum Tax).  Finally, bonus depreciation lets you write half of it off in 2013, with the other half depreciated  over the next five years.

Bottom line: The average cash customer can get around 85% of the cost back in year one, with profit by year two or three.  Financed systems are usually cash positive from DAY ONE!   Those who might not benefit from tax credits and depreciation can also profit from SHW. They may want to consider a system which can be leased, installed and owned by a third party who utilizes the incentives, with you, the building owner, still benefitting from a less expensive source of hot water than you were previously paying.

EXAMPLE:  74 Unit Apartment, Cash Purchase, 35% Income Tax Bracket

Initial Solar Hot Water System Cost …………$115,000

Less CSI Rebate (after paying

35% income tax on it)……………………………- 40,366

Less Federal Tax Credit 30%……………………..- 34,500

Less First Year Bonus Depreciation

VALUE (35% bracket)……………………………- 20,527

Less First Year Gas Savings……………………….–   4,565

NET FIRST YEAR COST…………………………$ 15,042

COMPLETE RETURN ON INVESTMENT IN 2.5 YEARS 10 YEAR PROFIT = OVER  $54,000 

As is often the case, there is an economy of scale, with larger systems experiencing the fastest profitability.  My company, for example, is currently installing a 287 unit apartment system that will have complete ROI in year one, whereas a smaller 10 unit building may take 4 to 5 years.  And, if you happen to have one of those older 20th Century SHW systems at or near its end of life, the program allows for major refurbishment at the same rebate, resulting in a one year full payback!

But in order to reap these benefits, the first step is to find a competent solar thermal contractor. Nine out of ten Internet search results will yield solar electric contractors who know little to nothing about solar thermal…but they may be hungry for business, so beware!

The CSI Thermal website (www.csithermal.com) has a map showing all the rebated projects in your area and the company that installed each.  Those companies may be looked up on the CA State License Board website ( www.cslb.ca.gov) to ascertain their experience, specialty and whether there are any active complaints against them.

You should look for a company with a C46 license (solar) with at least 15 years of experience, not just a C10 (electrical), C36 (plumbing), C39 (roofing), or B (general). Keep in mind, however, that the C46 (solar) license encompasses both thermal and electric solar disciplines, and most are masters of one or the other…not usually both. Therefore, when hiring a company to install your SHW system, ask for a list of at least ten Thermal multi-family installation references and contact at least three! Additional Tip: the six digit CA State License number is sequential from date of licensing, so the lower the number the longer the experience.

SHW systems are very common throughout the world wherever conventional fuels are expensive, scarce, or discouraged (e.g. Hawaii, Australia, Japan, Israel, Germany, etc.).  In the U.S. our government has given fossil fuels tremendous tax incentives for over 100 years and continues to do so.  But finally the recognition of the importance of solar energy is resulting in terrific incentives as well.

This opportunity should not be missed by owners of apartment buildings and businesses which use hot water.  However, as with most rebate programs, the proportion paid out towards installations will decrease as chunks of funding are used up.  This CSI Thermal program is still in its first of four phases, so it’s important to reserve your rebate it while you still can!  Apartment and business owners who don’t will continue being a “renter” themselves, renting natural gas monthly with nothing to show for it except a bigger bill next month.

Ted Bavin is the owner and CEO of All Valley Solar, Inc., and is the author of the soon to be published book, “What to Know Before You Buy Solar: 10 Tips for Maximizing Your Investment”.  He has been designing and installing solar hot water systems for 36 years and is the authority on advanced drainback technologies.  Ted’s company serves all of Los Angeles, Ventura, Orange County, and much of the Inland Empire.  For questions or more information feel free to contact info@allvalleysolar.com or 800-400-7780.

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Don’t Leave ‘Em with Two Nickels to Rub Together – By Jon Coupal

Posted on 01. Sep, 2013 by .

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In a bunker somewhere in Sacramento, a secret committee meeting of state power brokers is taking place. Let’s listen in as the chairman addresses the members:

“Welcome to this week’s meeting of the ‘Don’t Leave Them With […]

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IRS on Warpath Against Real Estate Investors – By Philip Panitz, Tax Attorney

Posted on 01. Sep, 2013 by .

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The IRS is on the warpath against real estate investors.  Perfect.  You’ve taken money out of the failing stock market, or prudently decided to put it in real estate before the stock market even sniffed apocalypse.  You have your rental properties in […]

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Across the Board Rent Increases Keep Rental Housing in the Spotlight – By Sarah Bridge

Posted on 01. Sep, 2013 by .

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According to the RealFacts, LLC’s most recent survey conducted in June, 2013 rents are up across the board in every market across the country.  Of the 41 markets published, rents were up in 39 of them and remained flat in […]

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50 “PROBABLY IMPOSSIBLE” Tenant Alerts – By Jeff Taylor, “Mr. Landlord”

Posted on 01. Sep, 2013 by .

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One of the most popular questions of the week at www.mrlandlord.com was “What tip offs do you all use to spot those “probably impossible” types before they get into your units?” Your own experiences must have given you quite a few tell tale tip offs that there will most likely be trouble and it is always easier to avoid these applicants than deal with […]

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Why Real Estate Mortgage Interest Rates Are Rising – By Rick Tobin

Posted on 01. Sep, 2013 by .

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Mortgage interest rates are rising in spite of a sluggishU.S.economy.

The 30-year fixed rate recently increased the most in one week since mid-April 1987.  Freddie Mac reported that the average national Fixed Rate Mortgage (FRM) reached […]

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