ANNOUNCER: Welcome to Creating Wealth with Jason Hartman! During this program Jason is going to tell you some really exciting things that you probably haven’t thought of before, and a new slant on investing: fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine, self-made multi-millionaire who not only talks the talk, but walks the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom. You really can do it! And now, here’s your host, Jason Hartman, with the complete solution for real estate investors.
JASON HARTMAN: Welcome to the Creating Wealth Show. This is your host, Jason Hartman, and this is episode number three hundred and forty-three, and it’s great to have you back, thanks for joining me. Today we will have Tom Kraeutler on the show, and you may have heard that name. He’s a rather famous guy. He’s co-host of The Money Pit, and that’s the nation’s largest nationally syndicated home improvement radio program. And he’s a home improvement expert. Also president of Money Pit Media, and to those of you who don’t self manage your properties—to those of you who have property managers—this interview may not be super valuable or hard-hitting to you. But if you’re self managing, I think it will. And it’s just kind of interesting to have another celebrity on the show like him.

We’ve had so many in the past, and we’re looking to get a lot more. And we are still working on both Ron Paul and Rand Paul, and I think we’re going to get one of them by January. That’s our goal, at least. But we’ve got some fantastic shows coming up, and boy! A lot of stuff in the news, huh? Janet Yellen, Federal Reserve, replacing Ben Bernanke, huh? That could be interesting. The watchers and the economists seem to like her a lot. They say she cares a lot, a lot, a lot about jobs, but she also cares a lot about inflation, or keeping inflation under control, I should say. And those two things, in a messed up, inverted reality world in which we live, are counter-cyclical. Those are opposite things. You can’t have them both ways. It’s kind of like saying, well, you want real cheap products at Wal-Mart and Costco and Sam’s Club and everywhere else, but at the same time you want to have a lot of high union paying jobs in America. Those two don’t go together either, right? Anyway, we shall see what will happen.

But the good news is, rates are down. With good credit, you can borrow at very good rates. And this is for investors. Investors pay a bit of a premium, but it’s still such a good deal, because I say the rates are lower than real inflation. And by the time you put in all the other multi-dimensional aspects that make income property such a wonderful investment—in fact, the best investment in America, that’s what I say, the best investment in America bar none—the only thing that could beat well planned, well executed income property investments is starting a business. And starting a business could be great. Much more complex, much more complicated, much more management-intensive, obviously. But with what we talked about in these new, very innovative internet-oriented business models on the last show—before we got to our guest for the last show, Clem Chambers—it’s so interesting.

In business nowadays, if you’re in one of these types of businesses—but it all starts with having a really great disruptive idea. And God knows I haven’t thought of that yet, and I don’t know if you have. But if you’re in one of those, the cost of failure is pretty low, so I think that is leading to, and will continue to lead to in the future, a lot more entrepreneurship, which will be good for the economy. And I tell you, I’ve gotta get this person on the show, but Chris Anderson, who is the author of three great books that I’m aware of—he may have authored more books than that—but three that I know of, his latest one being entitled Makers, and it’s all about the new American Industrial Revolution, largely all about 3D printing.

And it’s 3D printing in consumer products and things, but also in biotechnology, and I guess with me saying that, it’s a good time to announce a new show that I’m launching. Yes, as if, Jason, you didn’t have enough to do already [LAUGHTER]. I know, I can hear it now. A new show. Well, yes. I am launching a new show, I’ve been wanting to do this one for a while, and a lot of these things are more hobbies than they are businesses. But I just kind of like this philosophy of, anything—at least for me this works. I can’t say it works for everybody. But anything I want to learn, I teach. And so, and I’m not really teaching it, because I haven’t learned it yet, for this one. But the new show, you can see it on iTunes soon, and you’ll find it on the Internet soon. It hasn’t launched yet. But it’s called the Longevity Show.

And it’s a subject—maybe I’m just aging, I don’t know, that could be it. But I’ve also been very interested in this subject from an economic perspective, and as you know, I’ve talked about it on the shows before. Because you know, the biggest challenge we’re going to have—it’s a challenge but it’s a good challenge, it’s a good problem to have—is that we’re likely to have too much life left at the end of the money. And this has far reaching impacts on the United States’ economy, on the housing market, on the global economy, on the state entitlements and unfunded mandates, and on so many things. I mean, it’s really just probably one of the most far-reaching issues humanity faces. And with that, I did the first interview today with the founder—and again, you can’t listen to these yet, because the show is not launched. But with the founder—or not the founder, but the president—of cryonics. The Cryonics Institute. And yes, cryonics is taken from the word cryogenics, where they freeze people in the hopes that some day they will have the technology to wake them back up.

Yes, this is not totally science fiction anymore. I know I’m almost laughing as I’m saying it to you. But it’s really interesting, and you can listen to that show when it’s published. And the others. But I think this whole longevity thing is really, really just huge. It’s going to have huge impacts on the commodities markets—housing is a commodity, and all the ingredients that go into these houses and apartment buildings that we own and want to buy more of are commodities. And so, as more—if more people are alive on the earth at the same time, there will be more and more demand for the three major commodities required in every human life. And what are they? Food—we’ll include water in that one—food, clothing, and shelter. Yes, shelter. Let them rent that shelter from you.

So, huge wide ranging impacts. But back to Janet Yellen. So, why you can’t have it both ways. Well, it’s because of the Phillips curve. And if the Fed stimulates the economy, as Alan Greenspan did so much—and you know, I’ve said it before, but I’ll just say it again, now that it’s further back in history. But, this last economic crisis—the one that I say we’re still in—this is a phony recovery, in my opinion. And if you’re a member and you listen to that interview with Harry Dent, you’ll agree. And we’ll eventually release that one to the general audience, but members, you can find that.

And also the interview I just did with Gerald Celente, the trends researcher, very interesting as well. That should be up in the members section, I believe now. And it’s the Phillips curve! Okay? You can’t have it both ways! Either you stimulate, stimulate, stimulate—you have a Keynesian, John Maynard Keynes, Keynesian monetary policy where you pump, you prime the pump, you pump more of this money into the economy, you make it easier for banks to lend, you get that fractional reserve lending machine going at a higher speed. Well, what does that do? It’s inflationary, it causes inflationary pressures, obviously. And that will create jobs! But hey, that’s good, that you have jobs, but eventually, you know, it always follows, there’s always a lag time to this, right?

So eventually you have inflation. And really, what it ends up doing is impoverishing those people, because, well, they have a job. And if you look at the typical American worker, they haven’t had a raise in real dollars in about three decades, depending on how you look at it. There’s always so many ways to slice and dice these numbers up, folks. Regionally, income straddle-wise, etcetera, etcetera. But, basically it’s about three decades that there hasn’t been a real raise in America. And that’s a raw deal, for sure. But if you know how to play that game, and that’s the stuff we talk about on this show—gaming the system, if you will—then heck, all of this stuff works for you.

It all benefits you. In fact, it benefits you extremely, extremely well. But again, rates have come down about four and three quarters percent for investors, if you have good credit. Pretty darn good. Of course subject to qualifying. So take advantage of it! And also take advantage of this little window in time that we have now. I was in the traditional real estate for many years; I started my career at Century 21 at the ripe old age of 19 years old. I was in college selling real estate at the time. I was selling HUD and VA repos mostly in the inland empire of Southern California—Riverside and San Bernardino Counties—and these were crummy dumpy houses, I’ve talked about it before. I would sell them to investors, and some of them to homebuyers, and then I kind of went the traditional route in real estate for many years, and I worked for RE/MAX for 12 years, and listed properties and sold homes to people and all that kind of stuff.

And I’ll tell you what I always noticed. I always noticed the seasonal nature of the traditional real estate market. And now, it’s mid-October, and we’re certainly into the fall. And the traditional real estate market for owner occupied housing—it slows down this time of year. Now there’s a few buyers that are jumping in because they want to still get some year-end tax benefits and so forth. But by and large, the general housing market for owner occupants is busiest in the spring and early summer, and slow this time of year. So it’s a good window. We’ve got a window where rates are lower now; we’ve got a window where inventory is slightly better. It’s not great, but it’s slightly better.

And investors—you should be buying a lot of stuff right now, because you’re not competing with so many traditional homebuyers. And also we’ve noticed—and this is just an anecdotal observation, it’s not official, but you know, we have a few of them as clients—private equity funds and hedge funds—and the institutional investors like this, they seem, like I predicted a couple years ago—a couple three years ago, actually—it seems like they’re kind of calming down a little bit now on their acquisition strategies as well, and I’ll bet you the reason for that is that they’re becoming burdened by the fragmentation. The fragmentation that I always say my famous quote is, embrace the fragmentation. Well, that fragmentation benefits us, because as small investors who want to buy 5, 10, 20, 30 houses, or maybe a couple of small apartment buildings or small apartment complexes—you know, we can deal with that fragmentation.

But the big institutional investors—they go crazy with this. Because what they’re used to doing, is they’re used to dealing with funds, and big, big markets that are highly liquid markets, and high liquidity creates high volatility, another reason you don’t want those places to invest as an investor yourself. But again, they don’t care; it’s not their money, right? And that’s always the thing. And so, these markets—they can deploy billions and billions of dollars really quickly and easily, and they’re not going to be bothered by property management, or maintenance issues, or things like that. So, again, that’s what keeps them out of our business, largely. And even though we’ve seen a lot of activity from these private equity groups, and from these hedge funds, and heck, we’ve enjoyed having them as clients. We’ve noticed that they’re not too picky when it comes to price. They just want to buy stuff and deploy capital quickly, that’s their primary motivation: to keep the wheels of their machine turning, and turning quickly.

But this is what preserves that opportunity for us, and it’s such a great opportunity. We’ve got, without question, the best investment in American history, is income property. Short of starting a business—that’s the only one that could, if you’re well funded, lucky, ambitious, really smart, and you’ve got a great idea, could be even better. But for the vast majority of us, heck. Just build a portfolio of some nice, simple income properties. And put time on your side, and wait, and wait, and that’s a good thing. And before we get to our guest today, I want to tell you—you know, I’ve talked many times about how I love being a renter. For the vast majority of my life, I’ve been a homeowner. And I love the mobility!

And I’ve now lived in my swanky penthouse that is an extremely good bargain here in the Phoenix area for two years, it’s coming up on two years here in just about a month. And the question I’m faced with is, should I renew my lease and stay, or heck, should I try something different, and move somewhere else? And I haven’t made that decision yet. But with the possibility of that decision looming over my head, I went into my storage unit here in my building, and I noticed that I have a whole bunch of physical products—yes, I know. We hardly ever sell any physical products in our educational products. The vast majority of them are sold digitally. But, I did make two versions into physical products, thinking that at events and so forth, property tours, I would bring them along, and people would want to just buy them because they’re tangible and physical.

But the reality was that I didn’t really want to bring them with me, I didn’t want to bother to ship them to the event in advance. So, what does this all mean to you? Well, it means I’m about to offer a fire sale deal, because I do not want to move these things. I have the Meet the Masters Home Study Course as a physical product, and don’t quote me on this exactly, but as I recall, it’s about 22 hours of audio content all on CD. 22 hours and 22 discs. This will look beautiful on your bookshelf. In fact, I’m looking at it on my bookshelf now, and it’s really cool. It will impress all your friends. And then it’s got a big, huge workbook that has all the PowerPoint slides from a combination of two Meet the Masters events that we put together into one product.

We’ve got best practices in property management; the market profile on Austin, Texas; the power of analysis, teaching you how to analyze properties and analyze deals; we’ve got my economic and monetary outlook—and these are from a couple years ago, but in our business, things don’t change very quickly, so, it’s not like this stuff becomes very outdated. Yes, the market changes a little bit, the numbers change a little bit, but all the concepts still apply. We’ve got an attorney that talks about entity structures and asset protection; we talk about legal services; we’ve got a talk on the Kansas City market; we’ve got a client panel entitled Overcoming Challenges: The Good, The Bad, And The Ugly; we talk about some commercial real estate financing; we talk about the three ‘c’s of credit, which are character, capacity, and capital; we talk about organizing your investment business; even loan modification.

Now that has changed pretty significantly, actually, so that one might be a little out of date. We’ve got my friend Cory that talks about investing mobile home parks and self-storage facilities; we’ve got Danny, who talks about credit scoring and improving your FICO score; Kathy, who talks about best practices in 1031 exchanges; Randy, who talks about mortgages and financial planning. I should say mortgage planning, because that’s actually a whole field in and of itself now. We’ve got a market profile on Dallas, Texas; we’ve got income property, inside your IRA, and IRA Roth conversion issues; all kinds of stuff.

Now, this is what is completely backwards, okay? I kind of caught myself there, because I want to say it’s bass ackwards. And you know what that means, when it’s not said in a funny way. But it’s totally backwards, because we sell, all day long, the Meet the Masters Home Study Course, which is the same exact content as the digital product—for $497. Well, because I don’t want to move these physical products, we’re going to sell these, just so I can get rid of them and not move them—for $247 each. Comes in a nice box, it’s a bunch of CDs, book, everything, and it’s 500 pages with all the PowerPoint slides and all the speakers on there. So, this is an incredible deal.

The digital product is not on sale [LAUGHTER] because oddly, and as backwards as it is, I don’t want to sell them any more than I want to sell this one. I want to sell these physical products, so if I decide to make a move, because there’s a swankier, newer high rise penthouse here in my area that I want to go check out. And if I decide to move, I just don’t want to move these. Because they’re fairly big. These will take several, several boxes to have the packers pack these and move them, and then I won’t be able to find them when someone wants to buy one, so I just want to sell them, and I want to sell them quick. So, $247 for a physical product. Shipping is free anywhere in the continental United States. All you gotta do is go to www.jasonhartman.com, and click on the physical product for the Meet the Masters Home Study Course, and $247, and let’s say we will do this until end of the month, until Halloween, we’ll make that deal. And if I have a couple left after that, I’ll just probably move them. So there you go. There’s your deal of the day.

I mean, you gotta—I never try to sell anything on my show, but I just don’t want to move these. And let me tell you one more thing. It costs—in actual costs, without the intellectual property content—the actual cost of producing this product was about $140 each. Without any of the audio editing, without any of the speakers, without the intellectual property and all the time that goes into that. Just to simply make the product and produce it. So, to make the CDs, and do the printing for all the printed materials that go with it. So there you go, incredible deal, www.jasonhartman.com you can check that out and take advantage, and get those out of my storage unit, because I just do not want to move them.

Anyway, let’s get to our guest today: Tom Kraeutler, who will talk a little bit about some of the physical stuff you do on your properties, and we also have our live Meet the Masters course coming up in Orange County, California—forgive me, I know a few of you have asked for a specific date—we don’t have one yet. I’m waiting for the darn Hyatt Regency to get back to me, because that’s where we’ve held it for so many years, but they’re juggling their other events, and seeing what’ll be the best weekend for us. So we’ll announce that. We plan to have that in January, at the very worst early February, but probably January. So, we will announce that date as soon as we have it, and you can of course register for that at www.jasonhartman.com as well. And let’s go to Tom, and talk about home improvement issues and the money pit!

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ANNOUNCER: Now you can get Jason’s Creating Wealth In Today’s Economy Home Study Course: all the knowledge and education revealed in a 9-hour day of the Creating Wealth boot camp, created in a home study course for you to dive into at your convenience. For more details, go to www.jasonhartman.com

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JASON HARTMAN: It’s my pleasure to welcome Tom Kraeutler to the show. He is president of Money Pit Media, and co-host of The Money Pit, the nation’s largest nationally syndicated home improvement radio program, and home improvement expert. Tom, welcome. How are you?

TOM KRAEUTLER: Thank you very much for having me! I’m great.

JASON HARTMAN: Well good, good. So you’re coming to us today from New York City, correct?

TOM KRAEUTLER: That’s correct, yes. I actually just returned from the 2013 National Hardware Show, which is an interesting trade show where manufacturers in the home improvement, hardware, and décor industry roll out all of the new products that we’ll be seeing on the store shelves in the coming months.

JASON HARTMAN: Fantastic! Well, yeah, let’s talk about some of those new products! You know, we’re in a rapidly improving housing market, and there are always, Tom, certain prudent, smart improvements that people can do to their properties to increase value and make them more rentable as well. Not just increase value, but you know, attract tenants to those properties too. What are some of these key improvements? And then let’s kind of drill down and talk about some of the exciting products—you know, we definitely want to talk about the areas of efficiency, energy, water, etcetera. But, smart improvements?

TOM KRAEUTLER: Well, I mean, curb appeal is really a good place to start. And it’s always been important to make sure that your property looks good from the outside. Now, the traditional way of buying real estate is when the realtor piles you in his or her car and drives you around street to street, and you could do these drive bys of homes and find one that was of interest to you. But curb appeal today has gone beyond the drive by to its more important role as setting the stage for great photographs taken from curbside, because most folks are surfing the Internet to find their homes today, and you want to make sure that in that thumbnail image that comes up on a prospective buyer’s screen, that your place looks good. So, a curb appeal is still key if you want to attract homebuyers.

JASON HARTMAN: Yeah, that’s the first place to start, yeah.

TOM KRAEUTLER: Yeah, first place to start. So, what that means—and I spent 20 years as a professional home inspector, so I know what folks are gonna be looking for. But what it means is basically, scrub the exterior—that means scrubbing the sidewalks, scrubbing the side if you can do that. You want to make sure that you get rid of any debris that’s in the side of the yard. And really, scrubbing the entire house getting rid of as much debris as possible is important, because you have to remember that a prospective homebuyer does not want to buy a house that’s as crowded as the one that they’re probably leaving. So, you want to make sure the house is as open as possible. So, making sure you de-clutter the home. Painting is a critical improvement, and that includes painting on the outside, make sure that your home has a fresh coat of paint, if it’s a home that’s paintable; at least the trim. And painting on the inside—and when it comes to painting on the inside, you wanna choose neutral colors. You don’t wanna choose anything that is too strong, because you wanna make sure that a prospective homebuyer can imagine their stuff in your house, so if it’s neutral, they can.

JASON HARTMAN: Right. And when you say homebuyer, I just want to mention that that’s probably completely interchangeable with the word prospective tenant as well, right?

TOM KRAEUTLER: Well, certainly. Yes, exactly. The tenant as well is going to want to have a neutral place to move into. So, I spotted a couple of products that are new that could help with some of those projects, which I’ll mention to you. One that I think is perfect for an investor, because when you buy a home, you invariably have to get rid of whatever junk was left behind. Dumpsters are expensive to rent; they can damage your driveway or your yard. There’s a product called the Bagster Dumpster in a Bag, that solves that. It’s actually a fold-up dumpster.

JASON HARTMAN: Those are really amazing products, by the way. I’ve seen some of them advertised from the waste management companies. Now, I don’t know which one you’re talking about, exactly, but pretty amazing stuff here. Go ahead.

TOM KRAEUTLER: Yeah, I actually think they’re all the same. I think there’s only one size, because if you open up to a 4 foot by 8 foot by 2½ foot tall, it’s about the size of the back of a big pickup truck. And if you’re into remodeling, and you’re buying and selling homes all the time, you can pick up, you know, 4 or 5 of these things to always have around, because what you do is, you pay for the Bagster on the initial purchase, which is $29.95, and then you fill it up—it takes up to 3,300 pounds, so that’s a lot of stuff. I mean, that’s full of the carpet, water heaters and bathtubs and kitchen cabinets and [unintelligible] and whatever junk you gotta get rid of, and then you call waste management, they come out, they pick it up with a truck, and they take it away. And it ends up being 70% less expensive than the cost of that dumpster rental, and a whole lot more convenient as well.

JASON HARTMAN: Sure, yeah. That’s great. Good! Well, other items? I mean, definitely let’s talk about efficiency, energy saving, water saving, any of those products.

TOM KRAEUTLER: Well, when it comes to the green aspects of the home—clean water, clean air—we’re seeing a lot of innovation in those spaces. For example, one of the other things that I used to have with me as a professional home inspector when I looked at properties that were being sold, was you would open up the blower compartment on the furnace to take a look at the blower, and that of course is where the filter goes, for the most part, and it would just be caked and caked with dirt and dust. You really need to change those filters, because your air inside can be even more polluted than the air outside the house. And there’s a new filter system out of 3M called the Odor Reduction Filters Filtrete™ product, and what’s interesting about this is I’ve never seen where you’ve been able to take a filter that pulls out not only pollen and dust, but also scrubs the home of odor. So if you, you know, cooked fish the night before, you’re not going to be smelling it for three days, and you know if you’re buying a home that’s been vacated, it will almost invariably have an odd odor to them, so that can help clean that up. And you can also clean your water with water filtration systems. You don’t just have to use the small inefficient water filtrations that fit on a faucet tap; there are large whole-house systems now, and the prices have come way down on them. Filtrete™ has one that’s a whole house quick change system that you install at the main. It’s under $100 and it filters all the water in the house, so, water you drink with, wash clothes with, and so on.

JASON HARTMAN: That’s amazing! Under $100? Those prices have come way down!

TOM KRAEUTLER: Yeah, they certainly have, and actually, they’ve designed the products so that they’re easier to install. They’re certainly easier to maintain. You’ll still need a plumber to help you put this in, because you’re going to have to cut into your plumbing line. It’s not hard to do, you could do it yourself, but you may need a plumber to help you on the installation side. But then the filter change is very simple. You would simply turn off the main water valve, and you unscrew the old Filtrete™ filter. You screw in a new one, and they last for 12 months. And importantly, they have an indicator that tells you when the filter needs to be changed. So yeah, prices have come way down, efficiencies have been improve, and it gives you the ability to enjoy a water that tastes good and is better for your clothes and washing and so on.

JASON HARTMAN: Yeah, fantastic. So, water filtration. How about water conservation?

TOM KRAEUTLER: Yeah, you know, when it comes to water conservation, there actually have been some advances in that. And this includes products like hose nozzles. So for example, you know, when it comes time to hook up the hose, which so many of us are doing this time of year in the spring, and putting on the hose nozzle—they always leak! It doesn’t matter how many times you change the washers, they just seem to leak all the time. I saw one that’s brand new on the market; it’s called Little Big Shot Super Nozzle, and it’s a solid brass hose nozzle, it fits in the palm of your hand. It’s very small, maybe an inch and a half tall. And it’s made in the USA. And they’ve designed this from an efficiency perspective so that now it can deliver 40% more force than the average hose nozzle, but use 40% less water at the same time. And so, you can adjust this to shoot a 40 foot stream, or you could dial it back to a really fine spray for like, seedlings. And this product has an interesting back-story, because it’s made in the USA, and it’s assembled by disabled veterans.

JASON HARTMAN: And I assume the technology there is it’s somehow turning it into an air jet, right? And that’s where it gets so much force?

TOM KRAEUTLER: Yep, and that’s what’s happening with a lot of the efficiency and plumbing fixtures. So, the faucets in the showerheads, for example—they’re figuring out how to use air strategically in those streams, so that they’re aggressive, and they wake you up in the morning, or they clean the driveway, or whatever the purpose is, but they lose less water at the same time.

JASON HARTMAN: Yeah, you don’t feel like you’re getting short changed on your water pressure.

TOM KRAEUTLER: Right, exactly. And if you look at a product like a toilet, for example, completely redesigned the way that works. Because you still flush a valve and the water is let into the toilet and it washes the waste away, but the channel that that waste follows now is a wider channel, so you need less pressure to do the job, and it’s glazed on the inside, so there’s no friction. So you can find toilets now that will flush at a rate of like 1.28 gallons of water. So, very little water.

JASON HARTMAN: Versus the traditional, is 5 gallons, right?

TOM KRAEUTLER: Yeah, 3-5 gallons.

JASON HARTMAN: Right, yeah. Fantastic. And, so for investors, this can save them a lot of money. If an investor is paying utility bills, which occasionally they are—mostly in single family homes the tenant is paying that stuff. But a lot of apartment investors as well. I’m wondering, have you done any analysis on the payback period for this? I mean, say you own an apartment building or a fourplex where you’re the investor, you’re paying the utilities, and you’re just dumping that all into the lease. Or you’re paying maybe the water, and tenants pay their own electric, etcetera. What’s the payback timeframe on this? I mean, can you get your money back in two years, for the increased efficiency?

TOM KRAEUTLER: The ROI numbers look better and better and better as time goes on. So, for example, with the WaterSense certified fixtures and faucets, that’s the EPA’s program—it’s very similar to ENERGY STAR. But if you look for that WaterSense label and that WaterSense certification, that means it’s a water efficient product, you’re gonna use 30% less water with that, and the good news is that those fixtures and faucets don’t cost more than a traditional fixture or faucet. It’s becoming the norm. And that’s a key thing that’s happened, that green has become cool. Green has become the norm. you have to work pretty hard to find something that’s wasteful today, in terms of products. And then if you look at other things investors can do [unintelligible] if you want [unintelligible] pay heat in your building, there are some really interesting new Wi-Fi thermostats that are out today, where you can program the heat from a remote location. So, without standing in front of the thermostat, setting what you think it should be—you could have a Wi-Fi connection on your smart phone and set the heat wherever you want. So you could set ranges, and Wi-Fi thermostats today, like for example, there’s one called Nest that I’ve used. They have motion detectors, so if nobody’s in the house, you could set an away temperature that leaves the heat down when there’s no movement. So, now with the technology of thermostats today, you can really save a lot of money. A lot more than you could have, with a clock set back, because you can even drop the heat down when you’re away.

JASON HARTMAN: Yeah, yeah. Fantastic, good ideas there! It’s amazing what’s happened. We’re really moving into the era of the smart home, aren’t we?

TOM KRAEUTLER: We are, and if you go to a trade show or a consumer electronics show, which I’ve been to a number of times, we’ve saw over the last several years more and more folks that are working on developing smart home technologies, where you have common control systems and so on. I have not yet seen a leader emerge in that, so I’m not ready to jump onboard with one particular technology, because it usually means you’ve gotta do something to your windows, or do something to your door, or something to your outlets or whatever and make it work with the system. But individually there’s a lot of cool products that work better and better. I mean, just look at light bulbs. There’s a light bulb out now from Cree, that’s available at the Home Depot—it’s an LED light bulb, and when these first came out, I remember seeing them like $60, $70 a bulb.

JASON HARTMAN: Yeah, the prices are coming down nicely.

TOM KRAEUTLER: Yeah, well these are now under $10. For a light bulb. I think it was $13 for a 60 watt bulb, and these are 86% more efficient than fluorescents. And so not only are they more efficient, price has come way down, and you’re talking about buying a bulb that’s going to last you 20+ years. So if you think about it, your light switch on your lamp is going to probably wear out before the bulb that you put in the lamp.

JASON HARTMAN: That’s amazing. Wow. Totally amazing, yeah. LED is a great technology. It’s so much better than that compact fluorescents, which just have a whole array of problems with them, including toxic cleanup issues as well.

TOM KRAEUTLER: Yeah, that’s right. And this bulb, they put a coating on the outside of the bulb, so if you drop it, all the glass stays inside of it.

JASON HARTMAN: Yeah, fantastic. What about color? You mentioned painting in neutral colors and so forth, but what do you think about maybe one colored accent wall, or just any more thoughts on color and painting?

TOM KRAEUTLER: I think color is good when used strategically, and you take a little bit of risk if you’re an investor doing this. I know it’s boring, but, nothing beats white walls and beige carpets if you’re trying to sell a house or get somebody to move into it and rent it. But if you own a house, I think color accent walls are important. Color can be used strategically, and it really does improve the look of the place. And another product that I saw, that you reminded me of when you said color, at this past national hardware show, is a product called Renu by Leviton. Now, Leviton is famous for manufacturing lights and outlets and switches and things like that. Now, what Renu is, it’s a wiring device, and it can be a light or an outlet or a dimmer, that is available in 20 different colors. And here’s the way it works. You wire it in once. Then you have a color change kit which actually for under $5 can change it from white to blue to black to silver, and if you thought about it, if you had a room that you decorated for your newborn baby, and then that baby becomes a big boy or a big girl and you redecorate again, and then that baby moves out and goes to college, and that room now becomes a home office that you redecorate again. You can change the colors of the lights and the outlet switches as you go, without rewiring. That’s the key. In literally 15 seconds you can pop off the old colors and put on the new ones.

JASON HARTMAN: Wow, very interesting, very interesting. Talk to us a little bit about painting, and the high tech sort of painting that’s going on nowadays. There’s been real progress there! It’s not the same old thing as it used to be, huh?

TOM KRAEUTLER: Well, it’s not. This is another area where green has become the norm. It’s hard to find a paint that has [unintelligible], and so much of the paint has become more environmentally friendly. It’s also gotten easier—I always say that what always makes a good painter is good painter’s tape, because if you do a good job masking all of the places that you don’t want to paint, then your painting job comes out better. So even masking tape is smarter today. There’s a product by Scotch Glue that’s an exterior painter’s tape and has a new feature, and it’s called quick snap tear. If you’ve ever painted and tried to rip a piece of painter’s tape, it comes off at sort of this weird 45 degree or less angle. Well, this quick snap feature now enables you to get a 90 degree angle at the end of the tape every single time you tear it, so if you gotta get in tight to a corner or a window, for example, you can do that, and the tapes and designed now so that if you have to go around a curve—like a curved window, or curved floor trailing, something like that—they flex, and they bend, and you can leave them on now for up to a week without leaving a lot of gunk behind when you pull the thing off.

JASON HARTMAN: Yeah, that’s a fantastic tool. Painter’s tape makes the painter, huh? That’s a good way to put it. Well, what’s going on with the show? Give us a little insight into where the show’s at, and where it’s going, and tell us more?

TOM KRAEUTLER: Sure. Well, The Money Pit has grown steadily over the last several years. We’re currently on 330 radio stations around the country. And it’s fun, every weekend my co-host Leslie Segrete and I get to talk to folks from all across the country, and up into Canada, and we answer home improvement questions. We solve do-it-yourself dilemmas. We give advice to folks that are doing it themselves, as well as those directing it themselves—maybe not picking up that hammer, not using the saw, but hiring folks that do that sort of work, but want to know how to find that right professional. Or, if they are going to be building a deck, should they design it with one level or two? Or, what’s the difference between a standard roofing shingle and a dimensional roofing shingle? And you know, we serve as home improvement coaches, coaching them through those sorts of decisions, and helping them find the information that they need to make those important decisions.

JASON HARTMAN: Fantastic. And the website is www.moneypit.com. That’s www.moneypit.com.

TOM KRAEUTLER: That’s correct, www.moneypit.com, and you can listen to the show there; you can also subscribe to the podcast, and you can also call us 24/7. We have a live call screening any time of the day or night at 888-MONEY-PIT.

JASON HARTMAN: Fantastic. Well Tom, any closing advice or thoughts for people?

TOM KRAEUTLER: Well, I’ll tell you what. The economy’s gotten so much better, there’s a lot of optimism at the trade shows I’ve seen that are attended by building industry professionals, and so I think it’s going to be an exciting time to do remodeling work, to do home improvement and building work, and as there’s more and more information out there, it becomes more difficult sometimes to sort through all of the information. But I say always break it down, pick one project that you can do successfully, and build on it from there, and get it done. And if you need help any step of the way, we would love to be able to help you with that process, and you can reach us, again, at www.moneypit.com, or by calling us at 888-MONEY-PIT.

JASON HARTMAN: Excellent. Well Tom Kraeutler, thanks so much for joining us today.

TOM KRAEUTLER: Thank you, and have a great day.

[MUSIC]

ANNOUNCER: This show is produced by the Hartman Media Company. All rights reserved. For distribution or publication rights and media interviews, please visit www.HartmanMedia.com, or email [email protected] Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, or business professional for any individualized advice. Opinions of guests are their own, and the host is acting on behalf of Platinum Properties Investor Network, Inc. exclusively. (Image: Flickr | Concrete Forms)

Transcribed by David

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