Mike's Blog

A Day in the Life of a Recycled Plastic Bottle....

Ever since the 80's when officials became increasingly aware of quickly filling landfills, recycling of plastic bottles has become as normal as throwing the trash out. In fact...nearly 80% of all households now have access to curbside or site recycling for plastics. But exactly what's it like for a day in the life of a recycled plastic bottle.

Step 1  Bottles are deposited in recycling bins

Step 2  Trucks carry the discarded bottles to a recycling center also known as a MRF(Materials Recovery Facility).

Step 3   Bottles are sorted by type(water, detergent, yogurt, soda, ketchup, etc)

Step 4  The bottles are then condensed into large 1000 pound bales that contain 7,000 to 8,000 bottles.

Step 5  Reclaimers then buy the bales by the truckload and have them shipped to their own manufacturing center

Step 6  At the manufacturing facility the bales are ripped apart with machinery and raked onto conveyor belts.

Step 7  The plastic is the shredded, washed, rinsed and dried

Step 8  The shredded plastic is then fed into an extruder which melts the plastic and forces the melted plastic into strands kind of like a big spaghetti maker.

Step 9  The strands are chopped into tiny pellets.

Step 10 The pellets are then sold to plastic product manufacturers. Depending on the product- the pellets are melted again, color added, etc.

That water bottle that you recycled is now a park bench, a deck board, a shoe, a lunch tray or even a T-shirt. There are literally thousands of uses for recycled plastic. And when the user of that product is done- the cycle can be started all over again....

According to TreeHugger.com- nearly 75% of Americans are now doing some sort of recycling. That's a pretty amazing number. Thanks to the efforts of environmental groups, local governments and opportunistic entrepreneurs... the recycling movement has gained a solid foothold in American households. Here are ten facts about recycling you probably didnt know...

Fact 1  An aluminum can that is recycled is melted down, re-manufactured and back on store shelves in about 60 days. There is no limit to the number of times a can be recycled. But an aluminum can that sits in a landfill will still be an aluminum can in 500 years.

Fact 2  The Sunday edition of the New York Times weighs about 4 lbs. With a Sunday circulation of 1,438,585, recycling a single run would save 75,000 trees.

Fact 3   Americans use 2,500,000 plastic bottles every hour! Most of them are thrown away!  70% of plastics in the US are made from natural gas.

Fact 4  The energy saved from recycling one glass bottle can run a 100-watt light bulb for four hours. It also causes 20% less air pollution and 50% less water pollution than when a new bottle is made from raw materials.

Fact 5  The average American discards 1200 pounds of organic garbage every year that could be composted. Here's a great website to teach you how you build a compost bin.

Fact 6   A single quart of motor oil, if disposed of improperly, can contaminate up to 2,000,000 gallons of fresh water. Motor oil never wears out, it just gets dirty. Oil can be recycled, re-refined and used again, reducing our reliance on foreign oil.

Fact 7   An estimated 80,000,000 Hershey's Kisses are wrapped each day, using enough aluminum foil to cover over 50 acres of space -- that's almost 40 football fields. Do you recycle your aluminum foil? You should...

Fact 8  Recycling in the U.S. is a $236 billion a year industry. More than 56,000 recycling and reuse enterprises employ 1.1 million workers nationwide.

Fact 9   The Fresh Kills Landfill on the New York City borough of Staten Island, was formerly the largest landfill in the world, at 2200 acres and was New York City's principal landfill in the second half of the 20th century. The landfill gas produced daily at Fresh Kills Landfill is enough fuel to heat 50,000 homes.

Fact 10  It takes half a barrel of crude oil to produce the rubber for just one truck tire. Check out how one tire company is now producing tires made of orange oil.   Producing one pound of recycled rubber versus one pound of new rubber requires only 29% of the energy.

I say YES...shrinkage can be a good thing. I was recently reading this article in Fast Company magazine about Flint, Michigan's plan to bulldoze neighborhoods and shrink the locality's footprint. The city is considering bulldozing several blighted and near-vacant neighborhoods...shrinking the city by as much as 40%. This will allow the city to better manage the services. This is akin to a business downsizing to make itself more profitable and better able to compete.

But there's another aspect the article fails to mention...and that's the possible impact on the natural areas surrounding the city. Bulldozing blocks and blocks of homes opens up natural space and creates more open areas for animals and people to enjoy.

Such an endeavor must be done systematically and with a long term plan in place. Just as the "Growth at any Cost" concept is obviously flawed- so is the concept of "Shrinkage without a Long-Term Plan".

I was going through some my backlog of RSS feeds this week and came across an interesting article from Chris Palmeri at The Hot Property.  This was the first time I've come across this issue and I'm wondering if anyone else has hear of this issue.

It appears that some buyers of REO properties are having some issue with cash buyers "beating" them out of a deal. My favorite line from the forum is my title..."All cash offer can go to hell".

I deal with several investors that are making all cash offers on REO's... Im now wondering if we're make enemies out there that I dont know about....

I was sitting around recently drinking a Maverick Merlot from The Organic Wine Works...and I got to thinking...what exactly is an organic wine. I mean seriously...all grapes are from the earth...shouldn't that be reason enough to consider it organic? Ummm...no.

Certified Organic vs. Certified Organic Grapes

So I did a bit of research and it turns out that in order to get the elusive USDA organic seal-a wine cannot have even a trace of sulfites. Well the problem is- those sulfites are added to increase shelf life. Without the sulfites- the shelf life is too short. So what a vintner to do? The USDA allows winemakers to use the term "Made with Certified Organic Grapes". Thus the winery and its farming practices still have to be certified organic and the wine needs to have less than 100ppm of sulfites...less than the normal 350ppm.

So why is organic important?

So why should it matter if a wine is made with organically grown grapes vs. the traditional conventionally grown grapes? The basic premise of organically grown grapes is that wine made from grapes that are pesticide free and chemical fertilizer free are better for the environment and better for the drinker.

Conventionally grown grapes are grown using farming practices that rely heavily on chemicals. Those chemicals harm the land, the workers, the air and eventually us. All the pesticides, herbicides and fertilizers throw off the natural balance of the land. This starts a never-ending cycle in which the land is stripped of its natural minerals and this must be replaced by more chemicals.

Organic farming is less reliant on chemicals...instead using natural alternatives to achieve a balance within the soil. Instead of chemicals- farmers rely on algae and manure. Instead of pesticides farmers rely on the mixing of plant types within the grape fields to introduce beneficial bugs to eliminate the "bad bugs". Instead of herbicides- weeds are allowed to grow and mowed periodically. It's alot more work...and the fruit yields are lower. But the practice is MUCH, MUCH better for the land.

But does it taste good?

So far so good. I've only tried a few...Maverick Merlot, Frey Vineyards Merlot, Stellar Organics Merlot....OK OK...so I'm a Merlot fan. But the ones I've tried are definitely on par with the better California wines I've tried. If the taste is the same and the price is comparable...why wouldn't we buy them. Bottoms up....

"Green"...you cant go anywhere without hearing the term these days....and with good reason. But is being green or eco-friendly really something that we as investors should really care about? Afterall- green usually means expensive also. But the combination of green and rentals could be a winner for investors. Here's a few things investors should consider when making the move to green rental properties...

Long term...it just makes sense 

As investors we are inherently price conscious when it comes to buying property. But most investors are buying rental properties for long term cash flow and financial security. So it makes sense to make decisions based on long term profitability.

A property with its own renewable energy source such as individual wind turbines or solar panels will save the property owner and tenants in energy bills. As time goes on and the systems upfront installation cost are recaptured- the systems actually add to profitability. Other energy saving aspects have the same impact. Overall- properties with extensive green features tend be of higher quality and therefore require less ongoing maintenance.

High demand...low supply

As green goes more and more mainstream...people are more likely to search for rental properties that enable them to lower their personal environmental impact. For those of us with green rentals this trend is exciting. The number of people seeking green properties is increasing at a much faster rate than the number of actual green rentals. In today's market- rental rates have been squeezed. But a property advertised with energy conserving features will be able to sustain higher rental rates. Higher rental rates means better profitability and better quality tenants.

Green properties are more energy efficient and have a higher indoor air quality than their non-green competition. Thus tenants tend to stay longer in these properties- reducing tenant turnover. Keeping good tenants in your rentals longer is key to increasing the long term profitability of a rental.

Tax Credits

The Emergency Economic Stabilization Act of 2008 gives tax incentives to property owners of income producing properties who upgrade to renewable energy sources. Property owners can deduct as much as 30% of the installation cost of the upgrade. 

Check with your accountant- smaller investments in energy saving features can also be deducted. Just make sure you check first with your accountant to see what exactly can be deducted.

I was recently giving a talk to a group of real estate investors about green real estate. I was discussing our latest renovation in the Church Hill neighborhood of Richmond, Va. Of course investors are always concerned about the cost of renovations and asked if it would really be feasible to offer green features in a lower price starter home. My response was immediately...YES. So below are 10 low cost renovation tips that you can do on even the lowest priced renovations...

1. Route your AC condensation line for irrigation. We always route the condensation line to a flower bed...preferably one that gets lots of sunlight. Drill small holes in one piece of PVC to add drip irrigation to the bed. The great thing here is- the summer time is when you use your AC the most and its the time your plants need the most irrigation. Cost: $6 for the additional PVC line.

2. Outlet and switch insulating gaskets. One of the greatest sources of air leaks in a home is around your outlets and switches. For a quick and easy solution- pick up some insulating gaskets from Home Depot for just $1.37 for a pack of 8.

3. Solar Powered attic fan. During the summer, super hot air is trapped in attic spaces. Attic fans create an air-flow through the attic to remove excessive heat and moisture. Solar powered fans run on their own power and require no wiring. Cost: $217.

4. Motion Sensing Light Switches. How many time have you come home from the office only to find a light on in the bathroom. That light uses electricity and creates heat. Motion sensing light switches eliminate this problem. The switches can be set for auto or manual. We use these in high traffic areas prone to lights being left on(bedrooms, closets, bathrooms, etc). Cost: $14.95 each

5. Rain Barrels. We add two connected rain barrels to every renovation. Its a great conversation piece and marketing play. Cost: $60 a piece fully outfitted on Craigslist.

6. No-Voc Paint. When you're buying paint- how much are you spending per gallon? $15? $20? If you're buying even mid-level Behr paint from Home Depot you're paying $24 per gallon. For just a few bucks more you can get Sherwin-Williams Harmony No-Voc paint. Not only is the paint zero Voc's...the packaging is 100% recycled. Price: $27.50 per gallon at Sherwin-Williams

7. Installing the HVAC in conditioned space.  In many lower cost rehabs, the air handler unit of a new HVAC system is installed in either the attic, garage or crawlspace. We always try- its not always feasible- to place the entire air handler and ductwork within the conditioned space where there is less heat gain and heat loss. This is not always feasible as it affects the design on the home...but the energy savings can be substantial. Cost: $0 .Usually this doesn't cost any more than a typical install.

8. Programmable Thermostat. Programmable thermostats automatically adjusts to reduces heating and cooling in your home when you don’t need as much. Depending on your family’s schedule, you can see significant savings by sticking with those settings or adjust them as appropriate for your family. Cost: $30-75

9.Recycled Paper Cellulose Insulation. Home Depot offers GreenFiber cellulose insulation for about $.40 a sq ft...significantly less expensive than the traditional "pink stuff". Cost: $10/ bag.

10. CFLs. Long the staple of the green movement- CFLs are now becoming less expensive. Making this switch is one of the most noticeable inexpensive green tips. Cost: $1 each sometimes less if you find a good sale.

These are just a few of the green attributes of our homes...we also include more expensive features such as tankless water heaters, hybrid HVAC systems, Paperstone countertops, dual-flush toilets, steam showers, low-flow faucets, FSC certified cabinets, radiant barriers and more. We're exploring options now for green roofs, greywater recycling systems, solar/wind systems, etc.

The Japanese tire maker Yokohama has begun marketing its db Super E-spec orange oil infused tires. The tires are a secret blend of 80% orange oil extracted from orange rinds and 20% traditional petroleum based rubber. The tire drastically reduces the use of petroleum but according to the company "doesn't compromise performance".

But the question remains...do they work. Tests show that not only do they cut petroleum use but they also help consumers improve mileage. The new flexible rubber blend decrease rolling resistance by 20% thereby improving gas mileage by as much as 4%.

The tires will be available in four sizes initially... not surprisingly all sizes to fit the Toyota Prius, Honda Civic Hybrid, Toyota Camry Hybrid and Honda Accord Hybrid.

The company has certainly made incredible gains in making the tire manufacturing process more sustainable- Id love to see the company's plans for the entire lifecycle of the tire. How will they be disposed? Can used tires be recycled into new tires? Are the materials toxic? How environmentally friendly is the manufacturing process?

The biggest problem I have with rain barrels is I can only use them in my back yard. My wife would NEVER allow me to put my rain barrels where someone could see them. Of course my Home Owners Association may have a little issue with it as well. Home Depot is helping to alleviate the "Ugly" problem.

Check out the Waterstone           the Kyoto                               or the Mayne Madison