Eric Brunner is a CPA based in Milwaukee. On today's show we are talking about which types of improvements must be capitalized versus expensed. Many accountants get this wrong and create tax liability for their clients by mistake.

To connect with Eric, visit him on LinkedIn

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**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)
Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)

Mitchell Rice is based in Salt Lake City, Utah. He is the founder of ElkStone Capital Partners.

He got his start in the investment management group at The Church of Jesus Christ of Latter Day Saints working on large commercial projects in multiple asset classes. After a few years he launched his own investment management business.

On today's show we are talking about converting functionally obsolete hotels into workforce housing and how this is expanding the supply of affordable product in the market.

To connect with Mitch, or to learn more visit

https://www.elkstonecapitalpartners.com/

------------

**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)
Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)

China is manufacturing solar panels at a scale that has transformed the economics of the global market. High-efficiency panels leaving China are currently priced at roughly eleven cents per watt. Some domestic Chinese prices are even lower.

That sounds extraordinarily cheap. But the panel is only one component of a solar installation.

The proper analysis begins with the building’s hourly electrical load, not its annual utility bill.

Two buildings can consume the same amount of electricity annually and have very different solar economics. A warehouse operating primarily during daylight hours may consume solar power as it is generated. An apartment building may experience its highest common-area loads during the evening, after solar production has declined.

Electricity consumed directly inside the building is usually more valuable than electricity exported to the grid. Export compensation can be materially lower than the retail price, depending on the utility tariff.

So, is a ten-year break-even compelling?

Usually, not by itself.

A ten-year payback represents an approximate unlevered return of ten percent before degradation, maintenance, equipment replacement and execution risk. It may still make sense for an owner with a long holding period, a newly replaced roof, strong tax benefits and confidence that the building will remain occupied.

A five-year break-even is different. That implies roughly a twenty-percent simple return before considering residual value. For a durable system producing predictable savings, that can be highly attractive.

------------

**Real Estate Espresso Podcast:**
Spotify: [The Real Estate Espresso Podcast](https://open.spotify.com/show/3GvtwRmTq4r3es8cbw8jW0?si=c75ea506a6694ef1)
iTunes: [The Real Estate Espresso Podcast](https://podcasts.apple.com/ca/podcast/the-real-estate-espresso-podcast/id1340482613)
Website: [www.victorjm.com](http://www.victorjm.com)
LinkedIn: [Victor Menasce](http://www.linkedin.com/in/vmenasce)
YouTube: [The Real Estate Espresso Podcast](http://www.youtube.com/@victorjmenasce6734)
Facebook: [www.facebook.com/realestateespresso](http://www.facebook.com/realestateespresso)
Email: [podcast@victorjm.com](mailto:podcast@victorjm.com)
**Y Street Capital:**
Website: [www.ystreetcapital.com](http://www.ystreetcapital.com)
Facebook: [www.facebook.com/YStreetCapital](https://www.facebook.com/YStreetCapital)
Instagram: [@ystreetcapital](http://www.instagram.com/ystreetcapital)