Cost of a Quality System

[NE WOOD BURNER]

So I have been reviewing all my research into a wood gasification boiler and storage.
One thing that keeps revealing itself to me is that very few companies offer financing and specials and deals are not great enough to entice the use of available cash.
If one was building a new house this cost could be wrapped into mortgage.
What are people doing for financing these systems?

 

[cityboy172]

Debt is dumb, cash is king.

 

[maple1]

Credit line here.

 

[Mike Fromme]

I did it in stages. Boiler first year, storage the second. Ebay and cl for deals on components and even a class a chimney. Three years later it has paid for itself in oil savings.

 

[harttj]

Debt is dumb, cash is king.

I couldn't agree more.

Even with a new house would you want to pay for it over 20 or 30 years?

 

[STIHLY DAN]

Talked to a guy today at the junk yard. He had put in a vega indoor boiler with storage. Said it cost him $35,000 start to finish. And he loves it. I know that's only a 10 yr payoff, but man for the love of god.

 

[NE WOOD BURNER]

Talked to a guy today at the junk yard. He had put in a vega indoor boiler with storage. Said it cost him $35,000 start to finish. And he loves it. I know that's only a 10 yr payoff, but man for the love of god.

You see my point that's a lot of cash to layout. that's a bit on high side though!

 

[STIHLY DAN]

You see my point that's a lot of cash to layout. that's a bit on high side though!

That's what I thought, But who would exaggerate on the high side about burning wood. That like saying, check out my wood stack, it only cost $500 a cord. which equals, not impressed.

 

[NE WOOD BURNER]

I see your running a Kuuma.

How has your experience been with it. Sounds like a great FHA unit from what I have been reading.

 

[JP11]

Don't be in a hurry. Get split wood first.

Then start looking for cheap storage tanks.

Small money to get them welded and set up for storage.

Keep splitting wood while the checkbook recovers. Start buying some pumps and such.

Then.. buy the boiler at the end.

Oh.. and split some more wood while you recover from each expenditure. DRY wood will make the most difference.

JP

 

[NE WOOD BURNER]

Great advice JP11!
I am in that position now.
At this point I will need to reline my chimney and hook up old grandpa to be ready for the heating season.
I was mainly surprised at how the OWB industry supplies a financing avenue and the indoor to storage being a better alternative would lend itself better to a financing institution. as the life expectancy of the indoor would far exceed the financing term.

 

[STIHLY DAN]

I see your running a Kuuma.

How has your experience been with it. Sounds like a great FHA unit from what I have been reading.

Love it. Damn good investment.

 

[JP11]

Well.. I guess I'd say that the OWBs are similar to the timeshare market. SURE.. they will sign you right up, right now.. In house financing ready to go.

It's almost all 'pump and dump' with that crowd. Oh, absolutely you can burn green wood, it loves it. Throw in your trash and tires too! The sales pitches want to make me puke.

There's no getting around the laws of physics. They apply universally.

JP

 

[NE WOOD BURNER]

JP11:
No argument in my mind what I want will work well. Was not saying that OWB is the way to go, but the OWB industry seems to understand that its a large investment and have many suggestions for financing their products. I think that is good business for them.
I can build a IWB with storage for less, I was just surprised that dealers/importers aren't offering financing for these proven systems. I have discussed with many dealers from this site and feel confident that any system I chose will work well. The companies offering economy tanks is helpful to acquire a complete system. In my mind the sales would increase if the dealers had in house or source for financing. Much easier to break the ice if I where to call XYZ finance and tell them that mr.jones from ABC boiler company gave me your contact information. then they would respond:that would be a great money saver! Mr. Jones has spent much time explaining his products and our institution has financed several of these systems that are still in operation after the loan is paid off.
Buying a vehicle I investigate my own financing and usually use the interest rate as a negotiating tool after I make my purchase offer. works well for me.

Was not in anyway trying to turn this into IWB verses OWB physics argument.

Thank you, for your reply.
At some point in a design "analysis paralysis" sets in.

 

[flyingcow]

I agree with you NE.

The few gasser boilers I;ve seen here are strictly importers. Where as the OWB's are build it,sell it, all as one business. Maybe that extra capital allows them either to set up there own finance co, or attract vendors to do the financing? It was a smart move to offer that. Plus add high finance rates, and/or pad the cost of the OWB's, and it adds a few points to the profit margin.

Just my thoughts.

 

[flyingcow]

Credit line here.

If you got a home equity line, it's cheap money.

 

[nctacoma]

If one was building a new house this cost could be wrapped into mortgage.

I would say that if you were building a new house that I would put the money into proper air-sealing and lots of insulation and then heat the place with an air to air heat exchanger and a heat pump and be miles ahead in terms of mechanical systems and effort of splitting and stacking wood. For a retrofit in an existing house, I would say it is a different story. I am looking at a 10 year pay-off on my system as long as I value my time and effort cutting and splitting at $0(good exercise is how I look at it)

 

[NE WOOD BURNER]

If you got a home equity line, it's cheap money.

The interesting thing here is that a wood boiler adds no value to the home. so the lenders would rather loan on a kitchen upgrade which increases the value.
Not that it would be impossible.

 

[Ashful]

Talked to a guy today at the junk yard. He had put in a vega indoor boiler with storage. Said it cost him $35,000 start to finish. And he loves it. I know that's only a 10 yr payoff, but man for the love of god.

A ten year amortization rarely makes sense, between maintenance and replacement cycles. If you can't pay it off in 3 - 5 years, you're better off spending your money elsewhere. Heck, even conservatively invested, his $35k would have become over $100k in ten years... and that's if he chose his funds poorly.

The best advice I ever received: "Only work once for your money, then make it work for you." Then your only remaining work is finding ways to avoid giving it all to Uncle Sam.

 

[maple1]

If you got a home equity line, it's cheap money.

Yes indeed.

We got kind of lucky here.

We have two CLs. The first we got some 20 yrs ago. It was done when our existing bank was being an ass and offering no help or talk on paying off our student loans. Went to another where I sort of knew the loan officer, and she was about to retire. Combined with getting us to switch banks, when we got the final papers we had a CL at prime - even though I was sure we agreed to prime +2. Right on. We have used that for most of our big purchases since, and they raise the limit on it once in a while, think it's around 40k now.

Then when a business thing came up, we got another one that is secured by the house. It is at prime +2, I think.

Credit line is a very good thing to have, as long as you're disciplined with money - same as having a credit card.

 

[flyingcow]

The interesting thing here is that a wood boiler adds no value to the home. so the lenders would rather loan on a kitchen upgrade which increases the value.
Not that it would be impossible.

True, but the way my home equity works, is that the bank doesn't care what we buy with it. That being said, we've used it very little. Which kinda bugs the bank a bit.

Now with new construction loans? It wouldn't surprise me that banks don't put any value on wood boiler systems. I'm gonna assume that they'll want to see some traditional type of heating system in place to make them happy. Then you install your wood boiler as an add on.

 

[NE WOOD BURNER]

Now with new construction loans? It wouldn't surprise me that banks don't put any value on wood boiler systems. I'm gonna assume that they'll want to see some traditional type of heating system in place to make them happy. Then you install your wood boiler as an add on.

You have hit the nail on the head!
Construction loans are picky these days.
For this house I am trying to keep ROI costs to a minimum. Defiantly for my retirement home I will have a whole different layout designed around my system.
I have not posed the question of pellet system in regards to meeting construction loan requirements. could work.
A wood boiler with capability of retrofit to pellets may get by that also.

 

[maple1]

True, but the way my home equity works, is that the bank doesn't care what we buy with it. That being said, we've used it very little. Which kind of bugs the bank a bit.

Guess I can't say that. I use it regularly. Annual insurance & tax bills. Boiler project. New roof the year before that. New car in 2006. Lease buyout of another vehicle in 2011. Daughters summer college course. I could unfortunately go on and on...

 

[Fred61]

I've had a variable rate home equity line of credit for years now. In the last few years of low interest rates percentage rate has remained at 2.5 percent. Pretty handy to have as it just shows up as another account on the web page and allows me the ability to move money from it to my checking account or vice versa. I've maxed it out several times as it becomes paid down and have invested the money in federally tax free munis that have averaged 5.4 to 5.9 percent over time. So far it hasn't been a dangerous as it sounds. Just need to be prepared to pay it off in relatively short order when interest rates start to rise.

 

[pbvermont]

I've had a variable rate home equity line of credit for years now. In the last few years of low interest rates percentage rate has remained at 2.5 percent. Pretty handy to have as it just shows up as another account on the web page and allows me the ability to move money from it to my checking account or vice versa. I've maxed it out several times as it becomes paid down and have invested the money in federally tax free munis that have averaged 5.4 to 5.9 percent over time. So far it hasn't been a dangerous as it sounds. Just need to be prepared to pay it off in relatively short order when interest rates start to rise.

So I have been reviewing all my research into a wood gasification boiler and storage.
One thing that keeps revealing itself to me is that very few companies offer financing and specials and deals are not great enough to entice the use of available cash.
If one was building a new house this cost could be wrapped into mortgage.
What are people doing for financing these systems?