What Happened To My $100,000 Remodel
What's up you guys, it's Graham here. So I know a lot of you guys have been asking for an update on the status of my now over $100,000 renovation. I guess it's about time I give everyone an update and discuss what's going on because it's been over a month since I've talked about what's happened.
For anyone who's new to the channel or has not been following the series, this is basically just like the real estate version of Tovarisch or Hoo's Garage. Except instead of dealing with high mileage exotic cars, I'm dealing with somewhat dilapidated properties here in Los Angeles. It was a bit like a Frankenstein mess with lots of 80s and 90s trim, horribly disgusting carpet, weird acoustic ceiling tiles, and a floor plan that makes you question what on earth was the developer smoking when he created it.
So when I got my hands on this, I went straight to work. Now admittedly, I went a bit overboard so I'm just gonna say that now to get that out of the way. And yes, I believe I have to talk a little bit quieter because the echoing here is really bad, and I'm not sure how the audio is gonna sound. So if I'm speaking a bit quieter in this video, that's why.
Anyway, most real estate investors out there would have just replaced the carpet, slapped some paint on the walls, replaced the acoustic ceiling tiles, and then repainted the kitchen cabinetry. So really, with about $30,000, you can get yourself a pretty clean unit. However, I knew that keeping a floor plan that required you to walk through the only bathroom in the entire unit to get to the master bedroom was just gonna present a roadblock when it came to renting out the unit.
So I made the very expensive decision to turn this from a kind of funky two-bedroom, one-bathroom into a proper two-bedroom, two-bathroom. See if this has a nice ring to it! But really, though, in order to do that, I had to tear out a lot of the walls. At first, the process went fairly smoothly. We began doing the demo, removing the walls, and tearing the place apart.
But once that process began, quite a few more problems were uncovered. And then pretty much once you're remodeling some of it, then you may as well just do all of it while you still can. That's where things started getting expensive. Originally, I had a budget in mind of about $80,000 to make this unit look pristine. But after seeing several windows needing to be replaced, the ceiling joists needing to be cut out, and the electrical needing to be upgraded, it began adding up to a sizable amount of money—just a little bit over a hundred and ten thousand dollars.
So this is an area of Los Angeles that does support this type of renovation. After all, when everything is said and done, I'm looking to get anywhere between $3,000 and maybe as high as $3,500 a month for it. But spending this much money is very expensive, not only because it costs you a lot of money, but also because it takes longer to do. And the longer it takes to do, the longer the unit is vacant, which means the less money you're going to be making.
So after patiently waiting for a lot of the work to finish up, here we are now, and I'm about to give you a tour. But first, I want to give a huge thank you to Simply Safe, who's helping me through this renovation by sponsoring today's video. For those who are not aware, Simply Safe is an easy-to-use customizable home security system that's free from any hidden costs or contracts and protects like a pro.
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Which right now, with everything going on, and not leaving the house, the setup process is also incredibly easy, and I did it entirely myself in under an hour. They've also just released the new Simply Safe lock, and since the majority of break-ins happen through an unlocked entry point, the Simply Safe lock is designed so that you can ensure that everything is secure, even if you forget. Plus, you'll get alerts anytime someone comes and goes, and you could set up unique access codes to know exactly who is there. Not to mention, you could lock or unlock your door and give access to anybody, anywhere in the world, entirely from your phone.
So if you're interested in checking this out and learning more, make sure to check out simplysafe.com/Graham to learn more and get one for yourself. And so with that said, let's begin the video.
So here we are in the living room. As you can see, we got the drywall all installed and sanded down, and then we've begun putting the recessed lighting in the ceiling. This entryway has also been opened up and expanded just a few feet in either direction. I understand it's somewhat unnecessary to spend the extra money doing this, but I just figured, you know, while everything else is getting done, you may as well just spend a little bit more, and it's gonna look that much nicer and help set it apart from everything else on the rental market.
I just believe that going above and beyond is really gonna set you apart in a very competitive rental market, and the right tenant to appreciate something like this is probably gonna spend a little bit more. Then we gracefully walk into the dining room. It used to look like this and then it used to look like this, and now it looks like this. The kitchen should hopefully be delivered this weekend, and then after that, it'll be installed. We also just got the floors in here; that should go in shortly as well.
So really, over the next few weeks, this place is gonna look entirely different. And then we have over here the hallway. Because this is the only place in the entire unit that doesn't really get any direct sunlight except what comes in from the front, I went ahead and added a little bit more recessed lighting just to brighten things up.
And now we're in the bathroom that's being built out, and this is right behind the kitchen. This is something I really wanted to do because I knew I would be able to get an extra few hundred dollars a month to be able to rent this as a proper two-bedroom, two-bathroom instead of as a two-bedroom, one-bathroom. So obviously, the shower is going to be going up against this back wall, the toilet is going to be right next to it over here, then we have the sink over here, and then opposite of that we can have some towel racks.
And maybe people can, like, put up a picture, or they could smash the like button for the YouTube algorithm if you've not done that already. Let me know if I got in there if that bathroom is gonna be used by the first bedroom here. I really didn't end up doing that much work to this room besides closing off a random doorway that led over here and then building out this closet against this side of the room.
Just so you could see it before, this is what it used to look like, and then it looks like this, and now it looks a bit like this. And then as we continue to walk down the hallway, you could finally see all the work that's been done to correct this really odd floor plan. Because instead of having this walk into a bathroom to then walk into the master bedroom, now it's an actual hallway.
See, before this was all demolished, the hallway led to a bathroom which then opened to a master bedroom. Come on, I mean, that's just the worst possible floor plan you could ever have. First of all, it was the only bathroom in the entire place. Second, if anyone used the only bathroom in the entire place, and you want to enter or exit your bedroom while you can't. And third, do you really want to go through a bathroom after someone just used it? It might not smell that nice.
So I decided to tear this out altogether, turn that bathroom into part of the hallway, and then be able to relocate the bathroom to behind the master bedroom. So here's what it looked like before, and then it looked like this, and now it kind of looks like this. So as you enter the master bedroom, the built-in closet fits pretty seamlessly right as you walk in, and then you walk into the main room with the bathroom situated right behind.
Here's what this looked like originally, and then it looked like this for a little bit, and now it looks like this. They're also in the process of setting up a sliding glass door to open up to the backyard, and this is something I felt was really important for a master bedroom. To me, it just made sense that the main bedroom should be leading out to something, and otherwise, it would just feel claustrophobic. Now, problem solved!
Oh, and then also it's kind of tight to film in here, but this is the master bedroom right now. The ceilings aren't as high as what I would have originally liked because this roof somewhat slopes down a little bit, but it makes do; it's plenty tall for me. Unless you're, like, you know, a basketball player or something like that, or unless you're like six foot five, it might be a little bit tight. But as long as you're under like six foot two, you're good.
In this bathroom, so over here along the backside of the wall, we're gonna have two sinks, and then on the opposite end, we're gonna be having a toilet, and then right here is going to be a glass shower. But right now, we should talk about and address the elephant in the room here, and that would be the illness going around and how that might affect things.
Right now, here in California, construction is considered an essential business, and work is progressing forward as usual. However, my contractor made it very clear that everyone working is to wear masks, continually wash their hands, and if anyone is even remotely sick, they go home immediately.
I do have some mixed feelings about this because on the one hand, I really want to support and give work to as many people as I can who really need it at this time, and work like this could be very valuable. However, it's also really important to stay safe and try to contain this illness as much as we can. So I'm kind of playing it day by day at this point. And if our situation in California gets worse, then I'm gonna re-evaluate whether or not the construction carries forward or if we just take a pause and resume things once everything is settled down.
I'm also going to be completely honest: I have no idea how this is going to impact the rental market or how difficult this is going to be to rent out. A month ago, rentals like this were near nonexistent, and anything that came on the market was snatched up within about a day or two, and now I basically have absolutely no clue what it's like out there.
I've talked to quite a few people who are holding off from doing anything right now even though they want to move, which is totally understandable. And with the shutdown, it's basically a given that nobody is gonna be out there shopping for apartments and houses. Not to mention, there's a lot of people right now who are out of work or have had their paychecks cut down significantly.
So I can't even predict what I think is gonna happen. Part of me worries that no one is gonna move; people just decide to stay where they are. Because of that, I might have to take less rent than what I was expecting. However, there's also the very real possibility that to the right person, this unit could be a way for them to cut down and save money. For example, some people might see this unit as a downsize instead of going and spending $4,500 a month for a comparable unit just a mile north.
As a real estate agent, I'm very familiar with my clients doing similar things as well. They're scaling back on rent to save money, and that might mean that instead of renting something for $8,000 a month, they rent something for $5,000 a month. This place, to the right person, could end up being way less expensive. That could, in theory, push this place into even further demand.
Short term, I don't know, but I do think one thing is for sure: there is probably going to be a high unemployment rate, people are gonna be making less money this year, and finances are probably going to be pretty tight. So it's really gonna be in the eye of the beholder to decide whether or not this unit is a good value compared to anything else out there.
Overall, I'm really curious how this is going to be affecting real estate values. I mean, we'll be able to look back at this video a few years from now and then see it's probably gonna be really obvious to us in the future. But I'm definitely keeping everything in mind and paying very close attention because it's not a good idea to keep this unit vacant for longer than it needs to be.
I'll finish this video off with a few lessons about real estate investing that I have learned in the past. The first one would be, generally speaking, do not rearrange the floor plan unless you really know what you're doing. Typically, it costs way too much money, it takes you way too long to do, and every single day the place is empty, you're losing money.
So I certainly took a very big risk by getting that done here, and I'm hoping that pays off given that this area has seen a recent big surge in demand. However, I would say for most people out there, doing this just usually doesn't make sense. If this wasn't Los Angeles, going and spending a hundred and ten thousand dollars on a renovation would have been the stupidest thing to do.
Second, I have warned myself against doing this in the past, and I keep doing it, as does everybody who ever invests in real estate. It's this: once you start renovating a property, it becomes way too easy just to want to do all of it. For example, if you're redoing the kitchen cabinetry, it becomes way too easy to then say, "Well now I may as well just redo the floors too." Then while you're redoing the floors, you may as well just paint the kitchen while you're at it.
And then if you repaint the kitchen, you may as well just repaint the entire place. And then while you're at it, you may as well just gut the place and start over from scratch. So as you can see, it's pretty much never-ending. I have to constantly stop myself from getting carried away from doing this too much because I am the type to get a lot of things done because I personally like it, and let's be real, that doesn't always bode well for getting the highest ROI.
So sometimes I like to think those little details go a long way, and if I make the place look a little bit nicer, it'll make me stand out in a sea of a whole bunch of other rentals. Although I have to say, depending on what you're doing, most people don't pay attention to that crap. Ninety percent of people have no idea, and it's just not going to get you any sort of substantial ROI, so please be very cautious about that.
Any time you have a renovation, all you got to do is come up with a plan, increase the budget of that plan by 25%, and then just stick with it. If you just do that, I promise you're gonna be coming out ahead.
Okay, so with that said, you guys, thank you so much for watching. I really appreciate it. As always, if you guys enjoy videos like this, make sure to destroy the like button, subscribe button, and notification bell. Also, feel free to add me on Instagram; I post you pretty much daily. So if you want to be a part of it there, feel free to add me there, as on my second channel, The Graham Stefan Show, I post there every single day I'm not posting here.
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