Here is an update on my renovation that has officially gone over budget, and is now costing me over $100,000 to complete – here’s the ROI and breakdown. Enjoy! Add me on Instagram: GPStephan
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I bought this place with a tenant who had already been living here for over 10 years. By the time I took it over, the unit was in pretty much original condition – which is basically another word for: it’s a disaster and needs a lot of work.
Well, those tenants ended up moving out a month ago – and that left me with a unit that needed a complete overhaul. Unfortunately, this wasn’t as simple as just replacing carpet and slapping some paint on the walls and then calling it a day…
This unit is located in a fairly desirable part of Los Angeles, so in order to get top dollar – it needs to be done up all the way, and done correctly. Plus, in order to do that – this unit needed the floorpan re-arranged, it needed another bathroom added, it needed ceilings replaced, and it needed an entirely new kitchen, etc.
So, with that…about 2.5 weeks ago, we started demolishing the unit, tearing out the walls, and seeing what was behind.
But as we got behind the walls, I began realizing that things would cost just a little more than anticipated…
Now, keep in mind – initially, I set my remodeling budget around $65,000 – just KNOWING that it was going to be more like $85,000 by the time it’s done. Because now, after doing 5 renovations…I just assume it’s ALWAYS going to cost more than I think, and it’s going to take LONGER than I expect it to…
Although this one, I admit…I underestimated, a bit too much. Even at my final $85,000 estimate… I was still off.
These are the details about the home renovation, my expected return on investment, and other questions you have asked for 🙂
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
bro, did you just green screen this… greattt work dude
You should get out of California! Those taxes are bad there.
Well here’s the thing tho. If you get one cheap enough or at least not too bad and you know how to do the majority of the work just kick back in a cheap house then use the money you save your own way how you decide to furnish it instead of paying labor you can invest into quality and earn a return on whatever work you decide to do.
Graham: “Here I am in front of my green screen”
this comment is strictly for the youtube algorithm
Who thought that he was using a green screen
I love videos like this. I watch these kind of videos all the time. Keep them coming
hey graham, what are you thoughts on investing in foreign property, with interest rates and property prices so low, one could think they could get by just having the property managed.
If we take the 85k difference between basic 15k renovation and the 100k you spent, and the 600$ (low end of your estimation) more you can rent the unit it would take almost 12 years to break even on the renovation, with the high end of your estimation (750$ more per month)it would break even in around 9.5 years. Is it going to really be worth it? Are there other tax credits that make it worthwhile?
2.5 guys for 2 months? Sounds like you got Charlie Sheen and company coming over.
This is why I like REITs…
These are by far my favourite videos of yours. Keep doing the renovation videos!!!
By far my favourite part of watching your videos is the transparency and how open you are about what costs what and what makes more money for you.
I love watching the progress on this renovation project. I am doing something similar to an in-law cottage that I plan on renting out. I’m so frugal that I’m doing all the labor myself. It’s a pain on the ass, but I’m loving the money I’m saving. I’m looking forward to updates.
Like button= SMASHED.
Needs to be done correctly AND done the right way
Some scenes look so green screen lol.
would it not be much cheaper to put this wooden crap house to ground and build an new one?
Graham, Great job !!! Three months ago I finished my renovation. I used an invisible door with Magic2 hardware for my difficult accessed pantry. I’m very pleased with the result. Check this out here >>> https://www.affestore.com/magic2-concealed-sliding-door-systems But for my bathroom, I install double action door ( link on the end ) and I save so much space here >>> https://www.affestore.com/ergon-double-action-door-system
Quite an irritating little rat of a man.
Nice green screen
I smashed the like button
This is great! It was a big help.
This is the type of video that I love! With a bit of building/carpentry experience (built my own house here in Sweden with my carpenter dad) it’s really interesting to see how walls, windows, insulation (or lack thereof 😜) and everything else is being done over there.
Please document and show as much as possible from this renovation! 😀
Sure thing!!
I appreciate your videos on the rehab. It’s going to be beautiful. I and my granddaughter couldn’t believe how dirty the renters left the house. If I were to rent I would treat it like my own for sure.
Too many ads ….
SMASH THAT LIKE BUTTTONNNNNNNNNNNNNNNNNNNNNNN
I need one of those avocado toast society sweater. 😅
Graham, just a suggestion. I think it would be a good idea to come up with a title for these videos and be consistent with using it. Making it clear that this is part of a series. If I hadn’t watched the first video I would not have clicked on this one.
$2800 – $2950+ a month?!?!?!?! no wonder why people are fleeing Cali!
Is the house renovation consider a tax right off because you are using it for you channel?
New to your channel, love all the information!
3000 rent? Rent where I live here for a house like that would be 300$ gg xD
think the girl dumped him
He is complaining about the workers paying he should move to germany
I think it would have been cheaper to build a new house.
yeah might go up to $125 k after factoring all landscape/ hardscape other misc. item. And this is not adding Square footage 🤦♂️ Let me know if you need help I know good subs if you need things done!
Honestly 50 an hour isnt bad. Im on the east coast in my field (cabinet maker) I j ow I’m billed out at anywhere from 65-75 an hour and I know plumbers and electricians are billed out upto 250 an hour. I know things like insulation and drywall are less but overall seams low
Dude definitely has a green screen it looks so fake and he has never actually touched anything like like the equipment in the background or walls it has to be fake
I think it would be super cool to have a walkthrough of how he chooses properties, listening in to conversations he has and such. I think it would be super beneficial for us who want to go down the landlord path
$50 an hour for a licensed contractor?! that would be considered low in my area of California (Truckee/Tahoe). We charge $65 an hour, and we are completely booked with work for this year, and the phone won’t stop ringing with new project requests.
Being a licensed general contractor I am often the jerk that has to put people in check with reality. Customers will say “I estimated this project to take $10k” Nope, it’s ALWAYS way more than you think. And people always forget how quickly all the little extra costs add up.
The market is still on FIRE right now. Everyone and their mom wants new homes, and remodels done
While your doing the renovation do you look at any of the tax credits your can get for various items Federal or State, For example solar Panels or ?????
You can thank OSHA for that porta potty
Wonder what Kevin would say about a total overhaul of a rental… 😉 J/k, but hey it must feel like truckloads of work left to do, standing there among all bare studs…
He reacted already and provided a better plan for the master bedroom.
Oh wow don’t replace all windows lol
As luck may have it, you found someone who is interested in construction renovation AND investing/debt killing.
Only problem is that he said he wanted to tear down and replace with a 4-plex in 10ish years. He’ll only get back about 80k from the reno in that 10 years. Still out 20K. I think with the plan to tear down in place a quick cheap reno would have been a better idea.
saludos hernano
Graham, I just appreciate your content so much 👌 I’ve never hit the like button for a single person’s channel as I do for yours. You’re ‘smash the like button’ plugs really work haha
Totally missed this series based on the title and “click bait” (doesn’t seem relevant to the content and indicative of series). Love it. Had to go find the past videos to catch up. Can’t wait for more follow up videos in the future.
I was just wondering if you are doing all these renovations why don’t you get your own team of workers together help them get licenses and have them work under you to help you with each renovation like one for plumbing one for electronics exc and when the renovations are done have them go out when a Tennant has an issue instead of going yourself, might save you money and time, but it could be worth it even more so if you find people you trust to work under you.
yeah it cost you 100k, but you sold your tesla stock right?
hahaha, you can’t fool me!
Hmm that extra money you are getting per month… doesn’t probably factor in the lost rent while renovating as well, wonder how long it will take you to make the renovations worth it? Would be keen to know.
Why does it look like a greenscreen lol
Graham, haters gona hate. Keep it up with the green screen!
I prefer a video like this over some of the other videos you do.
You should wear a green shirt for the next update. If it was a green screen you’d be a floating head, which frankly would look pretty cool
I allways smash your like button!!! Love from Argentina!
Hi, Graham. All seems rad, except, what about all the freaking taxes you pay? Rental income tax? Property management time and expenses? Haggling with Best Buy to honor warranties? 🙂 Your ROI is definitely skewed. Fill us in these intricacies… and Thank You!! You are rad!
I wouldn’t take Gramham route, being a triplex owner, but Graham is an expert. Personnally, i would take the cheapest option, even add some $ for some more upgrades. Knowing that the total overhaul would be in the 100K,, that is way too much for a rental. The amount of $ should go into your own home, but again, you cannot deduct from your taxes.
Lmao da holidays I’m not familiarwith that concept
Your jokes sound like you said to them ppl fr I believe you said these things.
As someone who is crafting their financial journey to be able to do this one day I really appreciate you going to the extra effort of making these videos even if they are not as successful as some of the other videos you do. A lot of people make the financial and credit card videos but these are the ones that really make me enjoy going to your content so thank you. I am at least one viewer that appreciates that.
is there an update to this video? I can’t find it.
What house this big is only $3000 per month in the LA area?!
What is the update for this remodel?
Where did you buy your desk and trex skull? I really love your “studio”.
Why do these types of videos make less money/cpm than the normal investing/financial type videos?
U make that in less than a month😂😂😂😂😂
People worried about the size of your head.
Make a bobble head and sell it. 😂🤣😂
Wtf
I got a place its alittle motel in a small town next to a inter state in between two big city’s with a truck stop next to it and the owner wants 175k for it no joke either
Hahahahah yes that porta potty is completely forgotten unless you have to pay for it. )
I’m not sure that this 100k investment is a positive return. Assuming 8% required return his 20 year NPV is -11k vs -15k just doing the “minimum” work. That is assuming he gets the high end of $2,950 per month. Graham, you need to study up on your NPV’s. It would be better and easier to invest that 100k into the market generally speaking. The upside I could see is using the asset (house) as collateral for a loan to reinvest at a higher rate. Using the increase value to fund other investments but still, seems like a poor $100k spend based on time value of money.
The thing real estate youtubers don’t talk about enough is the RISK of property ownership. The housing market, like any market, has a base value of market cycle risk. Properties have more risk – physical damage, market, taste, and liquidity risk. Your required return for a more risky asset, like a property, should be a couple points higher than you expect to make in a portfolio of large stocks (and a portfolio only needs 4 stocks to diversify away 70%+ of the risk).
Short story – Don’t believe a YouTuber just because they say their investment is a good one. Graham is a marketing and real estate guy who has interest in markets. He is not a finance or economics expert.
As a union construction worker, I saw a guy with a hardhat sticker that really stuck with me. Cheap labor is not skilled, skilled labor is not cheap. Still sticks with me to this day
Have you ever done the job yourself?
Moral of the story, if you want to renovate a house, figure out how much it would cost to demolish the whole thing and rebuild it and do that instead because it’s going to cost that much anyway and just be a rollercoaster of disappointment.
Looks like a green screen
Hey Graham for your channel I will…
*SMASH because you’re frugal
* SMASH because you’re funny
* SMASH because you harassing me too hahahaha
Thanks for another awesome video! Keep it up!!
Where do you get the money for the renovations?
I def appreciate these remodeling videos… so thanks! 😊
Lol graham now asking for likes for the youtube algorithm is like 2nd nature to you
You went insane! You might as well flip the property.
People actually pay $3k to rent? That’s insane. If people can afford that kind of rent why can’t they just buy a house? Location location I guess but that’s stupid in my opinion.
Gram I got it, your next YouTube project that will set you apart from everyone else.
“Mentoring Millennials “
Using your videos as background for teaching now you will take it to the next level, each video will be an episode where you will select a lucky person ( me being the first one) to mentor on a specific subject, Stocks, Real State, Retirement plan, Savings, Credit Cards, any subject you have talked about in your videos.
The person you select will pick the subject he wants to be mentor in and spend some time with you a day or two. You will go in depth and mentor that person as best you can.
Then you can do a follow up video on how that impact or change their life.
Example me after I go and do the program on lets say real state, and see what I done after if I bought any real state or have made a plan etc.
What do you think?
Personally, these videos are quite great and refreshing from the usual credit advice!
Love you Graham but this looks like a green screen at the beginning…and on the toilet(lol)
That’s a lot of coffee
Eeee aaaaaau
You could have done half of the important stuff rent it out for two years . Then you could evict for the rest of the renovation then sell and avoid the taxes . Plus enticing a new buyer with Reno’s.
I’m testing the algorithm, let me know how it goes Graham.
With a $100,000 budget you might as well flip it and sell it
Awesome serie of videos! Thank you Graham 🙏🏽
I learned more watching grant’s videos in one week than a whole senior school year
11:15 i think its the title of the vid, try insert “Episode” on the title to let the viewers know of the sequal
Did this house get finished before covid shut everyone down?
It’s so weird how it still looks like a green screen even though I know it’s not.
I don’t understand why spending 85,000 to make 600 to 700 more.
if you take the minimum, so 600, and calculate your ROI on the extra cost. (85,000 / 600) / 12 = 11.8. It will take you almost 12 years to get that money back, but he wants to tear down the place in a few years. so he is basically losing money….sort of. correct me if I am wrong, maybe I forgot something.
graham: makes a video on his $100,000 renovations
graham next week: “how i payed $0 to renovate my house”
Hey with tax saving season coming up, could you talk about taxes and how to be able to save the most money!