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After finally clearing out her late husband’s building, Heidi successfully sold the property for $1M. Now, she’s hoping to re-invest in a residential property and make it her main source of income. In episode 4 of Backed By The Bros this week, Drew and Jonathan helped guide Heidi through renovations, and offered guidance on how best she could utilize her budget to make this new property work well for her and her future renters. Heidi put everything she has out on the line—the money she made from the sale of the building, plus her entire life savings, amounting to $1.3M in total.
In California, if you owe capital gains on an investment that you sell, you can defer that tax if you find and buy a replacement property within 45 days. The Bros highly recommended that Heidi take advantage of this, as it would save her about $100K which she could put toward renovating her new space or buy a better investment. Heidi’s wishlist was a single-family home that’d need minimal renovations in Burbank, California, with 3 bedrooms, storage space, and a big backyard. With only 45 days to find her perfect match, Heidi and the Bros got to work.
Drew and Heidi took a look at a couple listings and talked in detail about what kind of work would have to go into each one. They narrowed it down to two.
The Potential Residential Properties
Minimal Reno With High Potential
Stats:
1,600 sq ft
7,600 sq ft lot
2 bed/2 bath
$1.19M
Projected Reno:
$70-100K
1-2 months
Potential ROI:
$4K–5K per month
Though this house only had 2 bedrooms, there was an unused garage space with the potential to convert into another living area or bedroom, which would help boost the home’s potential rent. The rest of the interior was pretty move-in ready, sans a couple minor cosmetic upgrades they’d have to make. The backyard would also need proper landscaping.
But compared to the other home, the projected reno budget for this house is way less. As in, almost a third less—and with a faster turnaround. However, the potential Return on Investment (ROI) isn’t quite as high as the other home.
Fixer Upper With a Big Return
Stats:
1,900 sq ft
6,700 sq ft lot
3 bed/2 bath
$1.15M
Projected Reno:
$300K
4-5 months
Potential ROI:
$66K per year
This home had everything that Heidi wanted, but it came at a cost. The home itself, both inside and out, looked tired, and needed some help reaching its full potential. Though it did have the bones she was looking for, there was still a ton of work to be done throughout to make it livable, and bring it up to standards.
The budget for this one would be far bigger and far longer than the other home they looked at, but Heidi’s potential ROI could be larger.
The Brothers’ Backing
In the end, Heidi decided to go with the first home, the Minimal Reno With High Potential. Drew and Jonathan agreed to back Heidi by offering their contractors, one of their designers, Lee, and one of their landscape architects, Jake, as well as their mentorship and some materials.
With one larger renovation at play here, Heidi had to be as efficient as possible with her time. The garage that they had planned to turn into a third bedroom ended up being a little more complicated of a task then they initially thought. After digging into the permits and the work necessary to safely turn the garage into a third bedroom, they realized it might be more trouble than it’s worth, and would also take about triple the amount of time to get ready for tenants, which would leave Heidi without income for a few months. So instead, Heidi decided to turn the garage into a livable flex space so she could get renters in there right away.
Before and Afters
Light, Bright, and Modern
Is this even the same place?! The garage space was converted from floor to ceiling and turned into a completely new, modern-looking abode. Comfortable seating and converted doors make the space look nothing like a garage anymore. Instead, it’s a chic, spacious flex space with tons of natural lighting.
Ultra-Cool Seating
The round, oversized swivel chairs make this flex room feel effortlessly cool. Ample seating provides the perfect amount of space for game nights or movie marathons, and allows renters a separate space to hang out when they have friends over.
Pops of Color
Not only did they create a fabulous chill zone for tenants, but they were also able to turn the back wall into a handy workspace, complete with a desk and bookshelf. If a tenant works from home, or simply needs somewhere quiet to get their projects done, this will be the perfect solution for them.
Break Out the Outdoor Dining Set
By creating a beautiful outdoor dining area for tenants, the whole backyard suddenly becomes a useful space. By implementing plants and greenery, and refinishing the deck to look and feel refreshed, this space gets a total makeover. Tenants will love the extra space, as well as the sophisticated feel of an outdoor dining area.
Somewhere to Chill Outside
With the advice of the Bros, Heidi also decided to make a bonus space off the side of the deck, and turned a once run-down side yard into the perfect lounge area. Now, renters and their friends and family have somewhere to relax and talk after their backyard dinner party.
Shop the Look
Check out the decor, furniture, and more seen in this episode–and get it for yourself!
Click here to see all of the items featured in this episode!
| wdt_ID | wdt_created_by | wdt_created_at | wdt_last_edited_by | wdt_last_edited_at | Room | Item Type | Product Name | Company | Product Code / Sku |
|---|---|---|---|---|---|---|---|---|---|
| 1 | Kelly K. | 29/05/2024 12:08 PM | Kelly K. | 29/05/2024 12:08 PM | WHOLE HOUSE | FLOORING | "PYRITE" | VILLAGIO | PYRITE LVP |
| 2 | Kelly K. | 29/05/2024 12:08 PM | karina | 22/08/2024 11:44 AM | WHOLE HOUSE | STAGING | N/A | SPRUCED HOME | N/A |
| 3 | Kelly K. | 29/05/2024 12:08 PM | Kelly K. | 29/05/2024 12:08 PM | LVING ROOM | ENT. | Sharp Roku TV 55" Class (54.5" Diag.) OLED 4K Ultra HD | SHARP | 4T-C55FS1UR |
| 4 | Kelly K. | 29/05/2024 12:08 PM | Kelly K. | 29/05/2024 12:08 PM | LIVING ROOM | TV ART | "TURNER BEACH" | JUNIPER PRINT | "TURNER BEACH" |
| 5 | Kelly K. | 29/05/2024 12:08 PM | karina | 10/09/2024 09:39 AM | EXTERIOR | LANDSCAPING | N/A | THE STANDARD DESIGN GROUP NURSERIES |
