All language subtitles for Backed.by.the.Bros.S01E10.1080p.WEB.h264-EDITH[EZTVx.to]_English (SDH) [English] (SUBRIP)

They've done some
investment properties before,

so they should know
a little something.

If they don't know
a little something,

they're about to learn
a little something.

Massive undertaking.
Potentially massive profit.

It smells like money.

We just want to help people
get into good investments

or to help save them
from what's turning
into a bad investment.

I don't know what I'm doing.

I've never flipped
a house before.

Had you rented it out
from the beginning,

you would have
made over $400,000.

Ah!

So we want to back you guys.

[women cheering]

$100,000?
You're freaking nuts.

What you're looking at doing
with this house
seems impossible.

We made so many
mistakes early on.

I wish we had a mentor
who could tell us
"No, no, guys, bad idea."

Rookie mistake.

They're already
200 grand in the hole.

Obviously, this
needs some work

On paper,
Some things can look great.

In person,
whole different story.

We got a problem.
You gotta tell these guys
to stop everything right now.

If they don't get this right,
I think they're done.

[woman] This is life changing.

This is gonna turn the page
to my career.

Who wants to make some money.

[upbeat music playing]

[Jonathan] One of the things
we always look at as investors

is what is the best use
for a property.

[Drew] In California,
they have passed legislation

that actually
allows any property
that's a single family home

to have an
additional dwelling unit.

[Jonathan] An ADU
is essentially another
avenue for revenue.

That could be a garage
you converted.

That could be a rental space
in the basement.

[Drew] This is a great thing
because we have
a shortage of housing.

And that's a great thing
for people looking at
getting into investment

because you know
there are so many people
looking for a home,

looking for a potential ADU.

Renovating
and getting these kinds
of units onto the market

is something we definitely
want to invest our time in.

[Drew] We are
meeting up with Denise,

who is a homeowner
who wants to be an investor.

She and her husband
have this garage sitting
in their backyard that could

absolutely bring in
some revenue,

but it's been sitting there
doing nothing for them.

[Jonathan]
So this will be interesting.

-Haven't done a ton
in Echo Park.
-No.

It's been a while,
and also this is
a historic area, so...

The demand
for this neighborhood

has really grown
over the last decade or two.

There's a lot of opportunity.

[Jonathan] Renters
want to live here.

It's a very walkable community
with lots of local businesses.

[Denise] The overall goal
that my husband and I
have in mind

is to get some income
that will make life
a little bit easier.

We have a
unique historic property

that we've made
a great effort to renovate
and restore.

-It's here.
-Is it?

[Denise] We want that
same kind of care
taken with our ADU project.

-Hello! How are you?
-Hello!

How are you? Nice to meet you.

Hi. Denise.

-Pleasure to meet you.
-Nice to meet you.

What a beautiful home.

You have clearly
done some work.

We have. But what
we really need help with

-is the garage conversion.
-Garage.

-Yeah.
-So how long
you've had the house?

Twenty-three years.

Oh, wow.
How much of that time
have you spent renovating?

[Denise chuckles]
That's a good question.

About 5-7.

-Okay.
-Okay. That's not bad.

[Denise] It's not too bad.
But why you're here

-is around the corner
in the back.
-The garage.

[Drew] Hey, it's like
stepping back in time.

[Denise] Yes.
My husband and I,
we've wanted for 23 years

to convert this
into a living space.

But the house took
so much time and effort
and energy to do,

that we put it on hold.

-And...
-I'm pulling out
my calculator.

-And if I was to
average things out...
-Oh! Don't do that.

So that's 23 years at, say,
about $1500 a month.

You realize,
had you fixed this up

and rented it out
from the beginning,

-you would have
made over $400,000.
-Ah!

Yeah. Out the window...

-[Denise] Okay, so time is
of the essence.
-Absolutely! Of the essence.

And so,
I'm glad you're doing it now.

[Drew exclaims]

Because nobody would be
renting this right now.

-No.
-Oh, my God!

Did you do
any of this on the walls?

[Denise] No, no,
no, we did not.

How big is this?

About 380 square feet.

-380. Because
it doesn't feel that big.
-Oh.

There's definitely
a moisture issue up above.

Did you replace the roof?

[Denise] We did
when we bought in 2003.

So that is a big no-no.

A skylight in the attic.

It will get so hot up there,
that it will cause
a lot of humidity issues.

And that can also breed mold.

[Denise] We've had friends
say, "Oh, just tear it down,"
you know,

"And start anew"
and we say we can't.

Because we have
all these restrictions

being in a historic
preservation zone.

A lot of the structure
is not going to be saved.

Like, it's in pretty
rough shape.

-Right.
-I mean, you have to decide
what you want it to be.

Do you want it
to be a one-bedroom?

Do you want it to be a studio?

Have you looked into the rents
in the area at all?

We have, and we're thinking
maybe we could rent this
for about 2000-2500 a month.

With it being like a studio.

2500, you know,
you're starting

to get into
one-bedroom territory.

[Jonathan]
I'd say 2200, maybe.

The bad news is
there's not a lot to keep

because the slab would all
have to be repoured.

You can see it's heaved.

It looks like it's actually
sunk into the ground a little.

Inside the walls,
you can see
all the moisture damage

and you've probably
got critters living up above.

What kind of a budget
have you been looking at?

Roughly about 150,000.

Where did you get 150 from?

[Denise] Uh, just, you know,
what we've saved
up to this point,

and I haven't really
kind of compared it

to, you know,
other ADU properties.

Okay. So there's
literally no research

or quotes
or anything like that.

You just... That's a number
you want to work with.

It's kind of like
how much we'd like to spend.

Yeah. Why do you think
this is a good investment?

[Denise] I think that
it's an incredible area

that people
would want to live in.

I don't think
we would have
a hard time finding a renter.

For us, it's going to
get us to a point

where we have
more financial freedom.

We also have
a teenage daughter

who's going to be going
to college in three years.

-Those price tags
are pretty large, so...
-Yeah.

This would help,
you know, with that.

Have you dug into any
historic restrictions at all?

Uh, I have not.

It's what you can see
from the street

-is what they care about.
-[Denise] Yes.

We could easily make this
look beautiful from the street

and do whatever
we want back here.

So this is why
we want to work with you.

Because you have
all this knowledge

and that would take off
so much pressure.

You know,
we were able to do the house,

but you know,
it was nerve racking.

If we try to
tackle this project,
it could take like 3-5 years.

There's definitely potential.
You have to keep in mind

when you're looking
to rent this out,

if you want to
get a premium rental,

you need to have
a lot of pluses.

-A lot of extras.
-Okay.

You don't really have
the space for a private yard.

-Mm-hmm.
-And you don't have an option
for a private access.

So you're not
going to give them

that one thing
that some people want,

which is a
little private space

unless you
eat into half your yard.

That's funny.
I didn't even
think about that.

The biggest question is,
is this doable?

[Drew] I mean, it's doable.

It's relatively
straightforward.

It's just the building itself.

The structure itself
needs a lot of work.

It's a smaller garage
than your typical 20X20,

so it's not gonna be
quite as expensive.

But there are a lot of other
headaches with the slab

and everything else
that has to be redone.

In the meantime,
we have a lot to talk about,
properties to see.

Thank you so much.

So what's at stake
with this project
is that it may never get done.

It's been 23 years.

I don't want to
wait any longer.

[Drew] I guess the
first big step is going to be
to start putting down

some layouts on paper,
understanding
the length of time

to push a permit through here.

Plus, the historic commission.

It's a challenge
because of the size of it.

It's going to be
a little bit tight.

But I mean, it's a studio

Studio could turn around
the construction
side pretty fast

once you get
the concrete poured.

Well, once you
have the permits
and the concrete poured.

But I would say, you mean
this other one sounds
like it gets two studios.

So I want to see that
before we make any decisions.

-Meet you over the other one.
-Yeah.

We're not here
to help everyone.

We wish we could,
but we have only a certain
amount of resources.

We only have
a certain amount of time
to be able to help out.

So we need to make sure
that we make the right choices

-with the right investors,
-The people who are willing

to put in the work,
the people who are
willing to listen,

those are the people
we would love to help.

[upbeat music playing]

[Jonathan] We're heading
over to the next pitch.

[Drew] Kristie and Tom
are in Highland Park,

which is a great area,
big rental market.

[Jonathan] Apparently,
they have two studio suites.

Which is great.

That's two separate
revenue streams.

[Drew] But they
want to combine it into one.

I don't quite understand that
because the the rental
per square footage

would be a little bit more
as two individual units.

This is why I like
just getting on site.

On paper, some things
can look great.

In person,
whole different story.

I was looking along
as I'm walking just to see.

Not as many
conversions for garages
as I thought there would be.

Well, it's definitely
gonna happen more and more,

especially with the city
incentivized
to get more housing.

Yeah.

We've saved around $200,000
and it has taken years

saving and saving
to afford to change

this back house property
to an income generating ADU.

We've been dreaming
about renting it out
for the past couple of years.

Our ultimate goal
is financial freedom.

Hopefully renting out this ADU
will allow us to travel.

[Tom] We need
that push to help us
get it into something

that's really usable
and really nice.

How you doing, Tom?

How are you? Drew.

-Nice to see you.
-Nice to meet you.

I don't think we could
do this project on our own.

[Kristie]It's our first big project.

We're ready to move forward,
but it's also really scary

when you're putting
this much money on the line.

[Jonathan] Tell us
about your property here.

So the front house,
it's a 3-bedroom, 2-bath.

In the back, right now,
it's two studio units
one on top of the other.

[Drew]
And you have had them rented,
or they are currently rented?

In the past, only to friends,
because it's not permitted
as an ADU.

It's permitted as
two bonus rooms.

Because right now, it's
really two separate units.

To go to the top one,
you've got to use these
stairs on the outside.

[Jonathan] Not getting
this permitted so you
could rent it out

was a terrible decision.

You've been sitting
on a gold mine
and just wasting it.

Where are you at right now

as far as
getting plans approved
and things like that.

We have plans
and they're stamped approved.

-Oh, wow.
-[Drew] Wow.
You're ahead of the game.

You do have some water damage
under your stucco.

You'd want to
check all that out

to make sure
that there's not rot

or problems inside the wall.

Pretty cheap stucco job,
which makes you wonder

what else was done
quick and cheap.

What are you planning here?
What's this?

This is a spiral staircase
that goes up into
the upper unit.

That's how that
would be accessed.

Bathrooms need
some revamping too
to kind of configure it.

[Kristie] I would love
for this downstairs bathroom
to have a bathtub.

Would you need
the tub down here, though?

Or if the bedrooms
are upstairs,

normally you would
have the tub
where the bedrooms are.

Yeah, whatever
it's going to be easier.

But what's more important?
Whatever is
the best investment

or whatever is the easiest.

The best investment.

[Drew] I'm not sold
on your idea of combining
these for the best investment.

You're going to get
more money per square foot

as a studio one-bedroom
than you would
as a two-bedroom

if you combine
the whole thing.

Well, I guess
it's not necessarily
the best investment.

It's a better setup
if we end up moving back here.

Because, you know,
as my son gets older,

maybe we want to go take out
our 4X4 camper and explore.

And so we all moved back here
and rent out the front house
at some point.

-Okay.
-So to get more rental revenue

-coming off the main house
-Yeah, that's right.

I like that
you're willing to do it.

You're thinking
of the numbers.

Knowing now that
they want to eventually

move into this back house
and rent the front one,

from a revenue perspective,
that's a great idea.

Because the front house
would rent for a lot more.

And if you guys are planning
on traveling as well,
it doesn't need to sit empty.

Yeah.

The success
of this rental property
is really important to us

because it's really
securing our ability

to make choices around
what we want to do
in our lives.

We're starting to
travel with my son.

[Tom] Right now we're even
converting an old ambulance

into a 4X4 camper.

So being able to go out
long term in that

and then come back
to a small base camp,
it would be good for us.

What we love to do
is have that

become our life
and part of his education.

-Can we look upstairs?
-Yeah, absolutely.

Yeah.

Were you planning
on keeping these stairs?

[Kristie] We're gonna
eliminate those stairs.

They wouldn't need
the outside access,

and it would allow
for a walk-in closet here.

However, you can't get
furniture up
a spiral staircase.

And that's not gonna work
for most renters.

I like a spiral staircase.

Just for easy access.

But It is not functional
when it comes to moving in
and moving out.

[Drew] And getting rid
of those outdoor stairs,

I think that that's gonna be
more pain than anything.

It's gonna cost quite a bit
to rip that out

and then all the exterior work
to patch up and fix it.

[Jonathan] You're making
choices that you're totally
gonna regret.

You're wasting
your time and money.

And I just got to say,
you need to rethink your plan.

[dramatic music playing]

[Jonathan] Tell me
what your plan is.

-So, spiral staircase,
two bedrooms.
-[Kristie] Mm-hmm.

[Jonathan] Keep
the bathroom where it is.

How much time
have you been thinking

about the layout
that you've had here?

A few months.

We worked with an architect
and this is basically what
they said they could do.

It feels choppy.

There are
a lot of little galleys
of wasted space.

I feel like you would
end up creating
two [bleep] layouts here.

Like, really, really tight
bedrooms that are
not functional.

[Drew] You've also got that
great deck area outside.

That could be
a huge moneymaker.

So you want to
prioritize that.

I'm assuming this is
your main bedroom
over here, right?

This is the big one.

So then all of sudden
you have the main bedroom
that doesn't have

a walk out to the patio,

but then you have
this tiny little bedroom

-that would have a walk out.
-[Kristie] Yeah.

[Drew] If you want to increase
your potential rent,

you're gonna want easy access
to that outside area.

It all comes down
to budget as well,

but you were gonna
spend a ton of money
ripping those stairs out...

-[Kristie] Yeah.
-I think you should keep those
as your stairs for this unit.

-[Kristie] Okay.
-And then not do the spiral.

I hate spiral stairs.
They're not functional.

-Okay.
-Let's step back downstairs.

I want to talk a little
bit more big picture.

So what is it
you would need from us?

I think bringing
that experienced crew.

This is the biggest
investment I will have made

other than buying
the house that I knew
I was going to live in.

It's different to be making
a real estate investment.

That's where I would love
to have the stress level
come down a little bit.

Right now it's a space
that sits unused.

[Tom] Yeah, you gotta
maintain it anyways.

Right now, it's a liability.

We want to make it an asset.

This probably could cost
$350,000-400,000.

This, we would be
paying with our savings.

But we could do a home
equity lien if needed.

[Drew] Yeah. Just be ready
for any additional costs.

Probably the number one
mistake most people make

is out of fear

they don't pull the trigger
on a good investment.

I think this is
a good investment.

-Yeah.
-I think there's
a lot of potential there.

Comparable units in the area
are getting $40,000 to $50,000
a year in rent,

and that's the kind of money
that you're just leaving
on the table.

We have a lot to discuss.

If the brothers don't back us,
this will put a lot of
things on hold for us.

It's our first big project.

It's gonna be
incredibly stressful,
and it's our savings.

Well, definitely
an interesting project.

I kind of love Kristie
and Tom's sense of adventure.

Who wouldn't want to
rent out their ADU,
make some extra cash

and then travel
across the country
sooner with their families?

[Drew] No, that
sounds amazing,
but as an investment,

they've already made
poor decisions.

They're on the verge of making
some very expensive
bad mistakes.

And then, on top of that,
she's the money person

in this relationship,
and you can see
that she's in over her head.

We don't cash in
on any of the
potential profits,

but we do stand
to waste our time
and our resources

if we back the wrong project.

Denise is a rookie investor
sitting on a gold mine.

She's just finished
a massive renovation
on the main house.

And she has
a little construction fatigue.

So she wants us
to take the reins

and get this
garage conversion done.

Her daughter
is headed to college,

so Denise would like
extra income to help.

But this is
a historic building,
and there's no way to tell

how long we'd be tied up
with permitting.

[Denise] It's going to
get us to a point

where we have
more financial freedom.

[Jonathan] Kristie and Tom
are also first time investors

and they are
totally overwhelmed.

And they want our help
to convert their bonus space

into a rental
that will fuel their dreams

of being able to
travel with their sons.

They have permits in place,
but they've made a huge
mistake with the plans.

They need our mentorship
as well as our contractor

and design team
to get it right.

But they'll also need
constant hand
holding along the way.

This is the biggest investment
I will have made.

I like that these guys
have the plans already.

It's just that
if we're gonna tweak it,
how long that would take?

[Jonathan] I think
we can still tweak
their plans a bit

without causing a big
red flag with the city.

But I guess
my bigger concern is

they're making it a little bit
of an emotional decision

because they might move
back there at some point,

so they want to
keep it in a two-bedroom.

Even just with the
conversations we were having,

there's so much that
they didn't even think about.

Yeah. I honestly think
we can pull the trigger.

I think I know
what I want to do.

Uh...

I honestly think
we can pull the trigger

You want to do... this one?

-Yeah.
-Let's do it

With us involved,
we can get it done quickly,

and we can get it done
for the best price possible.

For Denise's ADU,

she's nowhere near
getting started
on the renovation.

But we can give her
some guidance
on how to get things rolling,

so she's one step closer
to cashing in
on that opportunity.

-Can we just pop back in now
and tell them?
-Yeah.

-Let's do it.
-Or do you want to
make them sweat?

-Yeah, we'll just
call them tomorrow.
-Nah.

Kristie and Tom
have a lot of ideas,

but I think one way
we can back them
that will really help

is the design side of it.

Their plan is not great.

But also on the trade side,

we can get them a GC
who will see this project
through right to the end.

I don't think she needs to
sweat anymore.

-No.
-You can tell
she looks stressed out.

All right.

[knocks at door]

-Hey, hey!
Sorry we took so long.
-Back so soon.

You have an amazing property,
you really do.

And I can see
how stressful this has been.

We want to make sure
that you don't make mistakes

pulling the trigger
on something that's
not optimizing the flow.

We've decided to back you.

[laughing] Thank you!

-Ready, guys?
-Yeah.
We're looking forward to it.

-Yeah. Thanks so much.
-Thank you.

I figured you wanted
the good news today, so yeah.

-Thank you.
-Thank you.

[upbeat music playing]

They have a lot of
their hopes and dreams
riding on this property,

especially with the savings
they're about to spend.

They're going to need $350,000
to complete this ADU.

They've got 200 grand saved,
and they'll take a loan out
for the rest.

[Drew] But we also have a lot
riding on this, too.

I mean, finishing on time
is paramount,

so we bring in
the best of the best

to make sure
we can get it done.

[Jonathan]Adam is a general contractor
who we've worked with

on a million projects.

He's big enough that no matter
what we throw at him,
he can tackle it.

And I know he's somebody
who can get this done
immediately.

[Drew] Well, Kelly
is a great designer.

When working
with small spaces,

you need to have a designer
that's a problem solver.

And she is good with puzzles.

[Jonathan] They're both
available for 12 weeks,

and I think we can get it done
in that time line.

The most important thing
for you is organization,

having a team
that you can trust,

and we've worked
with these guys
for a long time.

So you'll see
when we walk inside
and look at the footprint.

Their idea was to
have a spiral staircase

to connect the two
so it can be one unit.

I like the design
with a spiral staircase.

I also like the fact that
you have an entryway

to go upstairs this way

and an entryway to go upstairs
in the back as well.

But you want to
get rid of the back one.

-Yeah.
-But I don't want
to get rid of the back one.

-Okay.
-Yeah.

I think we'll
have to see. [laughs]

[Jonathan] Let's jump inside.
So you guys can actually see
what we're talking about.

Why in the plans do you have
a shower downstairs
when there isn't a bedroom?

Because it's already here.

Can we shrink it?

Maybe. Comes down to cost.

Well, keep in mind
the cost to redo the tile
to put in a new tub.

We just need to do
a toilet and a sink.

We could probably gain you
a little square footage here

and not have to replace
all that expensive fixture.

[Drew] We can work
with your existing plans
to improve them,

and we'll aim to do that
without a big extra cost
or a long delay.

-If we had to switch the plans
to do a tweak like that.
-That's fine.

We just need to do an
on site condition change,

and we could get that passed
with the inspector sometimes.

This is a pretty easy tweak.

So what do you think on the
design side down here.

I think it's pretty
straightforward.

It's a small space.
We can do a lot with it.

I saw on the plan,
you guys have a laundry room.

The kitchen that wraps around,
maybe a kitchen table.

Keeping very classic,
minimal furniture pieces.

And then,
with the spiral staircase,
a nice sofa.

[Drew] From
a style standpoint,
if we can create something

that someone walks in
and they're like,
"Oh, my gosh.

I don't want to see
any other rental.
This is the one",

you will have a much bigger
pool of potential tenants,

which means you'll have
fewer headaches
and better rent.

Let's head upstairs.

Okay.

Before we say anything,
I want to hear
your first impression

as you're
physically in the space.

[Kelly] Holy small.
This is really tight.

Tight, tight, tight, tight.

Their original plan
has those stairs being demoed.

The reason you did that

is because your plans show
that being a closet
back there.

Looking at this room,
we put a wardrobe closet
in here.

Maybe we just
close this wall off
just a little bit.

Then you could put your bed
on this wall right here,

and then you could have
two night stands.

This bedroom is so tiny
that we really can't even
fit a dresser into it.

I thought maybe taking
the closet and doing
something built out.

So you have drawers.
We use molding.

We can maybe frame it out
so it looks like a built-in

And this is the bathroom
that should have the tub.

[Kelly] I agree.

I think the real
big question mark is,

is it even an option
to enclose those stairs

and then reclaim
what you were gonna do
for the spiral staircase.

The only two factors
would be timing
to go back to the city

and resubmit, and cost.

What do you think ballpark
would be on both?

[Adam] With foundation,
framing, stucco work,
35k at least,

above what else
we have here.

All of those permits,
all of the structural
calculations

have to be redone
because of this.

So I would say a minimum
like month, month and a half.

What's going
through your mind?

It's a big gamble.

To go down that road
of additional cost
and additional time.

An extra month and a half
is a little scary for us, too.

[Kristie] The spiral staircase
is really important.

There's not a lot
that we're sticklers about,

but this is
one of those things
that we really want to have.

So we want to
figure out a solution.

[Drew] Okay,
we're gonna start demo,

but we're gonna need
a decision on the stairs
in the next couple of days.

-All right.
-Thank you. We're so excited.

[upbeat music playing]

[Kristie] This is
a pretty big gamble for us.

It is a whole another property
for our future.

Like, we're ready
to move forward.

But it's also really scary

when you're putting this
much money on the line.

If the project
goes south for us,
it's our savings.

[Kristie on phone]Hey, Jonathan.

Hey, how's it going?

-It's going pretty good.
-Yeah, I thought
I would check in

and see if you've had
a chance to chat with Tom.

What did you guys want
to do with the stairs?

We just need
a decision on that.

Yeah. We decided that
we are going to
take your advice

and we'd like to
keep the stairs.

Okay. Amazing.

I feel like some renters
are gonna hate
the spiral stairs.

It looks cool,
but it's just
not as functional.

What did you think
of the idea of enclosing
the stairs, though?

Making it an actual
proper entry down below?

We considered the idea,
but the additional cost

and potential
impacts on timeline.

We're not going to
close the stairs.

[Jonathan] I get it.
No more delays.
Let's get this rented.

Yeah. I think that's the...
No additional costs.

On timeline
is the priority for us
right now.

Yeah. And what did you think

of some of the other
suggestions we talked about?

So we really liked
the suggestion of the
powder room downstairs

instead of the tub
to give us more space.

I love it. This gets us
on our 12-week timeline.

We will not delay.
We'll get it done right away.

All right.
We'll talk to you soon.

All right. Thank you.

[tools whirring]

[Drew] Plans are a go.

Downstairs,
we're converting that bathroom
into a powder room.

We're keeping
the outside stairs.

And upstairs,
to the two bedrooms,

we're rejigging
and we're adding
a second door to the balcony.

[Jonathan] Yeah,
it's gonna be so much
more functional for renters.

And the quick approval
was a huge plus.

We can now keep this
to a 12-week renovation.

Which means we don't have to
have it drag on any longer
than it has to.

Yeah.

[cell phone ringing]

-Hey.
-Hey.

Okay. Look
where we're standing.

Oh, my gosh.
It's an empty shell.

[Kelly] We do have to
talk to you
about something.

What we're realizing
looking at this

is there's not a lot
of surface space down here.

So tell them
what we're thinking.

Okay, so here's
what we're thinking, Drew.

That space that
we were going to utilize

for the washer-dryer
downstairs,

we were thinking about
taking that space back
before the kitchen,

letting that all become
outside storage.

We'll close this window off
because it makes zero sense,

because now we're just like
looking at a staircase.

We'll have access
to the storage now
from the yard.

-Yeah.
-Which is okay
with you, right?

-Yeah.
-Okay.

Moving the washer-dryer
upstairs next to
the first bedroom.

That would be the space
where we put like
a stackable washer-dryer.

Do you think that's possible?

Is that the side of the wall
where we were sort of
talking about like

like a whole wall of closet?

Yes, where the room ends.

There's kind of
a landing space

that we think could fit
a washer-dryer.

Right. I think
that's a great idea.

Having the laundry
up on the bedroom level

makes a ton more sense
if we can make it happen

without cramping things,
especially if it's
a spiral staircase.

Yes, dangerous.

With a laundry basket.

Yeah, exactly.

[Kelly] You learn
pretty fast that

Drew and Jonathan know
what they're doing,

and they definitely know
what they want.

So what I didn't
want to happen was

that Drew was gonna walk in
and he hated my plan.

I made an executive decision.

We get his a sign of approval,
and now we're good to go.

[upbeat music playing]

[Jonathan] Hey,
what's going on?
What's up?

[Drew] I heard from Adam.

And you know how we thought
they'll be a little bit
of stucco patchwork

to do at Kristie and Tom's?

Yep.

There's a lot
of stucco work to do.

-Like how much?-All of it.

[chuckling] What do you mean?

[Drew] Basically,
the water damage
was so extensive.

You do have some water damage
under your stucco.

It wasn't worth just trying to
to save the stucco patch.

They had to tear it all off
and we had to start over.

Oh, my gosh. How expensive
is that going to be?

I mean,
this is tens of thousands.

That's not really the news
that they are gonna
want to hear.

They're tapped out.
They're gonna have
to talk to the bank.

But if they keep anything
that's not done properly,

then in one year
they're gonna start

having leaks again
and more damage.

So no, it's better
to get it all done.

I was thinking, I'm gonna
hop over there when
I get a chance just to see

where else in the budget
we can save money.

-Okay.-Keep you posted.

[blows raspberry]

Do you want to
see the sheer wall
that we got out here?

So we had a little run in
with the inspector.

-Okay.
-For the joist
that we're behind here,

he wanted us to double up.

-We got that done for him
-[Drew groans]

That's another
hit to the budget.

And, yeah, we got
the full sign off,
that was it.

You know what?
To be honest,
I wasn't even thinking

that we had to strip
all of the stucco
and then work from there.

I was thinking, it's just
gonna be a bit of the patch.

But obviously, we've got to do
what the engineer needs.

It is a shell.

We're down to the studs.

This building
is literally falling apart.

Every time
we find something new,
they need to find more money.

And I think that is
stressing them out big time.

I might just have
a little peek upstairs
and see what Kelly is up to.

The new wave coming up.

Why bother putting in,
you know,
a bulky spiral staircase

when you could
just put a ladder, right?

It's saving money.

So Adam told me about
the extra cost that came up

How are you feeling?
Before we even
talk about anything.

Uh, scared of
things like that.

The termite damage.

Yeah, yet another
unexpected fix.

You can see signs that things

were not fully done, right,
That bugs me a little bit.

That's gonna be
a lot of extra cost.

The one thing
I still want to ask you about
is that little backyard space.

-Okay.
-Out here. All righty.

You're thinking
this section here

-will be for the suite, right?
-Mm-hmm.

[Drew] It needs
to feel private,
but with a defined function.

So it feels like
added square footage
for your tenants.

With all the overages,
we want to keep costs down.

And are you
still gonna have enough

to clean this up
and make this
look presentable?

Truthfully, I'm not gonna
have a lot of money.

What's the dream?

I think the dream for me
would be to have
pavers or flagstone

or something
on the ground here,

where you can
have a nice table

or even like
a little fire pit.

We have the outside space
on the deck,

but this would just
be an additional space.

[Drew] I mean, we could,
if we're really trying
to be cost conscious,

we could find
a really good price
on some pavers,

or do some sort of brick lay
and then great.

We don't really
have much budget for it.

[upbeat music playing]

I do have a bunch
of updates to give you.

Let's start with
the bottom floor.

We got all roughs in.
All rough inspections passed.

Please chime in
if you want to add
any more recess lights.

We have four in the main area,
and then we just have

another 3, 2 in the kitchen,
one light above the sink.

Because there's
limited windows down here,

-definitely more light.
-Definitely more light.

So some updates.

Pocket frames are in.

We're ready for drywall.

We got your plywood on.

-[Kristie] Yes. Thank you.
-[Adam] Thank you
for approving that.

Because it feels
a lot better in here.

A lot better.

[Kristie] It's a
really old house.

So I guess there's always
gonna be unexpected costs.

[Tom] There's
a little pressure
to get all this right

Finding any more
surprises in there
is something I worry about.

Yeah.

[Jonathan]Like a lot of first time
investors, Kristie and Tom

are using their life savings
for this ADU.

So they are overwhelmed
by the uncertainty
of it all, and they should be.

There are so many
failures in real estate
for every one winner.

When it comes to people
who don't really know
what they're doing.

But that's the challenge.
You get a lot of investors
who will come in

and this is 10 years
of their life savings

that they're
putting into a project.

You can't screw that up.

[pensive music playing]

-Hello?
-[Kelly] Hey,
Jonathan, it's Kelly.

Hey, what's happening?

So here's the deal.
I'm actually heading over
to Kristie and Tom's.

I'm gonna have them make
some design decisions.

But honestly,
I'm a little bit concerned

that they're making choices
kind of based on if they were

living there versus renters
because they have
discussed before

about how they were
thinking of moving in.

They need to make this
as appealing
as possible to all renters,

so it's not about
what they want.

A decade down the road
when they may move
into this ADU.

They need to
think about right now
what renters would want.

So I would definitely
make sure
your voice is heard

because you'll steer them
in the right direction.

Okay. So the other thing
that I'm also concerned about

is the storage upstairs,
the bedroom.

Kristie and Tom
are like almost
completely out of money

with all these extra costs.

Why don't you do this?

If you talk with them,
figure out what you think

the best storage solution
would be.

And then Drew and I
will cover the bill.

We'll add that to our backing.

Perfect. I'll talk them
through all the options
and we'll keep moving.

-Sounds good.
-Have fun.

-Talk to you soon. Bye.-Okay. See ya.

Right now, we're at the time
where we have drywall up.

We're starting to paint.

Kristie and Tom
need to pick out
their tile choices,

their colors,
wallpaper choices.

I just need to get everybody
to give me their
little check marks,

and then I can
just plow through it.

What were you guys
talking about?

Color choice.

Oh! I love additional colors.

I know you do.

Can we keep it red?

Based on everything else
that I'm thinking?

I think that black
would be your best choice.

If you're doing a rental,
you don't want to make it
too specific with color,

because ultimately
your renters may not like it.

Okay. We have some wallpaper.

-Mm-hmm.
-It's the one place
and the only place

that we'll bring in color.

Because I want everything else
in the main spaces to
seem semi neutral.

So I love the colors.

Are we doing it
for this whole space?

[Kelly] Almost every wall.

If we're thinking of doing
this entire space in it,

I feel a little bit
claustrophobic.

[Kelly] Okay,
another option. That's fair.

So what about
doing the wallpaper
on the top half then?

And then we can
take this green
and put tongue and groove

on the bottom half.

[Kristie] I really like that.

[Kelly] This space here
is where we're gonna
have the closet.

-[Kristie] Okay.
-We originally
talked about this space.

We were talking about
giving you guys like

a big box store closet system.

That maybe we could
try and frame out

to make it look like
it was a built-in.

I had
a change of heart yesterday,

and I decided
that I would prefer

to build you a custom closet.

It could be
completely built-in,

and also because we had
to put our split unit here,

our air conditioner,
now we can even if we
wanted to build something

that was almost like a dresser
lower on this side.

There's not
a lot of space to store things

and making sure
that it feels like there is

I think what increases
the value to whoever's
renting it.

[Kelly] The price,
$6500 for custom.

But I've already
talked to the brothers.

They've already
agreed to pay for it.

Would you guys
be open to that?

Absolutely. [laughs]

Okay. All right.

[Jonathan] One of our
landscape experts,
Jake is available,

and he's actually over
at Kristie and Tom's right now

with his crew.

This is a little bit
more backing than
we had initially planned.

We were hoping
that Kristie and Tom

might have been
able to take on

some of the yard work
themselves.

That didn't pan out.

But if you really
want to be able
to attract great tenants

and keep them there,
a backyard is important.

-Hey, hey!
-Hey!

Tell me what's
happening out here.

What we have is
kind of an outer area

for grass, trees, play area,
whatever you want to do.

And then right here
in the middle,

we have it boxed out
for a seating area.

The big thing for us is,
ideally wanted an
outdoor dining area.

Because of the size
of the space,

it doesn't allow you
to have a dining room inside.

That dedicated outside space
gives you that outdoor dining.

[Jonathan] What's
the path going to be?

It's a DG base with pavers
placed in the middle of it,

so you have
a hard surface to walk on.

-Okay.
-You know,
if it's a little rainy,

you know, you can
stay on the concrete.

You have to
worry about getting muddy.

It'll lead you
from the front yard

and bring you all the way
back to the seating area.

And what do you guys see
this the ground cover being?

I was thinking
decomposed granite.

We could possibly
put garden boxes back in.

My opinion,
and I would just
do this all as grass.

Because DG costs about
2 bucks a square foot
more than grass to do,

and grass would look nicer
than a a giant DG area.

[Kristie] I kind of like
the idea of the grass.

I think I'm on board.

I am noticing
you've got standing water.

Yeah, because the problem
is this whole lot it slopes

where you don't
want it to slope.

It slopes toward
the structure here

and toward
the house at the back.

[Tom] Yeah. This has been
an issue with rains before.

[Jonathan] Well, Jake
will take care of it now,

but it was a mistake
to have left it.

You should have
fixed it yourselves

the the first time you saw it.

Do you mind
if we take a peek inside?

I'd love to
snoop around there.

We'll take
the advice on the grass

because your advice
on keeping the stairs

was absolutely the right move.

Boom! Put it right there.

Why was that the right move?

[Kristie]
For multiple reasons.

One, once we see
the spiral staircase,

we're like, "You could never
get anything big upstairs."

[coughs] I told you so.

Ahem. Excuse me.
Something in my throat.

-I'm good. All right.
-The second reason is,

this kitchen
is significantly bigger

than it would have been
had we lost that space

and lost the stairs to where
we were originally gonna

put the washer and dryer.

Yeah. This is
a great looking kitchen.

It's really well laid out.

-Yeah.
-Anybody would be really
excited to rent this space.

[upbeat music playing]

[Drew] We can't risk
having any delays
with Kristie and Tom's ADU.

They need to start getting
some income rolling in.

And Jonathan and I
can't afford any more time.

We are stretched really thin.

[country music playing]

[Jonathan] Every week
we keep our trades here,

it's gonna be like
another 6 grand
out of our pockets.

And the thing is, with
Tom and Kristie's property,

it's going to be
a success in the end.

It's a great location.

They're gonna rent it.
They're gonna do very well.

For them it's a win.

I feel like for us as mentors,
maybe not so much.

They're sweet. They're kind.
They're team players.

The only thing missing
from this project

is they're not gonna be
lifelong real estate
investors.

For me, backing people,
I'd love to see.

our knowledge
and our expertise

going to somebody
who's going to take that

and then just run with it
and do so many properties.

That is more satisfying
for me as a mentor.

[upbeat music playing]

If we're gonna get them
the best possible rent,

then we need to
show these spaces
the best possible way.

And that's what's staging.

But we're putting this place
on the market tomorrow,

which is when
our crew is moving on
to the next project.

Time has run out

[upbeat music playing]

It's one thing
when a renovation
project is done.

It's a whole other thing
when it's staged.

-Yeah.
-Take a deep breath.
See your new space.

This is it.

-Oh, my God!
-Whoa!

[Jonathan]
Take a deep breath.

-See your new space.
-[Drew] This is it.

-Oh, my God!
-Whoa!

-[Kristie] Wow.
It's beautiful.
-[Tom] Yeah.

[Kristie] I cannot believe
how much fits in here.

Yeah, I know, right?

[Kristie] I would
never have envisioned

that we could
have a room like this

-or a kitchen this size.
-Yeah.

This sink is fantastic.

Like, so many sinks have,
like, that cutoff thing
in the center.

It's not even functional.

[Jonathan] I'm a fan
of a single basin.
A nice, big, nice, deep sink.

And I think a lot of renters
will feel the same way.

[Drew] When
somebody has an ADU,

just because
it's a smaller home,

you don't want it to feel
like it's non-functioning.

This is extremely functional.

We decided to move
that laundry upstairs.

This is so much better
for your kitchen now.

Your fridge isn't over here.

It's tucked over here.

Most ADUs don't have
this level of functionality.

Renters are gonna
jump at this place.

The spiral staircase,

not only is it functional
to get upstairs,
but it also looks really cool.

[Kristie] It looks
architectural.

It's art as part of the room.

And I really appreciate
how much color

you all brought in here
because that was
one of my things,

I really love color.

And not just color in here.

Did you peek in your bathroom?

-Oh, no.
-Yeah. Look at
the color in here.

Oh, this is fantastic!

-[Tom] Oh, yeah.
-This is another thing
that feels bigger

than I would have thought.

Because we removed the shower
and I thought this was gonna

feel like a tiny half bath,
but it doesn't feel squished.

It feels like
a good amount of space.

This is not just a tiny
ADU living space.

This is an actual
real home living space.

The way it's configured,
the way it's laid out,

it's so comfortable.

[Kristie] The staging really
shows off the space fall.

When I look at the rentals
in the area,

it looks better than
the other ones
that are staged.

I know you're not
doing furnished rental.

People will bring
their own furnishings.

But all this is meant to do
is paint the picture

for what people
could have in their space.

It looks stunning,
and I think that we're going

to be able to
get top dollar for it.

Once we get runners in,
I think we're going to
enjoy that for a little while.

And then eventually
move back here

and rent out the front house.
when we're traveling more.

Wow. This feels
like a lot of space.

A lot of space
and a lot of storage.

Yes. Look at these drawers.

We decided
at the end of the day,

nothing was
going to fit better

than custom,
so we just donated
a little gift to you guys.

[Kristie] Thank you so much!

It looks like
it's always been here.

I mean,
I think it's a key element
to really helping us get

the top dollar
for this rental.

[Jonathan] And even
moving your laundry upstairs.

How great is this
having laundry so easily
located to the bedrooms?

[Kristie] I mean, it makes
so much more sense

that it almost
feels embarrassing
that we didn't consider it.

[all laughing]

You've got the large stairs
that you ended up keeping
off the back here.

So if you ever do
have to move furniture

in or out or who knows,
access is just
in the backyard.

It's nice to have
that direct staircase,

But also it's nice
to have a staircase

directly to that
beautiful outdoor area.

You've got the table,
you've got a great setup.

If somebody wants to
have a meal outside

and the fact
that it's fully connected

to all the grass area.

I'm glad we changed it
to more grass all around.

-Yeah.
-With a backyard like this,

you can charge
hundreds more in rent.

You'll keep
your tenants longer
and attract families.

Oh, wow, this is stunning!

[Jonathan] The best place
in the whole property.

This is incredible.

If you have a tenant
and you're trying to
paint the picture

of how they have
this private oasis.

It's comfortable,
it's functional
for the family.

Oh, man. Renters
will pay a lot to have this.

[Jonathan] That deck
adds value to
the whole listing.

[Drew] You know,
there's so many ways
to be able to back you

to keep you on budget.

Bringing a designer in
to work with you.

Oh. Kelly was amazing.

-[Tom] She was.
-Couldn't be more grateful
for getting to work with her.

[Jonathan]Your starting budget
was $350,000,

and you were hit
with change orders

for all the surprises
inside the walls.

The value of our backing
is just shy of $80,000.

So all in,
the value of this renovation
is close to 500 grand.

[Drew] You could easily
rent this for 4250 a month.

Which means you could
pull in 51,000 a year.

That's a heck of a good return
for a rental.

That is far, honestly,
far better than
I was expecting.

To get 51,000 a year.

-That's huge.
-Yeah, it's really good.

[Jonathan] You could literally
rent this right away.

It shows nicer
than anything else
in the area.

-[Drew] Yeah.
-And you guys are gonna
reap all the benefits.

-Thank you so much.
-[Tom] Yeah.

Taking the plunge,
doing this,
I know it's scary.

It's so much stress,
a lot to take on.

But you are
setting yourself up

to be in
so much better position.

We're gonna be
able to go on more trips.

Outdoor adventures like...
Yeah, that's going
to really help us.

You want to travel,
you want to do all
the things you love.

And now this
gives you the financial
freedom to actually do that.

Absolutely.

[upbeat music playing]

Even though
I don't think Kristie and Tom

are gonna be
lifelong investors,

they have had so much interest
in their ADU,

and they've added
over 600 grand to
the value of their property.

And then down the road,
when they do move into the ADU

and rent out the main house,
that picture just gets
a whole lot better.