All language subtitles for Backed.by.the.Bros.S01E04.1080p.WEB.h264-EDITH_English [English] (SUBRIP)

[narrator] Last time on
Backed By The Bros...

-Hi!
-Hi!

[Drew] Heidi has no experience
with commercial property,

but she has
a lot of value here.

I need to
get out of the building.

If we can sell this by
a residential rental income...

[Drew] The most valuable thing
is getting everything out

so the building
can actually sell.

I want to keep
this and this.

I don't want to be here,
but I don't know
how to get out.

I can see that
you're overwhelmed.

Yeah. Who do you trust?

[Drew] Nothing is going to
cost you more money

than this sitting unsold
for another year.

Finally.

[Drew] Everything she has
is banking on this property.

I'm trying to figure out

for the
North Hollywood project.

So we're doing
a slab for the backsplash.

I'll take that
all the way up.

And then, I guess
we'll probably bookmark.

[cell phone ringing]

-Do we...
-It's Heidi.

Hey, how you doing, Heidi?

-[Heidi] Hi!
-Hello!

[Heidi speaking on phone]

-Yes!
-Yes!

Congratulations.

That's fantastic.

[Drew] As a part
of our backing,

we helped Heidi sell her late
husband's commercial building.

Now she wants us to help her
put that money
into a residential property.

And this is gonna be
her only source of income.

[Heidi speaking on phone]

You're literally $500
off of your asking price?

-[laughs]
-Oh. A $500 bargain.

All right.
Well, I guess it worked.

But that means,
so you have 45 days

with your 10-31 exchange
to identify property.

So we need to get moving.

Here in California,

If you owe capital gains
on an investment property
that you sell,

you can find a replacement
investment property
within 45 days,

and then you can defer
that tax to the future.

Which means
in Heidi's situation,

she would save about $100,000.

And that goes
a long way in real estate.

-Yeah, The clock starts now.
-Now.

We need to get you
in front of some new houses.

And you're looking
for something, you know,

2, 3, 4 bedrooms,
something like that.

[Heidi] Yeah.

How much cash do you have
on top of the million?

Just so I know
the total amount
you're working with.

[Heidi speaking on phone]

So I'll pull together
some houses for us to look at.

-All right. Breathe.
-Yeah.

-Breathe.
-[exhales deeply]

Remember how worried you were
because you'd spent two years

to get that commercial space
ready to sell.

-I know.
-You can't get caught up
on the small details.

You need to
look at the big investment.

Yeah.

-All right we'll see you soon.
-Take care!

Bye.

Bye.

[Drew] Why are
we backing investors?
Why continue to back Heidi?

I want to make sure
that We're focusing our energy

on helping somebody
who one, needs it,

but two, is going to
take advantage of it.

And that's Heidi.
All of the profit is hers,

but we want to walk away
with something, too.

If her investment fails,
even with our backing,

that's bad for Heidi,
bad for us.

It's bad for our reputation.

[upbeat music playing]

You know,
property is expensive,
so it's a matter of finding

something that's either
move-in-ready investment

or just needs
a little bit of a cleanup

or something that might
need a bit more work.

I'm good for either way.

So I've lined up
a couple of houses
for you to see.

But not just a good property
that you would want to live in

because this is meant to be
an investment property, right?

[Heidi] Yeah, that's pressure!

[Drew] In order to
avoid paying
capital gains tax,

we need to move quickly
and get her into
the right investment.

Heidi's putting it
all on the line.

The money from the warehouse,
plus all her life savings.

So finding
the right rental property

is her one shot
at setting herself up
with a steady income.

So I'm looking for the house
in the Burbank area.

The area
has all the studios around it.

So the area has the jobs.

Then the people
who are able to pay the rent.

A three bedroom
single family home,

extra storage
and a big backyard

and able to rent out of fast.

-This is the one!
-Okay.

[Drew] Burbank's
a great choice for investors.

There's high demand
and the rents
are very healthy.

This House has options
because it's got
some good size.

Yeah? I'm excited.

-[Drew]
The curb appeal is here.
-Yeah.

[Drew] Great first impression
for prospective tenants.

It's over 1600 square feet
and it's sitting
on a huge lot.

Has two bedrooms,
two bathrooms.

It's listed at 1.19 million,

which is actually
really close
to Heidi's max budget.

Ah!

[Drew] They've renovated
the house. They've put in
a luxury vinyl flooring.

-So it's nice and durable
for tenants.
-Yeah.

-[Drew] They've done
baseboards, painting, so...
-I like that.

Yeah.

-So one bedroom here.
-Okay.

You have
the bathroom here now.

-They've kept
the original tub.
-Yeah.

-There are a lot of elements
that are not new.
-Yeah.

-The term a little bit
is "a lipstick on a pig."
-[Heidi laughs]

Because you're
not changing a lot,

-but you're making it look
prettier, as is.
-Yeah.

-Yeah. Yeah.
-And that's what
they've done here.

For a renter, It's okay.

It's very, very livable
for what they have here.

Yeah. I mean,
this is what I like.

-A really big living area.
-Yeah. I like this one.

-This is a dining area.
-Yeah!

No, I like that.

-The kitchen?
-Oh!

Yeah! It's all new.

-It's a good sized kitchen.
-Not 100% perfect,
but I do like it.

I think any tenant
that comes into this house

will look at this and say,
"This is totally fine."

And the big issue with this
only being a two-bedroom...

-Yeah.
-...I feel the garage
can fix that.

Ooh! You have a solution.

[Drew] This could become some
bonus square footage
for the house.

It could be like
a lounging area or office.

You should always be looking
for what you can do
to add value.

Are there renovations
that you can do

to boost
the rental opportunity?

Are there unused
or underutilized spaces

that you can turn
into moneymakers?

So option number 2,
we can make this
a legal bedroom.

So now
this is a three bedroom,
two bathroom home.

-Okay.
-Which makes our rental
opportunity even better.

-Yeah
-If you get a property,
we do a little cleanup to it

and we maximize the value
and we rent it out
within a month.

-I think that's ideal.
-Uh.

I do have a little concern.

The house
is only two bedrooms,

You know,
I'm concerned about that.

If people are thinking,
you know,

enough room for them?

Look at this yard.

-Wow!
-What's your first impression?

[Heidi] I like it. It's big!

[Drew] That's what
renters will think, too.

This is great.

I like that you have
a dining area here.

You can have
a lounging space over there.

-That's true.
-So, say we did
close in the garage,

and we added
livable square footage
but not a bedroom...

-Yeah.
-...we could probably
get $4000 a month.

-Uh-huh.
-But if that was
an extra bedroom,

You could probably
rent this out
for 42-4500, at least.

Yeah, that's nice.

Now, in this area,
you're allowed
two additional units.

-So down the road...
-Yeah.

...you could look at
doing two smaller ADUs
back here

when you have
a bit more money to work with.

And then once those
are rented out,

now you have two more
additional rentals

-on this property.
-I see.

I think most families look
at least three bedrooms.

So if we can find
a three bedroom already there,
that would be great.

We can look
at more properties.

But the thing is,
we always have to look two.

A lot of the three bedrooms
we're seeing
are a lot more expensive.

And we only have
a very limited amount of time
to roll that money

over into another investment
without a penalty.

That's true.
That's true. Okay.

[Drew] I understand
that this is emotional for her

and she needs to
move at her pace.

But she took two years
to sell her warehouse

and doesn't have
that kind of time here.

If she doesn't
move fast enough,
Heidi will lose $100,000

in capital gains taxes
on the million dollars

she got from
selling the warehouse.

That is a ton of money
that I'm hoping

she can use to buy
into a better investment.

[Drew] It's been over
two weeks since Heidi sold her
commercial property,

which means
she only has a month left

until she has to pay taxes
on that commercial sale.

Time isn't really
on her side right now.

She's insisting
on a 3-bedroom home.

So I found one
with huge potential.

It needs work,
but it is priced to sell.

Heidi is going from a property

that was a commercial
investment for her husband,

that was a money pit for her,
and she's trying to

turn it into something
that will be her livelihood.

This is going to be
a long term investment.

We need to make sure
the R.O.I is right.

[Heidi] A little
older house though, right?

[Drew] Yeah. This
was built in 1929, 3-bedroom,
2-bath home.

It's 1900 square feet
on a 6700-square-foot lot.

So you have 1.3 million
to work with.

-That's true.
-This is listed for 1.15.

So that would only
leave you 150,000

-if you bought this
for a list price
-To remodel.

-To remodel.
-Yeah.

And with
the right rental plan,

this place
could be a gold mine.

-Yeah.
-As soon you walk in,
you can see the character.

[Heidi] Yeah,
I like the fireplace.

I love that one.

You got the faux beams
up here.

I mean, it's a cute home,
but It's tired.

You can see they've been doing
a little bit of work.

I see. Definitely the floor.

Paint will go
a long way in this house.

New window coverings
and floors.

We don't have to use
the expensive materials.

-No, you don't.
But you want durable, right?
-Yeah.

So you want to make sure,
like a luxury vinyl
or something in here

-that's gonna last.
-I see.

But the rental
always loves a new kitchen,
you know?

-You know, the kitchen
is like a centerpiece.
-Yeah.

Well, look at this kitchen.

-This is not a centerpiece.
-Uh-huh

-This is their dining area.
-Okay.

-This is
a kitchen, eating area.
-Interesting.

And then this is the kitchen.

What would you do
with a kitchen in it
like this?

You have
all the square footage here

for the dining,
kitchen in here.

[Heidi] I don't know
I think just clean it.

It's a rental.
So I'm not living here,
so just clean it.

[Drew] Heidi is slowly coming
around to the realization that
this is a rental.

It's an investment property.
It's not her own
personal home.

If you're wanting to do
a cheap renovation

like keep these countertops,
these cabinets,

you're never gonna
get a better return.

That'll turn renters off.

-You have to have more quality
with your products than this.
-Okay.

-So this has to go.
-Yeah,
in this neighborhood, too,

you want to
get a premium rent,

but if you put in
super cheap materials,

-you're never gonna
get a premium rent.
-Yeah.

[Drew] Even with our backing,
you're looking at
a 4 or 5-month reno.

But if we did it right,
this would be
a solid investment.

-Let's head to the back.
-Yeah.

For the entire
back of the house
to have this hidden storage--

-Storage, yeah.
-...is a dream for renters.

-Yes.
-It accesses
one of the bedrooms.

-Wow.
-You have another one

about the same size over here.

-Yeah.
-And then let's head upstairs.

[Heidi] Yeah, interesting.

-Take a look at this.
-But I like the ceiling.

-Oh. This is like a stage!
Yes! [laughs]
-Exactly.

They put the second level on
so that you had a really
big main bedroom suite.

-Yeah!
-They've done
a ton of unique work,

like, even the rail.
Like this looks like
it's out of a medieval castle.

-[Heidi laughs]
-But that bathroom
needs a full redo.

There's nothing in the house
that can be kept

in the sense that
all the appliances,

all the kitchen cabinets,
all the bathroom toilets,
tub, sink,

everything
has to be replaced.

-Yes
-That just adds up.

-Oh!
-So, your backyard.

The backyard is not as big.

Yeah, it's not huge,
but I think for a renter,

this is more
than enough space.

I like this property.

-I really do.
-I do. I do.

A very unique house.

[Drew] I'm not her agent.
Heidi has one,

but as a part of our backing,
I am her mentor.

And my role is to advise her
on what would make
a good investment.

But she has to make
the final decision.

So this one.

-1900 square feet.
-Uh-huh.

-Yeah.
-Three bedrooms,
two bathrooms.

So it already has
the size that you want.

They're asking 1,150,000

and this renovation
is probably gonna cost
at least 300 grand.

If we make this
a really nice three bedroom,
two bathroom house...

-Yeah.
-...we'll probably
be able to pull in

60,000 to 66,000 a year.

I see.

If you look at that
first house that we saw

that had
the really big backyard.

-Yeah.
-It's a two bedroom,

but it's over
1600 square feet,

so you actually
have the opportunity

to convert one of those spaces
into a third bedroom.

But as a three bedroom,
you can probably
get up to 42-4500, at least.

-Okay.
-That place
is listed for 1,190,000.

-Yeah.
-I think we can
lock that in at list price.

You'll have the budget
to renovate the house,
that's there,

but down the road
you'll be able
to put in two additional ADUs.

So the future potential
is even bigger.

Wow. Okay, so that's
a lot of it to absorb.

-Yeah. The houses
have pros and cons.
-Mm-hmm.

Which house do you think
is the best one to go for?

This is the biggest investment
in my life, ever!

I'm thinking more
like an investor now.

Kind of tough decision.

Let me think for a minute.

This is $1.3 million

is the one chance to invest
for my future, for my life.

I do have
a good feeling towards...

And the house
with a big backyard,

-Okay.
-The house
is already renovated.

You can convert the garage
to additional living space,

and we can
add a third bedroom.

It has a big backyard,
which is also good.

Yeah. I think I want
to make off on that one.

Okay. Good luck.

It's sunk in for Heidi.

She's made her decision,
and I personally think
she's made the right one.

And she's starting to think
more about the numbers
as an investor.

My suggestion is,
if you want to
make an offer on that,

let's go in right away
at list price

and say
we will buy it for list,
it's a cash offer,

and I think
you could lock that up.

-Let's do this.
-[laughs gleefully]

All right, shall we?
This is good.

-I'm excited for you.
-Yeah?

I think there's a lot
working in our favor.

It's a cash offer,
and we can move fast.

Fingers crossed, she gets it.

[dramatic string
music playing]

Hey, Heidi. How are you?

[Heidi on phone]
Good! I have good news!

What is it?

I got the house!

You did?

I got it for 1.199

Oh, right on.
Congratulations.

Wait. So it's a firm deal?

Absolutely firm deal?

Absolutely firm deal!

I'm giving you
a virtual fist bump.

-Yeah!
-Well, done.

[Drew] This is a great value
for this neighborhood.

I love that she got this place
in less than 45 days

because now, instead of paying
$100,000 in tax
on her husband's warehouse,

she can put that money
into the renovation
for this place.

Oh, my Gosh.
I'm super excited for you.

Doesn't that
give you some relief?

Knowing that
you have somewhere
to park that investment?

Oh, totally.
Thank you so much
for helping me.

You know,
look for all those houses.

Well, hey,
the work isn't done yet.

We still have
a lot of work to do.

So I'll meet you
over at the house
in a couple of days

and we can start talking
through some stuff.

-All right?
-Yeah. Very excited!

-Awesome. Okay, Bye.
-Yeah.

I just want to
get over there with Jonathan

and start to
figure out the plan.

How can we maximize the space?

Get her the top rent possible.

And get a tenant in here.

-[Jonathan on phone] Hello.
-Hey, how you doing?

I got a few things
I want to go over
with Heidi's property.

-Okay.
-She got the property.

Amazing.
What did she go with?

That was the one
that was listed at 1.19.

So it's got two bedrooms.

It's the one
that's a larger home
with a good sized yard.

So what does that leave us
for renovation?

And what kind of work
does it need?

She wants us to
keep up to $70,000
for the reno,

including the back yard.

And this is the one
where we were thinking,

if we do convert that garage,
that's the main point.

And then clean up
the backyard to make it
a bit more appealing.

[Jonathan] Right.
Well, I would say

if we could get Liron
over there to start right away
it might be good.

Maybe we can get Li
on the design side
to work with Heidi

because that garage
is gonna take some work
to really optimize the space.

-Right.
-And the backyard
needs a ton of work.

So if we want to put Jake
on this project, I think
that could be great, too,

because he knows
how to work on a budget.

Okay. Okay, Okay. All right.
Sounds good.

Well, tell her
congratulations.
That's amazing.

It's going to be
a great property if we
can stick to our budget.

Exactly.

[classical string
music playing]

[Drew] We've got to get
the ball rolling on Heidi's
new Burbank property.

The inside is in great shape,

but there's a lot of work
to be done outside.

So we're bringing in Jake.

-Look at this backyard.
-[Heidi] Yeah, look!

Wow. Coming into a project,

what I really want to focus on

is the most cost effective way
to make this very usable,

very open to where any renter
that's gonna come out

is gonna be interested in it.

Jake is a landscape contractor
we've used for
a very long time.

He's great. And we have
a yard like this
that's actually pretty big,

you could spend a lot of money
planting lot of different
things out there

that could just
waste your budget.

We don't want that.

One thing to keep in mind,
the plan down
the road for Heidi

is probably to add some
additional units back here.

So we probably
don't want to do
too much work back there then.

Exactly. We don't want
to spend a lot of money.

So if we can find a way
just to define the backyard

a little bit, I think,
is the main thing.

[Jake] You probably
want to stick with plants
that produce usable spices.

-[Heidi] Yeah!
-Easy to take care of.

-Yeah!
-Low maintenance.

-You're talking her language.
-[all laughing]

That's right.
Look, avacado there.

-Again, remember,
it's a rental property.
-Yeah

Renters don't always have
the same passion
for maintaining.

No. As a landlord,

I'm claiming
to pick the avacado.

Do you think that your tenants
want you showing up
every week?

-Yeah. I give them
a 24-hour notice.
-[laughs]

Every single week?

Uh-huh!
I want a fruit tree.

I want which is edible.

I share with them.

-Actually, here's a question.
-[Jake] Yeah.

What about for the grass?
Because this is a lot of lawn.

-[Heidi] Yeah.
-Would you
consider doing turf,

or would you want to stick
with natural grass?

Okay, what do
most of the people do?
[laughs]

So for a cost
effective purposes,

even including the irrigation,

and maintenance for,
I'd say at least 10 years,

you come out ahead with sod...

-Oh. Okay.
-...versus turf.

If someone came back here
and this was
very nicely manicured,

we don't have to spend a lot,
but it looks like
an appealing destination.

I think that will
add more value.

You'll get more rental.

-You could
just have a nice zone.
-Lounge area.

But, yeah,
I think this will be easy.

-Create an outdoor eating area
up on the deck.
-[Heidi] Yeah.

But I would focus on
finding something

that can create an area
to draw the eye on either

the back wall,
or the side wall.

Because when
you walk out these doors,

the first thing
you see is this.

-Yeah.
-Yeah.

It would be nice to have
a border of plants all around
the whole yard.

-Yeah.
-[Jake] That's exactly
what I would suggest.

Some, some bigger trees.

What kind of tree
you have in your mind?

So ficus is the most common.

It grows really fast
and really full.

-But is it edible?
-You cannot eat it.

And do they have flowers?

They do not flower.

Okay. Let's get
one thing straight, guys.

We only want two things.

Either get edible
or they flower.

I want to just put
a warning out here.

You said you're
willing to listen to us.

But there are
some things we're saying

that I feel it's kind of
going in one ear
and right at the other.

You keep talking
about this as a property
you're living in.

My tenants will think
the same way I think.

That is one of the biggest
mistakes that a landlord
will think.

"My tenant's going to
take care of this property
the way I would."

No. Big mistake.

Why don't we steal you, Heidi,
and go inside?

Because we should
discuss the garage
and our plans...

-Okay.
-Thanks.

-See you later.
-Thank you. See you.

You keep saying you're looking
for the opportunity

to have potentially
another bedroom.

-Yes.
-Well, It would be pretty
costly in the central area

to kind of figure, you know,
changing wall locations.

But the garage,
you could probably
convert that.

-Yeah.
-That already
has tons of space.

Okay. To have
a space that appeals

to the largest group
of renters that you want,

I think having
an extra bedroom
is going to be very valuable.

-Okay. Then let's do that.
-Yeah.

This is a blank slate.

-I like this too,
because again, limited budget.
-Uh-huh.

And if we were trying
to move any walls within

or close things off
for a third bedroom,
there's gonna be beam work,

there's gonna be
a lot of hassle.

-Here, there's no
beam work or anything.
-Oh, I see.

It's just framing in
what you want.

If we were converting
a garage into a full ADU,
that's expensive.

Imagine converting this
all of a sudden
into a three-bedroom home,

and you didn't pay
that expensive price

-of all the three bedroom
homes out there.
-Yeah!

You've created a space
that's actually gonna start
putting money in your pocket.

Wow.

If we turn this garage
into a third bedroom

and closing the garage door,
you've got room for a closet.

-Yeah.
-We could even fill
in the laundry properly.

-Oh, that's cool.
-You'd have a large bed
and a desk.

There's even enough space
for a recliner.

-Yes!
-You don't need the garage
because you've got a driveway.

-So you have
off-street parking.
-Yeah.

I feel like this would be
a pretty simple
transformation.

Hey, can we do a closet?

And the bed is a pull down?

Uh. We could do a Murphy bed.

-Yeah.
-Keep in mind, depending
on the type of Murphy bed,

you could be spending
$10,000, $20,000.

-Ooh.
-You need to take yourself
out of "I'm a homeowner.

I know what I like"
and put yourself
in the business mindset.

You need to make sure
you can get the best rent

and offer the most
valuable product to people

without spending
money on things,

you don't have to
spend money on.

I see.

Liron is going to be the one
who guides you through
this whole process.

-Okay.
-I actually think you could
have tenants in here

within a month.

So, a month,
I can collect the money?

Exactly. Start
pulling that money in.

-Well, at least start
showing the place.
-[laughs gleefully]

When you have
the square footage
we have in this house,

plus a nice big backyard,
plus, we're turning this
old dirty garage

into what feels like
livable square footage,

I'm excited.

Can we make that
a legal bedroom?

Get that square footage
as a part of the home?

We'd have to find
that out pretty quick.

These are all value adds
that move the needle

of a two-bedroom
closer to a three-bedroom.

Let me just
save you some money

and get this place
cleared out.

[Heidi exclaims]

-One, two, three.
-[Heidi exclaims]

[Heidi] This property
is so important to me
on many levels.

When my husband passed away,
I was thinking, "How I'm going
to retire?", right?"

He always, always
talk about land,
that's so important.

So I get it.

-[chainsaw whirring]
-This rental property
have a big backyard,

a big land.

Financially, it would be
very good for me too

because with the warehouse,
I have a zero income.

This one, I think,
is going to generate

the income
to provide my retirement.

[cell phone ringing]

[grunts softly]

-Hello? Oh.
-Hi.

Hold on. I'm on--
I'm atop a ladder.

Remember the project
that we have over in Venice?

I'm looking for
the light covers. They're--

No, I, I took those home.

I'm using them
at my house. [laughs]

Okay. Well, in the meantime,
I think we're gonna
have a problem.

Wait. Is it about
the permit for the garage?

[sighs] We're not
going to be able

to turn around proper approval
with Burbank in time

to make it
a full bedroom conversion.

It'll take months.

What's the minimum?

Are you thinking
it's gonna be like two months?

Because that could be doable.

Well, there's no way
of knowing.

Like, look how many
these projects now
that we're doing

that are three months,
four months.

So, here's... My question then
is if we were just to make
that a flex space,

we just have it
as a second living space,

I think that would still
add a ton of value.

As long as Heidi is aware.

Like, it's not
legally a bedroom,

so she can't
advertise it as that.

But we'll need her
to sign off on this.

The other thing, too,
is if we're finishing it
that way,

then we still
have to legally keep it

as a garage. Like,
you could drive a vehicle
in there and park.

So we need to sort of
rethink the design of it

more than... Uh,
why don't we get
Liron over there

so that they can get
working on the flex space?

-Okay.
-The main thing
is we just want

to get this done in a month
so that we should get a tenant
in there right away.

All right, all right.
See you later. Ciao.

[upbeat music playing]

[Jonathan] Drew and I
have had success
in the real estate game,

and we want others
to find success, too.

This property is going to be
Heidi's only source of income.

So if this investment
goes wrong,
she'll lose everything

that she
and her late husband saved.

Hey, Heidi. How are you?

[Heidi speaking on phone]

I actually wanted to
have a little chat
about the garage.

I did a little digging,
and if we want to do

a legal separate
bedroom suite,
just for the permits alone,

it's gonna take
probably three,
even up to six months

if we wanted to do
a permitted third bedroom.

Wow.

I guess the whole thing is,
if you're thinking
resale value,

the resale value of a legal
three-bedroom is way better.

So if you ever did
end up going to sell,

you'd be in
a much better position.

[Jonathan] You could just
renovate that as a flex space.

It would cost the same
because the reno
isn't much different.

Somebody could use it
for whatever they want.

No. Unfortunately,
you won't make
the same amount.

[Heidi] Hmm. I see.

Ultimately, you
have to decide.

Do you want to do
the full bedroom
conversion now,

but have it unrented
for several months
while we get the permits?

Or do you wanna just do it
as a flex space
and get it rented right away?

"Flex space." Okay.

All right.
Well, decision made.

We'll start working
in that direction.

-[Heidi] Okay.
-Bye.

[upbeat funk music playing]

[machinery whirring]

[Drew] Just wanted to
talk to you about
a couple things in the garage.

-[Heidi] Yeah.
-Get your input
on some of the layout.

Okay. Today, the contractor
Liron is coming.

We want to go over the plans
for the new flex space.

And I have
lots of questions to ask him.

I know after talking
to the brothers,
we discussed the laundry.

It was two
laundry machine here...

And then
the closet over, correct?

-[Heidi] Yeah.
-Because I also had an idea

to potentially move them
to the opposite side.

-Okay.
-Over here.

I just like the idea
of having them on this side.

Because you have
more of a depth here

that will give us
a better clearance

-in terms of access over here.
-Yes.

-I see.
-I know we spoke about

having some
built-ins somewhere.

-So with the laundry machines
coming over on this side...
-Mm-hmm.

-If we kept
with the same idea...
-Yeah.

-Building out
a closet for them...
-Yeah.

-Building off of
this wall to extend...
-Ah.

-You would gain this about
36 inches, 3 feet, right?
-Yeah.

To Add maybe a built-in
on this side of the wall.

-That's right. That's right.
So, like a more if...
-More floor to ceiling maybe.

-Yeah, yeah, yeah.
That's pretty smart.
-Cabinetry.

A good contractor
is any property
investor's best asset,

and with our backing,
we come with all that
legwork already done.

Check references. Get quotes.

I mean, a good contractor,
on top of doing a good job
on the project,

they're also gonna find ways
to save you money

and make you more money
with the project.

[mellow rock music playing]

[tools whirring]

[Jonathan] I'm doing
a surprise check in
on Heidi

because I want to see
how it's going with Li.

She's one
of my best designers,
and since we can't market this

as a 3-bedroom rental,
this flex space has to grab

the renter's attention
and be functional.

The laundry room
will be here, right?

-Yeah.
-Do we put
anything on the top?

Yeah, we could, if you want.
We could do open shelves.

Would you benefit
from a 6-foot-five guy

-who can build shelving?
-[exclaiming loudly]

Doesn't that look
so much better.

-It just opened up,
cleaned up a little bit.
-Right?

What happened with actually
fully converting this over,
losing the door

versus having to
keep that kind of stuff.

-Where did we land?
-We're going to
do a custom door.

Is it this style of roll up,
or is it going to be
one that's contained

so we don't have to have
the track coming in?

-[Heidi] Yeah.
-One that rolls up
and rolls into itself

so we don't have to
have these tracks.

[Heidi speaking]

Can we just do those, uh...

-A slider?
-Yes, Slider.

Well, in reality,
the city doesn't require it
to be an automatic door.

It could be a manual door.

-We could actually
just almost do like--
-Carriage doors.

Yeah. So it looks
a lot more finished.

-Yeah.
-Just "open like this" door.

-Yeah. You just have two doors
that open out.
-[Liron] Right.

We could build
two wall panels.

Insulate them,
drywall on the inside.

-Oh!
-Maybe do like board batten
on the outside.

Fakes.

Yeah, they're just--
They're just two wall panels
that act like doors.

It would be comfortable,
and it would pass
the city sniff test

of having garage doors.
You just need to be
able to open it up.

Anything to avoid having
to have the tracks

-because you're not gonna be
using this daily...
-In favor, right?

-Yeah.
-Other than that,
what else is going on?

[Liron] Since we are using
this sort of as a flex space,

we want to have,
like an office, and storage.

So we would do some
bookshelves on this side

and then do some sort of,
you know, custom desk here.

I'm thinking to do oak.

-I thought it would work
well in this space.
-[Heidi] Hmm, yeah.

[Liron] Warm tones.

But I also want to add
some color on the bookcases
to paint the outside of them.

-[Jonathan] Okay.
-So not everything
is like wood tone.

Okay.

Yeah. I mean,
your renters are looking
at 20 different places.

What's going to
make this stand out?

How about this beautiful,
built-in desk
and the gorgeous new floors?

That's right. And
I have a fantastic door
you can open that with.

[Jonathan] This is totally
custom and might be
a little out of your budget.

-But hopefully. Yeah.
-Hopefully!

[dramatic string music]

[Jonathan] Okay.

-Yes!
-How do you like it?
[chuckles]

-It's a dirt pit.
-[laughs]

What a level dirt pit!

-Oh, my God.
-[Heidi] Do you like
the tree in the middle?

What? Why?

What happened?

-Did you tell them
not to take this?
-No! No, no, no.

[Jonathan] This should be
a big, open area
in the middle.

-Yes!
-We'll have our canopy
of green around the outside.

I will make the call on this.

-We'll get rid of it.
Level everything out.
-Okay.

The only thing
is that you said

that you allow me
to go with you
to shopping for the trees.

-I already promised.
-You promise?

-I will take you with me.
-Okay, okay.

My opinion is
for a rental property,

you want low maintenance.

Yeah, the tree doesn't
need any maintenance.

Like, an apple tree,
an orange tree,

you don't need to do anything.

What happens if you have
all the apples falling
and you don't pick them up?

I do.

You're not understanding!
Let's say...

I write in to the contract.

Say they have to allow me
to pick up the food
once a week.

Okay. I'm sorry.

-You're lovely, your tenants
don't want you around.
-Okay-

-I trust you. I trust you.
-Okay.

Yeah, because
I don't trust you.

[both laughing]

[dramatic string
music playing]

[tools whirring]

[Drew] I feel like
Heidi is putting in

the right amount of money
into this property.

She's coming in
around 70 grand

for the garage and the house
and the yard.

[Jonathan] We're backing Heidi
with our experience
just to plan the backyard.

Since she's paying
for the trees
and the plants

and everything's
going back there,

I'm gonna take her
to the nursery

and just make sure
that she doesn't go crazy
with the spend.

Because I know if she went
to the nursery on her own,

We would have an orchard full
of lemon and orange trees
back there,

and I am not going to
let that happen.

[mellow music playing]

[Heidi] I'm very excited.

We're going shopping
for the backyard fruit tree.

Fruit tree.
Fruit tree, please.

Maybe lavender.

Some of them you can see

-are already
a little bit bigger.
-Yeah.

Some of them are smaller,

-but they'll grow
quite quickly.
-I see.

I'm secretly trying to, like,
steer her in the direction
of very low maintenance

because if you spend
a bunch of money
to finish the yard,

but then you're also adding
a bunch of money
for maintenance,

that's not a good
business proposition.

So any of the ones
you see that you like,

-just throw a sticker on...
-Oh!

Let's see.
I think this is lavender. Mm!

-Ooh, the smell.
-Smells so...

-French lavender smells nice.
-O, my God!

We want more French lavender.

This is kind of
nice over here.

What is this?

Which one? Those...

Those are kind of
more like succulents.

Then we don't look at it.

I look at the plants that
smell good, taste good.

Some succulents, some grasses.

This is all
just for ground cover.

That looks nice.

-It's low maintenance.
-Are they edible?

You don't have to
eat everything in your yard.

[Heidi] This is mine.
Don't touch it.1

-Okay. So you want citrus.
-[Heidi] Yes, I do.

But look, I need a bigger--
There's only two oranges.

-So, you know.
-If you want
more than one or two,

-we might
have to go... bigger.
-What?

Normally, I would insist
on no fruit trees in a rental,

but Heidi
is not your normal investor,

so I'm willing to
give her a little slack

and let her get a couple

-This will be 1000 bucks,
installed.
-Wow!

-You're thinking
at least for our anchor trees.
-Lucky you're tall!

-All right,
throw a sticker on it.
-Okay.

After all, the journey
is about her mental wellbeing,

not just her financial.

Finding joy again after
the loss of her husband,

I think is an important part
of this process.

If that's what you want
for that, we would be
doing three of them.

Yeah, They have
a couple of them, you know?

And because
you're overspending,
you're walking back.

I'm almost done! Wait!

My whole assignment here
with this project
was to get Heidi the most rent

while making sure
she doesn't overspend

and protecting
her future income.

But she is still healing,
and this is her property.

So if a citrus tree
is gonna bring her joy,

I am happy
to give her a citrus tree.

And who knows/
Maybe we'll end up
finding a renter

who loves lemons
as much as she does.

-You have expensive tastes.
-[Heidi laughs]

[Jonathan] I can't believe
how fast things
are happening over here.

But we've got to wrap it up
and move on
to our next project.

For this two-bedroom home
to compete

with the three bedroom
listings out there,

this flex space
has to stand out.

It can't feel
like a garage at all.

The semi-custom
built-in shelving
will help elevate the space,

and those doors have to
blend in seamlessly.

These doors
are 5 inches thick,
fully insulated

still had those
beautiful windows
to let in the natural light.

I think this was
the perfect solution

to make sure we still comply
with what the city needed,

but give it that comfort
of an indoor space

In the back garden,
to give Heidi's property

a competitive edge
on the rental market,

this yard has to be inviting,
clean and low maintenance.

We have less than a week
until Heidi needs to start
showing this property.

We can't take any delays.

She literally hasn't had
any income for two years.

[mellow rock music playing]

[tools whirring]

[Drew] I'm popping over
to Heidi's house just to
check in on the progress.

I have one of our
trusted trades here.

Donnie is like our closer.

We often bring him in
to get a project
over the finish line.

He's great
with special projects
like these garage doors,

and he'll make sure
it gets done on time.

Hey, the doors do look good.

-[Heidi] Hey!
-[Donnie] Hey. Welcome.

[chuckling] How cool is this?

Look at the door.

Yeah. I mean,
they are still
legit garage doors.

But you have the insulation
and they're gonna...

It's just gonna look like
a nice wall feature.

Any questions inside here?

Well, we were just
talking about this.

And how do we want to
trim these out?

One is, do we want to
try and make it,

like, real simple as possible
and make it look like a wall?

Or do we want to embrace that

it is carriage doors,
which would be more like
a chunkier, bigger build.

It's already gonna be
appealing to a tenant.

Let's not over spend on it.

-Keep it nice and simple.
-Okay.

-And I like that we have
the luxury vinyl down there.
-Yeah.

If somebody still wanted to
drive in here and park,
they could.

You want to show a tenant
the function of a space

and how it's going to work
for their family.

-All right. Oh, wow.
-[Heidi] Yeah.

-[Drew] Look at this.
-[Heidi] Look!

[Drew] Looking good.

I mean, I do love how just
big and open this yard is.

Oh, I see
the path is going in.

So the path's gonna be
a DG pathway,
which is decomposed granite.

Everything's gonna be
on a timed watering system,

the grass as well.
So hands off.

[Drew] That way, you don't
need to rely on renters
caring for your lawn.

I love this. Keep the pace up.

[Heidi] Bye!

So many people here
and out of the house!

I saw people in the garage,

I saw people
go to the backyard,

all kinds of people.

But I'm concerned, you know,
it's a lot of money

invested in this project,
so I can't wait
for this house

to be rented out.

Imagining
I get my income back.

[Jonathan] We are headed
to Heidi's house
and this is the home stretch.

We are getting
all the finishing
touches done,

and it is looking incredible.

This is sort of
the cherry on top.

[upbeat music playing]

We're gonna include staging
as a part of our backing.

Heidi is still a novice
real estate investor,

and her financial thinking
is a bit scattered.

She doesn't see
the value in staging...

One, two, three...

So we're going to
do it for her

and show her
the difference it can make
attracting renters.

[Jonathan] It's gonna for
the highest possible rent,

and it's gonna just give her
an extra little boost

over the competition.

[Drew] I like that you have
purposeful zones

which we know
renters want to see.

[Jonathan]
Well, I hope renters agree.
We'll find out soon enough.

-[Jonathan] You ready?
After you, ma'am.
-[Heidi] I'm ready?

What? [laughs gleefully]

-Does it feel like a garage?
-No!

-Did you move
my bedroom to here?
-[brothers laugh]

Having it staged
professionally
will show renters that

this is actually
an extra living space.

This is your flex space.

-[Heidi] Yes!
-[laughs]

Oh, my God!
I think the renter can see
how they can live there.

And if they work from home,
they can do it from here.

And for the guys,
it's their man cave.

But it also couldn't be
the she-she room
for the girls, you know?

-Exactly.
-Yeah. Yeah.

The wife can use it.
The husband can use it.

The kids can use it.

I love-loved the idea.

I think the renter definitely
will love the idea too.

When you looked
at the garage before,

nobody would
look at that space

-and say, "I'm gonna give you
more money for this rental."
-[Heidi] No.

But now, this is
the ultimate flex space.

I would be comfortable
snoozing here,
watching TV, working here.

It adds so much value
and that's what you need.

If we wanted this to be
a permitted ADU,

livable square footage
added to the home,

that's a
whole different process
and a lot more expense.

Heidi didn't need that.

This is like adding
380 square feet to the house.

That is valuable
in the tenant's eyes.

And the door is so awesome!

Didn't that turn out amazing?

It's sealed, it's insulated.

You still have the light
from the windows.

You don't have to have
all that equipment
coming inside the space.

That makes it feel like
it's still a garage.

If you have the motor
and everything.

-[Heidi] Yeah.
-Yeah. Check this out!

-[laughing] This laundry, wow!
-How beautiful is that?

Oh, my God.

-It's pretty great, hey?
-Wow.

You've got that.
You've got your storage.

Storage.

Holy moly!

-Oh, the storage space!
[laughs gleefully]
-This is what tenants want.

Tenants need function.
They need more spaces.

They need storage.
They need laundry.

I'm so jealous of them.
They live better than me.

The rest of the house
was already renovated
and it looked nice.

This was the one area
that just felt like
an old rundown garage.

[Heidi] Now this has become
my favorite room
of the whole house.

This whole process,
it was really hard,
but also very unique.

I'm always thinking
my husband has sent a message

-through the sky to you guys.
-Yeah.

[Heidi] After my husband
had passed away,

for two years
I was not able to move forward

and sell the building.

[Drew] When you were
trying to get rid
of the commercial space,

you're trying to figure out
"How do I prepare to sell it?"

You know, "What do I
do with everything?"

-"What's the next chapter
in my life going to be?"
-Yeah.

You found an amazing home.

And this is going to be
a very successful chapter.

I think this was
a great investment for you.

I couldn't imagine.
So I can't
thank you guys enough.

-You're welcome.
-Welcome.

My husband would be so proud.

And he is up there
helping me all the way.

Just like the brother does.

-Check out
this incredible space.
-[whoops]

Is this nice?

[Heidi] Oh! So nice!

[mellow music playing]

I mean, imagine
somebody coming here

and seeing what
the size of table
they can fit for entertaining,

seeing a yard like this.

All this grass
is amazing for families.

[gasps] Oh! My orange!
[laughs excitedly]

Oh, my God!

Smells good,
tastes even better.

I'm so happy.

This yard is so usable now.
I can see kids playing.

-[Heidi] Yeah.
-I can see families
getting together.

I love that
everything here is edible.

-I know!
-Everything could be
used in cooking.

We've got a little more height
on the two sides of the yard
with the fruit trees.

And it smells so good
around the garden. [laughs]

The outdoor area,
I mean, people are
going to be out here...

-Yeah. Yeah.
-...Dining.

-Then they're gonna want to
come down into the yard.
-So good!

-[Heidi whooping]
-Then you bring
a glass of wine

over here and relax.

Oh, my God.
I love this sitting area!

[Drew] Is it nice?

[Heidi] You teach me
that don't cost arm and leg

to make a space
such a nice space.
Yeah, yeah

I like that we didn't have to
spend a fortune
on this renovation.

We were able to
spread the money out
to make it make sense,

add value
and get top dollar rent.

[Heidi] I want
to be the tenant!

Well, let's go over
some of the numbers

just to verify,
because if you think about it,

you were able to avoid paying
any capital gains tax.

That's a big off my shoulder.

-Yeah.
-You get this place
with pretax dollars.

And then on top of that,
we had about $41,000 of costs

that we offset bringing
in a designer,
project manager of our team,

-some materials,
-I know.

-You work day and night,
actually, they.
-Yeah.

Right there you already
have $123,000
already in this property,

-helping you save money.
-Yeah.

On top of that,
you have the increased value
of the property.

-Oh.
-Yeah. So,
the value of the home

is about $270,000 more
than it was before.

Because you added
that flex space,
you fixed up the yard.

-Oh!
-This property
is gonna be a great rental.

-Wow! Yeah.
-Rent?

Two bedroom,
two bathrooms in this area,

a cap on them are usually
around 4,300 to 4400.

But you are very unique.

-This house
has more square footage.
-Mm-hmm.

Plus, you have the big yard.

You have
the best house on the block.

In fact, you're pricing more
than a lot of three-bedrooms

-in this neighborhood.
-Wow!

-Ready for it?
-[inhales]

-$5,000 a month,
you can easily get for this.
-[gasps] Oh, my God!

[laughs gleefully]

[Jonathan]
I'm excited for Heidi.

She's getting a three-bedroom
rental value
out of a two bedroom home.

Before I met you,
I was worried.

I don't know what my
future financial was like.

I feel so relieved,
and excited for
a new chapter of my life.

Now I do feel a lot more
secure about my future.

I love hearing that.

It's always a little risky
to risk our resources,

but I really feel great
about backing Heidi,

and in fact,
even though this grew
from the original scope

of how we thought
we were helping her,

into finding another home
and fixing it up,

this is what she needed.

Knowing that our help
actually got her
to where she needs to be,

she's set up for success now.

I just love that
she has this great investment

and I think that's a pretty
special thing to be a part of.

We've only been gone
a couple of weeks,

and Heidi is already
making more than
Drew and I projected.

She discovered
that there is demand

for event space in the area.

So she's renting out
that flex space,

including the back yard
for $1000 of booking.

In fact, she's already
booked it out twice.

And then she found a tenant
for the main house

who's okay
with that arrangement

and has signed a year's lease
at $3000 a month.

So that is amazing.
Go, Heidi.