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1
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-...to meet you.
-[Drew] Pleasure.
2
00:00:02,300 --> 00:00:03,567
It's quite the project. Ahhh!This could be a money pit.
3
00:00:03,567 --> 00:00:05,367
You got to pick us.
You have to.
4
00:00:05,367 --> 00:00:07,700
You're pushing beyond
what this market will give.
5
00:00:07,700 --> 00:00:08,767
No risk. No reward.
6
00:00:08,767 --> 00:00:11,000
-I'm Sheryl.
My daughter, Jasper.
-Hi, I'm Jasper.
7
00:00:11,000 --> 00:00:12,467
[Drew] That's a
good-looking building.
8
00:00:12,467 --> 00:00:13,734
We have some issues.
9
00:00:13,734 --> 00:00:16,266
[Jonathan] How muchhave you wastedon this project so far?
10
00:00:16,266 --> 00:00:17,166
Close to $200,000.
11
00:00:17,166 --> 00:00:18,467
-Yeesh.
-200 grand.
12
00:00:18,467 --> 00:00:20,700
[Jonathan]
I'm continuing to huntfor a multi-unit building
13
00:00:20,700 --> 00:00:23,467
for one of the first investorswe backed, James and Isabel.
14
00:00:23,467 --> 00:00:26,166
I just finishedtouring James and Isabelthrough a property.
15
00:00:26,166 --> 00:00:28,734
Oh, my gosh, they're not
really listening to me.
16
00:00:29,767 --> 00:00:32,867
Massive undertaking.
Potentially massive profit.
17
00:00:32,867 --> 00:00:34,200
It smells like money.
18
00:00:34,200 --> 00:00:36,266
[Drew] We just wantto help peopleget into good investments
19
00:00:36,266 --> 00:00:38,266
or to help save them
from what's turning into
a bad investment.
20
00:00:38,266 --> 00:00:39,667
I don't know what I'm doing.
21
00:00:39,667 --> 00:00:41,700
I've never flippeda house before.
22
00:00:41,700 --> 00:00:43,867
Had you rented it outfrom the beginning,
23
00:00:43,867 --> 00:00:46,800
-you would have
made over $400,000.
-Ahhh!
24
00:00:46,800 --> 00:00:48,100
We want to back you
because we can
25
00:00:48,100 --> 00:00:50,300
really help you
get this project done.
26
00:00:50,300 --> 00:00:51,867
Thank you, guys.You have no idea.
27
00:00:51,867 --> 00:00:53,200
$100,000?
28
00:00:53,200 --> 00:00:54,266
You're freaking nuts.
29
00:00:54,266 --> 00:00:55,400
[Drew] What you'relooking at doing
30
00:00:55,400 --> 00:00:56,867
with this houseseems impossible.
31
00:00:56,867 --> 00:00:58,667
We made so
many mistakes early on.
32
00:00:58,667 --> 00:01:00,467
I wish we had a mentor
33
00:01:00,467 --> 00:01:02,567
who could tell us,
"No, no, guys, bad idea."
34
00:01:02,567 --> 00:01:04,200
[laughs] Rookie mistake.
35
00:01:04,200 --> 00:01:06,000
They're already 200 grand
in the hole.
36
00:01:06,000 --> 00:01:07,634
-Obviously, this needs
some work.
-Yeah.
37
00:01:08,767 --> 00:01:10,400
On paper, some things
can look great,
38
00:01:10,400 --> 00:01:12,700
in person,
whole different story.
39
00:01:12,700 --> 00:01:14,667
We got a problem.
You got to tell these guys
40
00:01:14,667 --> 00:01:16,367
to stop everything
right now.
41
00:01:16,367 --> 00:01:18,300
If they don't get this right,
I think they're done.
42
00:01:18,300 --> 00:01:19,233
[woman] This is life-changing.
43
00:01:19,233 --> 00:01:22,000
This is gonna turnthe page to my career.
44
00:01:22,000 --> 00:01:23,467
Who wants to make
some money?
45
00:01:33,100 --> 00:01:35,367
Why are we backing investors?What do we get out of it?
46
00:01:35,367 --> 00:01:38,000
Well, we don't make any moneyby backing these investors,
47
00:01:38,000 --> 00:01:40,667
but when they succeed,that's good for our reputation
48
00:01:40,667 --> 00:01:43,266
and that is goodfor our business.
49
00:01:43,266 --> 00:01:45,867
That's why we haveto choose wisely.
50
00:01:45,867 --> 00:01:47,900
I find it so funny
how many times we've talked
51
00:01:47,900 --> 00:01:49,700
to people about investment
that they're working on
52
00:01:49,700 --> 00:01:51,667
and they'vebought the property,they're already renovating,
53
00:01:51,667 --> 00:01:54,000
and then we askabout their designor what their plan is,
54
00:01:54,000 --> 00:01:55,767
and they don't know
that far ahead.
55
00:01:55,767 --> 00:01:57,600
They just ripped it apart
to start renovating it.
56
00:01:57,600 --> 00:01:58,467
They're like,
"Well, it's a property.
57
00:01:58,467 --> 00:02:00,100
It must be worth something
in the end."
58
00:02:00,100 --> 00:02:03,100
Nothing should be
left to guessing.
59
00:02:03,100 --> 00:02:04,767
If you know the numbers
aren't gonna work,
60
00:02:04,767 --> 00:02:06,967
you walk away
before you've
shelled anything out.
61
00:02:06,967 --> 00:02:08,066
You have tounderstand the market
62
00:02:08,066 --> 00:02:10,400
and you alwayshave to playworst case scenario.
63
00:02:10,400 --> 00:02:14,266
Anyone who planson best case scenariois going to fail.
64
00:02:14,266 --> 00:02:16,000
So it's a beautiful street.
65
00:02:16,000 --> 00:02:18,166
Our next investorsare in Valley Village.
66
00:02:18,166 --> 00:02:22,200
It's nestledbetween trendy neighborhoodslike Studio City and NoHo.
67
00:02:22,200 --> 00:02:24,600
It's known asa family-orientedneighborhood
68
00:02:24,600 --> 00:02:29,100
with upscale residences,tree lined streets,parking and privacy.
69
00:02:29,100 --> 00:02:31,567
Today we're meetingveteran investors in trouble.
70
00:02:31,567 --> 00:02:32,667
[Drew] It's a flip house.
71
00:02:32,667 --> 00:02:34,867
They're looking to makea good return off of this.
72
00:02:34,867 --> 00:02:36,266
We really want to find out
73
00:02:36,266 --> 00:02:38,200
if they're smart
with their money and if
they know what they're doing.
74
00:02:38,200 --> 00:02:39,667
Oh, my gosh, it's just--
75
00:02:39,667 --> 00:02:41,200
I didn't realize it's sticks.
76
00:02:41,200 --> 00:02:43,166
-[Drew] Yeah.
-They took it
down to nothing.
77
00:02:43,166 --> 00:02:44,266
Wow.
78
00:02:44,266 --> 00:02:46,467
[Sean]
I've been in constructionfor 15 years.
79
00:02:46,467 --> 00:02:48,467
Building homes
and flipping homes
80
00:02:48,467 --> 00:02:51,867
gives me the freedom
of doing what my vision is.
81
00:02:51,867 --> 00:02:53,266
[Natalie] So I'ma real estate agent.
82
00:02:53,266 --> 00:02:55,266
We decided to combineour expertise.
83
00:02:55,266 --> 00:02:57,000
We need the brothers
because though both of us
84
00:02:57,000 --> 00:02:58,767
have been in the industry
for many years.
85
00:02:58,767 --> 00:03:01,600
In this market,the costs from everythinghas gone up.
86
00:03:01,600 --> 00:03:04,266
The profit margins
are becoming very, very thin
87
00:03:04,266 --> 00:03:05,900
because of interest rate.
88
00:03:05,900 --> 00:03:07,600
So we needall the help we can get.
89
00:03:07,600 --> 00:03:09,667
-Nice to meet you.
-Pleasure. Drew.
90
00:03:09,667 --> 00:03:11,467
-How are you? Sean.
Pleasure, man.
-[Drew] Nice to meet you.
91
00:03:11,467 --> 00:03:12,467
Wow.
92
00:03:12,467 --> 00:03:14,266
This is quite the project.
93
00:03:14,266 --> 00:03:16,567
First impression...Ahhh!
94
00:03:16,567 --> 00:03:18,900
This could be a money pit.It's torn apart.
95
00:03:18,900 --> 00:03:20,867
They are wellinto this project.
96
00:03:20,867 --> 00:03:22,467
There's no turning back.
97
00:03:22,467 --> 00:03:24,667
So when you got the house,
what was the state
of the house?
98
00:03:24,667 --> 00:03:26,967
It was a house,
but it was a
very, very, very old house.
99
00:03:26,967 --> 00:03:28,767
I don't thinkit's been touchedsince it was built
100
00:03:28,767 --> 00:03:29,934
in the '40s, I believe.
101
00:03:29,934 --> 00:03:32,066
-Okay.
-[Natalie] So, uh, we knew
we needed to do work,
102
00:03:32,066 --> 00:03:34,567
and it was just a matterof what will give usthe most value
103
00:03:34,567 --> 00:03:36,467
at the end of the day.
How much work should we do?
104
00:03:36,467 --> 00:03:39,100
We bought the property
three months ago.
105
00:03:39,100 --> 00:03:40,500
We got it under market.
106
00:03:40,500 --> 00:03:42,867
We saw the potentialto improve it
107
00:03:42,867 --> 00:03:45,200
and eventually flip itand sell it for property.
108
00:03:45,200 --> 00:03:47,166
[Natalie] We will becompletely gutting the house
109
00:03:47,166 --> 00:03:50,600
and creatinga five bedroom houseplus an ADU.
110
00:03:51,066 --> 00:03:52,133
We are going to add a pool
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00:03:52,133 --> 00:03:54,567
and completelylandscape the exterioras well.
112
00:03:54,567 --> 00:03:56,800
We want to do somethingthat really stands out,
113
00:03:56,800 --> 00:03:59,266
and that maintainsits original charm.
114
00:03:59,266 --> 00:04:01,500
Have you changed
the footprint? 'Cause it looks
like in addition--
115
00:04:01,500 --> 00:04:04,066
[Sean] Yes, we're addingsquare footage at the front.
116
00:04:04,066 --> 00:04:05,600
-[Natalie] The dining room
is at the front,
-[Sean] And then,
117
00:04:05,600 --> 00:04:06,634
into the primary bedroom.
118
00:04:06,634 --> 00:04:09,100
-[Jonathan] Okay.
-Total of 499 square footage.
119
00:04:09,100 --> 00:04:11,300
-And raising...
-[Sean] Raising it
to ten foot.
120
00:04:11,300 --> 00:04:12,634
-[Jonathan] Okay.
-[Sean] Ten foot ceiling.
121
00:04:12,634 --> 00:04:15,467
[Jonathan]
And how long did it takefor you to get your permits?
122
00:04:15,467 --> 00:04:17,266
Within 45 days.
We already got a permit.
123
00:04:17,266 --> 00:04:19,000
How did you turn
this around in 45 days?
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00:04:19,000 --> 00:04:20,867
Because most projects
with any additions
125
00:04:20,867 --> 00:04:22,767
on it right now,
you're sitting for months.
126
00:04:22,767 --> 00:04:23,934
-Four or five months. Yeah.
-Yeah.
127
00:04:23,934 --> 00:04:26,467
The reason that
we chose to do it
under 500 square feet
128
00:04:26,467 --> 00:04:28,567
is because
for cost effective purposes,
129
00:04:28,567 --> 00:04:29,967
but also with regards
to time,
130
00:04:29,967 --> 00:04:32,400
it goes through the city
much quicker if you add
under 500 square feet.
131
00:04:32,400 --> 00:04:33,500
-Right, right, right. Okay.
-[Drew] Yeah.
132
00:04:33,500 --> 00:04:35,467
[Jonathan]
The fact that they keptthe additions
133
00:04:35,467 --> 00:04:37,600
under 500 square feet,
134
00:04:37,600 --> 00:04:40,100
-that's genius, because
if they had even gone...
-Yeah.
135
00:04:40,100 --> 00:04:42,000
...another 50 square feet,
136
00:04:42,000 --> 00:04:44,900
they'd be waiting
six to nine months
to get an answer.
137
00:04:44,900 --> 00:04:46,900
[Natalie] And the footprintof the house was pretty bigto begin with.
138
00:04:46,900 --> 00:04:47,934
It was about 2800,
139
00:04:47,934 --> 00:04:50,667
so we figured 500would get it just over 3000.
140
00:04:50,667 --> 00:04:53,300
Oh, okay.
I thought your 3,000 was
including the garage.
141
00:04:53,300 --> 00:04:55,600
So what's the additional
square footage for the garage?
142
00:04:55,600 --> 00:04:57,166
Yeah, so, the garages
stay in the garage.
143
00:04:57,166 --> 00:04:59,700
There is a storage behind it.
144
00:04:59,700 --> 00:05:02,567
We're converting thatto an ADU.The ADU is additional.
145
00:05:02,567 --> 00:05:04,567
[Natalie] Yeah, and that's450 square feet.
146
00:05:04,567 --> 00:05:06,000
Oh, okay. What--
147
00:05:06,000 --> 00:05:08,367
And who's
the shrewd negotiator
between the two of you?
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00:05:08,367 --> 00:05:09,133
Oh, we're a good team.
149
00:05:09,133 --> 00:05:10,667
-[Jonathan] Oh, yeah?
-[laughs]
150
00:05:10,667 --> 00:05:11,533
[Drew] Who's good cop,
who's bad cop?
151
00:05:11,533 --> 00:05:13,867
-We're bad cop, bad cop.
-[all laughing]
152
00:05:13,867 --> 00:05:14,867
No, wait. Are you a couple?
153
00:05:14,867 --> 00:05:17,300
-No. My spouse
works with him.
-[Sean] Yeah.
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00:05:17,300 --> 00:05:19,000
They're on
the construction side.
I'm on the real estate.
155
00:05:19,000 --> 00:05:21,300
-Yeah. Her husband
is my partner.
-[Drew] Oh, oh. I see. I see.
156
00:05:21,300 --> 00:05:23,266
-So you're a licensed agent?
-I am.
157
00:05:23,266 --> 00:05:24,700
-You're a licensed contractor?
-Yeah.
158
00:05:24,700 --> 00:05:26,266
[Drew] Can you run through
the numbers for us?
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00:05:26,266 --> 00:05:28,500
[Sean] We bought it at 1.4.
160
00:05:28,500 --> 00:05:30,867
-[Drew] Okay.
-[Sean] Right now my budgetis at $700,000.
161
00:05:30,867 --> 00:05:32,266
That's including everything,
162
00:05:32,266 --> 00:05:35,367
and hopefully,our exit is goingto be 2.8. 2.9.
163
00:05:35,367 --> 00:05:37,300
You know what
the prices are in this area?
164
00:05:37,300 --> 00:05:39,300
-Yeah.
-Trying to get 2.8 or 2.9,
165
00:05:39,300 --> 00:05:41,300
you're kind of
pushing beyond
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00:05:41,300 --> 00:05:42,867
what this marketwill give, right?
167
00:05:42,867 --> 00:05:45,367
Absolutely. I agree
that it is on the high end
of the comps,
168
00:05:45,367 --> 00:05:48,500
but I know
that when you create
a good product, it sells.
169
00:05:48,500 --> 00:05:51,266
Well, people will buy it
at the right price,
if you have it.
170
00:05:51,266 --> 00:05:53,166
I mean, you could...
You could ask
$4 million for this.
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00:05:53,166 --> 00:05:54,667
-It's not going
to sell for that.
-Right.
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00:05:54,667 --> 00:05:56,867
I'm guessing if you're
putting $700,000 into this,
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00:05:56,867 --> 00:05:59,166
you're putting in
nice appliances,
great countertops.
174
00:05:59,166 --> 00:06:00,667
You're adding
a lot of function, right?
175
00:06:00,667 --> 00:06:01,567
Have you thought about
trying to find
176
00:06:01,567 --> 00:06:03,300
a little bit of savings
to maybe come down
177
00:06:03,300 --> 00:06:04,967
so that you're still
at a good high price point,
178
00:06:04,967 --> 00:06:06,600
but you're not
pushing the limits.
179
00:06:06,600 --> 00:06:08,867
So first of all,
no risk, no reward.
180
00:06:08,867 --> 00:06:11,300
Um, but I've been
in this business
long enough to know that
181
00:06:11,300 --> 00:06:13,567
if you want someone
to pay $3 million
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00:06:13,567 --> 00:06:15,300
or close to $3 million
for our project,
183
00:06:15,300 --> 00:06:16,900
-you have to have top
of the line appliances.
-Mmm-hmm.
184
00:06:16,900 --> 00:06:20,367
You have to have
nice flooring. You have
to have high ceilings.
185
00:06:20,367 --> 00:06:22,500
Like those are things
that you can't compromise on.
186
00:06:22,500 --> 00:06:23,867
The more you spendon the finishes
187
00:06:23,867 --> 00:06:25,900
and the moreyou pay attentionto the style,
188
00:06:25,900 --> 00:06:27,867
the more that generatesin return.
189
00:06:27,867 --> 00:06:31,000
And, I believe thatif you deliver a good project,there will be a buyer for it.
190
00:06:31,000 --> 00:06:32,200
-And have you seen this yard?
-[Jonathan] Yeah.
191
00:06:32,200 --> 00:06:33,867
-[Natalie] We have
over 11,000 square feet.
-I mean, yeah.
192
00:06:33,867 --> 00:06:35,467
[Natalie] So again,if you look at the comps,
193
00:06:35,467 --> 00:06:36,767
maybe theydon't reach $3 million,
194
00:06:36,767 --> 00:06:38,100
but they don't havethis kind of yard.
195
00:06:38,100 --> 00:06:39,367
[Drew] Some people thinka good investment
196
00:06:39,367 --> 00:06:40,867
is just how much money
you're making at the end.
197
00:06:40,867 --> 00:06:42,266
But it's also
how much you're spending.
198
00:06:42,266 --> 00:06:43,500
We'll see a project
199
00:06:43,500 --> 00:06:45,767
where we have a budgetthat we knowwe can get this done
200
00:06:45,767 --> 00:06:49,567
for half a million dollars
and somebody else comes in
and they do it for 1.2.
201
00:06:49,567 --> 00:06:51,467
You're blowing money
out the window.
202
00:06:51,467 --> 00:06:53,567
How long would it take you...
203
00:06:53,567 --> 00:06:56,967
with a positive cash flow
to make back all the money
204
00:06:56,967 --> 00:06:58,400
that you're spending?
205
00:06:58,400 --> 00:07:01,867
I guarantee you,these guys are spendingway more than they need to.
206
00:07:01,867 --> 00:07:03,800
So what is it you want
to do to the garage and ADU?
207
00:07:03,800 --> 00:07:05,266
[Natalie] We made ita one bedroom,
208
00:07:05,266 --> 00:07:06,867
-um, with a bathroom.
-[Drew] Can we take a peek?
209
00:07:06,867 --> 00:07:07,800
-Yeah. Let's take a look.
-[Natalie] Yeah.
210
00:07:07,800 --> 00:07:08,667
[Drew] All I care about is
211
00:07:08,667 --> 00:07:10,667
what are the decisionsthey're making
212
00:07:10,667 --> 00:07:12,100
that are gonnabe good for a buyer?
213
00:07:12,100 --> 00:07:15,400
So what we have here is,
that is the living area.
214
00:07:15,400 --> 00:07:17,166
Uh, then we have a one bedroom
215
00:07:17,166 --> 00:07:18,667
with a bathroomfor the bedroom.
216
00:07:18,667 --> 00:07:21,000
And then we havea secondary, like, powder room
217
00:07:21,000 --> 00:07:23,166
that can be used...that's gonna have double doorsthat can be used
218
00:07:23,166 --> 00:07:24,967
-just for the backyard--
-[Drew] For the pool?
219
00:07:24,967 --> 00:07:26,667
-You really
thought this through.
-Yeah.
220
00:07:26,667 --> 00:07:27,867
And then sliding glass doors
221
00:07:27,867 --> 00:07:29,467
-to this little patiofor the ADU.
-[Jonathan] Yeah.
222
00:07:29,467 --> 00:07:30,667
-Private patio for the ADU.
-[Natalie] Absolutely.
223
00:07:30,667 --> 00:07:32,000
[Sean] Because we're putting
a basketball court over there.
224
00:07:32,000 --> 00:07:33,100
-[Drew] Oh, really?
-[Sean] Yeah.
225
00:07:33,100 --> 00:07:34,600
[Drew] Have you puta basketball court in before?
226
00:07:34,600 --> 00:07:36,166
-Tennis court.
Never a basketball court.
-[Drew] Okay.
227
00:07:36,166 --> 00:07:38,800
So, right up
against the side wall
of the property,
228
00:07:38,800 --> 00:07:39,934
you have to think of going
229
00:07:39,934 --> 00:07:41,767
into the neighbor's yardand everything all the time.
230
00:07:41,767 --> 00:07:43,400
There are restrictions
for what you could do
231
00:07:43,400 --> 00:07:44,867
-for partitions.
-Oh, didn't think
about it.
232
00:07:44,867 --> 00:07:47,066
So just a couple
of things like that
to keep in mind.
233
00:07:47,066 --> 00:07:49,400
What's the timeline
on getting this done?
234
00:07:49,400 --> 00:07:53,667
Best case scenario,
about four and a half months,
we're done.
235
00:07:53,667 --> 00:07:56,367
-Yeah. Worst case, six months.
-[both] Okay.
236
00:07:56,367 --> 00:07:59,166
[Drew] Which, I mean,for a full gut and a pool
237
00:07:59,166 --> 00:08:01,266
and a basketball court,
all the landscaping
238
00:08:01,266 --> 00:08:03,600
and the ADU
that's still in L.A.
239
00:08:03,600 --> 00:08:04,400
That's still...
240
00:08:04,400 --> 00:08:05,900
[Natalie] That is very,
very quick.
241
00:08:05,900 --> 00:08:08,166
If you pass 100%
of your inspections
242
00:08:08,166 --> 00:08:10,266
and you're just
not waiting around--
243
00:08:10,266 --> 00:08:11,333
[Natalie] We have
everything lined up.
244
00:08:11,333 --> 00:08:14,100
[Sean] Yeah, all our rough
material's already here.
245
00:08:14,100 --> 00:08:16,000
-[Drew] Yeah.
-Like, there's no delays.
246
00:08:16,000 --> 00:08:18,467
What... what is it you would
actually get from us...
247
00:08:18,467 --> 00:08:20,867
being a part of this?
How would we help
if we backed you?
248
00:08:20,867 --> 00:08:23,200
[Sean] For me,
it's an opportunity to
249
00:08:23,200 --> 00:08:25,367
see things
that I will never
be able to see.
250
00:08:25,367 --> 00:08:28,367
You're catching things
that I need
251
00:08:28,367 --> 00:08:30,200
100 years more
of experience to see.
252
00:08:30,200 --> 00:08:32,367
So as far as being more
efficient and seamless
253
00:08:32,367 --> 00:08:34,100
and creating
the best product,
254
00:08:34,100 --> 00:08:35,567
I think you guys
can assist us with that.
255
00:08:35,567 --> 00:08:36,767
[Jonathan] I mean,this project...
256
00:08:36,767 --> 00:08:38,600
Massive undertaking.
257
00:08:38,600 --> 00:08:41,100
-Yeah.
-Potentially massive profit.
258
00:08:41,100 --> 00:08:43,667
Depends. We're not in
an ideal climate for that.
259
00:08:43,667 --> 00:08:45,500
So that's where you startto really wonder,
260
00:08:45,500 --> 00:08:47,367
you know,where am I overspending?
261
00:08:47,367 --> 00:08:49,000
Am I hitting
the market right?
262
00:08:49,000 --> 00:08:51,400
[Drew] You know this area
from a real estate
perspective.
263
00:08:51,400 --> 00:08:54,700
Your extensive
construction experience
makes a big difference too.
264
00:08:54,700 --> 00:08:56,800
You guys are very methodical,
which is very important,
265
00:08:56,800 --> 00:08:58,834
and those
are the types of people
that we like to work with.
266
00:08:59,367 --> 00:09:01,100
We'd be honored. [laughs]
267
00:09:01,100 --> 00:09:03,500
I mean, we... We have
obviously other houses
to look at, and...
268
00:09:03,500 --> 00:09:06,100
we want to make sure
we make the best decision
for who we're gonna back.
269
00:09:06,100 --> 00:09:08,300
-You've got to pick...
you got to pick us.
-[both laugh]
270
00:09:08,300 --> 00:09:09,667
-[Jonathan] Why? Why do
we have to pick you?
-You have to.
271
00:09:09,667 --> 00:09:12,967
It doesn't feel like,
you maybe do need us.
272
00:09:12,967 --> 00:09:15,467
First of all, we do need you,
and we need you desperately.
273
00:09:15,467 --> 00:09:17,967
To be honest,
if you guys jump in
and help us
274
00:09:17,967 --> 00:09:20,567
and give us your expertise
and help us
to finish material,
275
00:09:20,567 --> 00:09:22,767
you actually can save us,
you can save our business.
276
00:09:22,767 --> 00:09:24,967
Absolutely.
With your expertise
277
00:09:24,967 --> 00:09:27,900
and your ability
to help us cut on costs
278
00:09:27,900 --> 00:09:30,000
and know the market the way
that you guys know the market,
279
00:09:30,000 --> 00:09:31,400
and we know that
you'd be an asset to us.
280
00:09:31,400 --> 00:09:32,433
[Sean] Everything
is on the line.
281
00:09:32,433 --> 00:09:35,100
This project,
if it's gonna
be not profitable,
282
00:09:35,100 --> 00:09:37,467
if we're gonna lose money,that's gonna handicap me
283
00:09:37,467 --> 00:09:39,000
the opportunityto buy more properties.
284
00:09:39,000 --> 00:09:41,100
So that's gonna
make us or break us.
285
00:09:41,100 --> 00:09:42,867
-Well, it's been a pleasure.
-Thank you so much.
286
00:09:42,867 --> 00:09:44,500
-Thank you very much.
-Appreciate it. Thank you
for your time.
287
00:09:44,500 --> 00:09:45,867
[Natalie] All right.
Thank you.
288
00:09:45,867 --> 00:09:47,100
We have a lot to lose.
289
00:09:47,100 --> 00:09:47,934
Our time is valuable.
290
00:09:47,934 --> 00:09:49,266
We also have
a lot of money invested
291
00:09:49,266 --> 00:09:50,767
into this specific project.
292
00:09:50,767 --> 00:09:51,934
If the brothersdon't back us,
293
00:09:51,934 --> 00:09:54,100
I feel like
we'd be missing out
on a huge opportunity.
294
00:09:54,100 --> 00:09:55,400
[Jonathan] That... not what
I was expecting.
295
00:09:55,400 --> 00:09:58,266
These guys
are really confident.
296
00:09:58,266 --> 00:10:00,400
Although when I looked in
and saw this house,
I was thinking,
297
00:10:00,400 --> 00:10:02,667
"Oh, no. What's this
money pit? What have
they gotten themselves into?"
298
00:10:02,667 --> 00:10:05,367
-But at the end of the day,
actually, it's not too bad.
-[Drew] Yeah.
299
00:10:05,367 --> 00:10:08,467
[Jonathan]
She said the one thingthat does scare me
300
00:10:08,467 --> 00:10:11,667
is she wants to set the comp
with this project,
301
00:10:11,667 --> 00:10:13,000
-which is what
somebody always says...
-Yeah.
302
00:10:13,000 --> 00:10:14,266
...when they're looking
at the numbers
303
00:10:14,266 --> 00:10:16,867
-and they know that they're
asking for a crazy price.
-Yeah.
304
00:10:16,867 --> 00:10:19,166
But when you're
in a market right now,
it's not a hot market.
305
00:10:19,166 --> 00:10:21,867
You don't want to be
the most expensive home.
306
00:10:21,867 --> 00:10:26,400
Their target is $100,000
over the market cap
in this area,
307
00:10:26,400 --> 00:10:30,867
but it's just a tough strategy
to be the top price.
308
00:10:30,867 --> 00:10:32,834
Let's see some more houses.
309
00:10:37,900 --> 00:10:39,567
[Jonathan] We're heading backto North Hollywood.
310
00:10:39,567 --> 00:10:42,400
There's a hotbedof property investorswanting our backing,
311
00:10:42,400 --> 00:10:44,867
Our next pitchis from Sheryl and Jasper,
312
00:10:44,867 --> 00:10:47,066
a mother-daughter teamwith lots of experience,
313
00:10:47,066 --> 00:10:50,100
who are just getting intomulti-unit projectsfor the first time.
314
00:10:50,100 --> 00:10:51,467
That's it.
Behind the trees
over here.
315
00:10:51,467 --> 00:10:53,166
[Jonathan] Okay. Looks great.
316
00:10:53,166 --> 00:10:55,667
They are partway throughconstruction on a triplex,
317
00:10:55,667 --> 00:10:57,867
but we've heard that progressis at a standstill.
318
00:10:57,867 --> 00:10:59,100
This is a big project.
319
00:10:59,100 --> 00:11:00,634
It's the biggestthey've ever done.
320
00:11:00,634 --> 00:11:03,800
So we want to seewhat their sticking point is,what the problem is.
321
00:11:07,600 --> 00:11:09,500
So far, I like what I see.
322
00:11:09,500 --> 00:11:10,867
Part of the appealin this area
323
00:11:10,867 --> 00:11:12,600
is that you can walkto shops and cafes.
324
00:11:12,600 --> 00:11:15,800
But when Sheryl and Jasperbought their triplexon a major thoroughfare,
325
00:11:15,800 --> 00:11:18,066
they didn't realizeit had commercial zoning.
326
00:11:18,066 --> 00:11:21,367
[Sheryl] We're here developinga four-story triplex.
327
00:11:21,367 --> 00:11:24,000
I've been
in the real estate industry
for over 30 years,
328
00:11:24,000 --> 00:11:27,400
and this projecthas been very frustrating.
329
00:11:27,400 --> 00:11:29,166
It has consumed my life.
330
00:11:29,166 --> 00:11:31,767
[Jasper] It's likewe're in thiscycle of chaos.
331
00:11:31,767 --> 00:11:34,467
The brothers coming in
would be life-changing for us,
332
00:11:34,467 --> 00:11:37,000
-Oh. [chuckles]
-It looks a lot more
under construction from here.
333
00:11:37,000 --> 00:11:38,066
It's deceiving from the front.
334
00:11:38,066 --> 00:11:40,900
-Oh, inside as well.
We're all still studs.
-Okay.
335
00:11:40,900 --> 00:11:43,367
-Hey. How are you?
-Hi. Hello, how are you?
336
00:11:43,367 --> 00:11:44,567
Just hanging out
in garages.
337
00:11:44,567 --> 00:11:48,100
-I'm Sheryl.
This is my daughter, Jasper.
-Hi, I'm Jasper.
338
00:11:48,100 --> 00:11:50,166
I gave birth
to my business partner.
[laughs]
339
00:11:50,166 --> 00:11:52,367
Walking up, the first thing
we both said, we're like,
340
00:11:52,367 --> 00:11:53,567
"That's a good-looking
building."
341
00:11:53,567 --> 00:11:55,166
[both exclaim in pleasure]
342
00:11:55,166 --> 00:11:56,500
We have some issues. [laughs]
343
00:11:56,500 --> 00:11:58,567
[Jasper] Lots of issues,
actually.
344
00:11:58,567 --> 00:12:00,166
-[Drew] What are the issues?
-We've been at this
for two years.
345
00:12:00,166 --> 00:12:01,567
-Yeah.
-[Jonathan] Oh, two years?
346
00:12:01,567 --> 00:12:02,700
-It's been two years.
-Yes.
347
00:12:02,700 --> 00:12:05,100
-Why so long?
-[Sheryl] It's
a residential building,
348
00:12:05,100 --> 00:12:07,467
but they're treating it
as though it's commercial
349
00:12:07,467 --> 00:12:09,266
because we're on
a busy street.
350
00:12:09,266 --> 00:12:10,600
Yeah, we have
the same building
around the corner,
351
00:12:10,600 --> 00:12:12,300
and it's not treated
as commercial.
352
00:12:12,300 --> 00:12:14,166
[Sheryl] But that one's
an interior lot.
353
00:12:14,166 --> 00:12:15,667
We learnedthat the property
354
00:12:15,667 --> 00:12:18,266
was turnedfrom residentialto commercial.
355
00:12:18,266 --> 00:12:21,100
It was heartbreaking.
We had no idea
until we started
356
00:12:21,100 --> 00:12:24,667
that we were gonna come up
against these extra costs.
357
00:12:24,667 --> 00:12:26,800
[Jasper] It felt likewe were droppedinto deep water.
358
00:12:26,800 --> 00:12:30,600
We know residential,
but this is a new ballgame.
359
00:12:30,600 --> 00:12:34,300
[Sheryl] We've had to stop,get plans approved again.
360
00:12:34,300 --> 00:12:35,900
It just devastated us.
361
00:12:35,900 --> 00:12:38,567
[Jonathan] You said this isa building that you haveactually built elsewhere.
362
00:12:38,567 --> 00:12:41,200
[Sheryl] Well,it's under construction.This one's further along.
363
00:12:41,200 --> 00:12:42,967
-Can we look inside?
-[Sheryl] Absolutely.
Let's go.
364
00:12:42,967 --> 00:12:43,900
[Jonathan] They're all aboutthe same size?
365
00:12:43,900 --> 00:12:45,900
[Sheryl] There's two1700 square feet,
366
00:12:45,900 --> 00:12:47,600
and then the last one'sa little bit larger.
367
00:12:47,600 --> 00:12:49,767
[Jonathan] Okay, so nothinghas been done on the inside?
368
00:12:49,767 --> 00:12:50,900
[Sheryl] We're at drywall.
369
00:12:50,900 --> 00:12:52,266
[Jonathan] Oh, so roughing'sall done on everything?
370
00:12:52,266 --> 00:12:54,867
[Sheryl] Yes. Yeah, we've hada tough time with that also.
371
00:12:54,867 --> 00:12:57,367
For example,
these lighting fixtures?
372
00:12:57,367 --> 00:12:59,867
We installed them,
got inspection
and had to take them all out.
373
00:12:59,867 --> 00:13:02,767
We had to change them
to fire rated?
Things like that.
374
00:13:02,767 --> 00:13:06,867
How much have
you wasted
on this project so far?
375
00:13:06,867 --> 00:13:09,166
-I'd say close to $200,000.
-Mmm-hmm.
376
00:13:09,166 --> 00:13:10,300
-200 grand.
-[Sheryl] Yes.
377
00:13:10,300 --> 00:13:12,000
What's your... what's your
total budget for the build?
378
00:13:12,000 --> 00:13:13,400
It was 1.1 million.
379
00:13:13,400 --> 00:13:15,300
Oh, my gosh.
That's like 20%.
380
00:13:19,166 --> 00:13:22,266
How much have you wasted
on this project so far?
381
00:13:22,266 --> 00:13:24,500
-I'd say close to $ 200,000.
-Mmm-hmm.
382
00:13:24,500 --> 00:13:26,066
-[Drew] Yeesh.
-[Jonathan] 200 grand.
383
00:13:26,066 --> 00:13:28,100
What are you bringing
to the partnership here,
384
00:13:28,100 --> 00:13:30,100
from experience
or family business?
385
00:13:30,100 --> 00:13:33,400
My mom has been doing this
since I was two years old.
386
00:13:33,400 --> 00:13:35,467
I grew up knowingthat I wantto work with my mom
387
00:13:35,467 --> 00:13:38,567
until I studied accounting,real estate.
388
00:13:38,567 --> 00:13:40,266
I just completeda program at USC
389
00:13:40,266 --> 00:13:41,600
for commercial real estate,and now--
390
00:13:41,600 --> 00:13:43,166
-That's amazing.
-[both] Yeah.
391
00:13:43,166 --> 00:13:45,066
[Sheryl] She's a lot
more organized than I am
392
00:13:45,066 --> 00:13:47,000
and she's trying to get me--
393
00:13:47,000 --> 00:13:48,100
[Jasper] Yeah, but there's
so many projects,
394
00:13:48,100 --> 00:13:50,467
and it's just us two
that it's hard
to be organized.
395
00:13:50,467 --> 00:13:52,600
It's heaven in the beginning,
396
00:13:52,600 --> 00:13:54,166
total chaos in the middle,
397
00:13:54,166 --> 00:13:56,000
and then wonderful
at the end.
398
00:13:56,000 --> 00:13:57,300
All of them
have been like that.
399
00:13:58,867 --> 00:14:01,100
-[Jonathan] Right.
-[Sheryl] And all
the bedrooms are upstairs.
400
00:14:01,100 --> 00:14:03,567
Every bedroom has a bathroom.
401
00:14:03,567 --> 00:14:04,900
[Jonathan] Is there a bathroomon the living room level?
402
00:14:04,900 --> 00:14:06,467
[Sheryl] There isthe powder room.
403
00:14:06,467 --> 00:14:08,300
So you basically
have a bathroom here,
404
00:14:08,300 --> 00:14:10,667
that room has a bathroomand there's a hall bathroomfor this room?
405
00:14:10,667 --> 00:14:12,667
- [Sheryl] Yes.
-[Jonathan] As long as they'rethree functional bedrooms.
406
00:14:12,667 --> 00:14:15,467
Once you startto get too small,it's not as appealing.
407
00:14:15,467 --> 00:14:18,000
I can see how long
this building's
been sitting open.
408
00:14:18,000 --> 00:14:19,700
Have you had any issues
with the rain?
409
00:14:19,700 --> 00:14:22,000
-Oh, boy.
-It flooded...
410
00:14:22,000 --> 00:14:23,166
-[Sheryl] Two times.
-[Jasper] Yeah.
411
00:14:23,166 --> 00:14:25,800
[Sheryl] The deck was notsealed properly
412
00:14:25,800 --> 00:14:26,634
when the hard rains came.
413
00:14:26,634 --> 00:14:28,667
Did that cost you
or was it covered?
414
00:14:28,667 --> 00:14:31,400
They only charged me
$1500 to redo it
because they messed up.
415
00:14:31,400 --> 00:14:34,567
The biggest mistake
you could make
is just anticipating that
416
00:14:34,567 --> 00:14:36,567
-everybody's doing what
they're supposed to be doing.
-Oh, yeah.
417
00:14:36,567 --> 00:14:37,533
Yeah. You have to stay
on top of it.
418
00:14:37,533 --> 00:14:40,667
If I'm not gonna be
on every site every day,
419
00:14:40,667 --> 00:14:43,000
I have to have crews there
that I trust.
420
00:14:43,000 --> 00:14:44,567
[Drew] Trustedgo-to sub trades.
421
00:14:44,567 --> 00:14:46,467
You have to have
those connections as well
422
00:14:46,467 --> 00:14:48,200
if you want to have
a successful project.
423
00:14:48,200 --> 00:14:50,700
-This is an
incredible space.
-[Sheryl] Yeah, I love it.
424
00:14:50,700 --> 00:14:52,033
[Jonathan] This is amazing.
425
00:14:52,033 --> 00:14:55,200
-[Jasper] Yeah.
-[Sheryl] Yeah, this kind of
sold us on the design.
426
00:14:55,200 --> 00:14:57,467
Uh, are they all
exactly the same footprint?
427
00:14:57,467 --> 00:14:59,567
-The last unit is larger.
-[Jasper] The last unit
is bigger.
428
00:14:59,567 --> 00:15:01,667
-[Jonathan] The one
facing the view?
-[Sheryl laughs]Yes.
429
00:15:01,667 --> 00:15:03,767
-No matter what, it's L.A.
-[Sheryl] It's L.A.
430
00:15:03,767 --> 00:15:05,266
People love having
a great patio.
431
00:15:05,266 --> 00:15:06,567
[Drew] This is
a huge value add.
432
00:15:06,567 --> 00:15:09,066
-If you're wanting
to get top dollar rent...
-[Jasper] Mmm-hmm.
433
00:15:09,066 --> 00:15:10,967
...you need to have features
like this to compete.
434
00:15:10,967 --> 00:15:13,066
[Sheryl] This projectis by far
435
00:15:13,066 --> 00:15:15,100
the most challengingthat I've ever done.
436
00:15:15,100 --> 00:15:16,800
If it goes south,
it could ruin us.
437
00:15:16,800 --> 00:15:19,467
So for this neighborhood,
do you know
what the rental rate is?
438
00:15:19,467 --> 00:15:21,266
$5500 for two.
439
00:15:21,266 --> 00:15:23,667
-And then $6000 for-- Yeah.
-For the last one.
440
00:15:23,667 --> 00:15:25,367
Does that give you
a positive cash flow?
441
00:15:25,367 --> 00:15:26,967
It does give
a positive cash flow.
442
00:15:26,967 --> 00:15:29,967
It's about $5,500 a month.
443
00:15:29,967 --> 00:15:33,266
-That covers your expenses,
your mortgage payment?
-[both] Yes. Yeah.
444
00:15:33,266 --> 00:15:35,967
Eventually,
when you go to sell
what are you anticipating
445
00:15:35,967 --> 00:15:37,467
your profit could be?
446
00:15:37,467 --> 00:15:38,867
-$900. Somewhere around there.
-Yeah.
447
00:15:38,867 --> 00:15:41,400
-How long would you
hold it as a rental?
-[Sheryl] For maybe a year.
448
00:15:41,400 --> 00:15:42,767
Sell two units and keep one.
449
00:15:42,767 --> 00:15:45,800
Why do you think
this is a good investment?
Why should we be involved?
450
00:15:45,800 --> 00:15:47,200
Oh, wow.
I mean, I thought it was
451
00:15:47,200 --> 00:15:48,767
a good investment
because of the neighborhood.
452
00:15:48,767 --> 00:15:49,800
In a few years,
453
00:15:49,800 --> 00:15:52,166
it's just gonna be
so amazing here.
454
00:15:52,166 --> 00:15:54,000
-Why would you sell it
in one then?
-Yeah, exactly.
455
00:15:54,000 --> 00:15:56,166
-You're right.
You're absolutely right.
-Yeah.
456
00:15:56,166 --> 00:15:58,467
-I think she's afraid
of debt. And--
-I am afraid of debt.
457
00:15:58,467 --> 00:16:01,867
I... I went through
the 2008 crash.
458
00:16:01,867 --> 00:16:03,800
-Don't be afraid of debt.
-[Jasper] Mmm-hmm.
459
00:16:03,800 --> 00:16:05,266
You actually can make
a better return
460
00:16:05,266 --> 00:16:07,000
-when you're using
somebody else's money.
-[Sheryl] Okay.
461
00:16:07,000 --> 00:16:09,100
-Even with
the interest calculated.
-[Jasper] Yeah.
462
00:16:09,100 --> 00:16:10,166
Can you break down
all the numbers?
463
00:16:10,166 --> 00:16:12,500
-So we purchased it
for $875,000.
-[Jasper] Yes.
464
00:16:12,500 --> 00:16:15,800
All-in, the construction
will be about
one $1,250,000 or so.
465
00:16:15,800 --> 00:16:17,500
So about $2 million
we're into it.
466
00:16:17,500 --> 00:16:21,000
So you're $2 million all in.
Anything else
make you fearful
467
00:16:21,000 --> 00:16:23,000
that you're not gonna
stay under $2 million?
468
00:16:23,000 --> 00:16:25,467
Uh... her spending
on the finishes.
469
00:16:25,467 --> 00:16:27,967
She's used to doing theseluxury homes in Encino,
470
00:16:27,967 --> 00:16:29,767
putting veryexpensive things in there.
471
00:16:29,767 --> 00:16:31,467
But I don't thinkthat this calls for this.
472
00:16:31,467 --> 00:16:33,300
I mean, we've kind of
been arguing about it.
473
00:16:33,300 --> 00:16:35,300
She tries to reign you in,
but you don't listen to her.
474
00:16:35,300 --> 00:16:38,400
-Not at all, she tells me
just stick with the numbers.
-[laughs]
475
00:16:38,400 --> 00:16:41,266
She's the designer,
but I'm like, "The design
is part of the numbers."
476
00:16:41,266 --> 00:16:43,567
-You're already $200,000
over budget.
-[both] Yes.
477
00:16:43,567 --> 00:16:45,367
-All the finishing touches...
-[Sheryl] Right.
478
00:16:45,367 --> 00:16:47,600
-...those are
the most expensive parts.
-Yeah.
479
00:16:47,600 --> 00:16:50,266
-Why would you need us?
What would--
-[Sheryl] Why do we need you?
480
00:16:50,266 --> 00:16:52,200
-Did you just hear everything
you just said to us?
-[laughs]
481
00:16:52,200 --> 00:16:53,500
Are you kidding me?
482
00:16:53,500 --> 00:16:54,867
-[Jasper] Yeah.
-[Sheryl] I mean, my God.
483
00:16:54,867 --> 00:16:56,500
-Yeah.
-My whole thought process.
484
00:16:56,500 --> 00:16:58,400
-I've been doing this
for a really long time.
-[Jasper] Mmm-hmm.
485
00:16:58,400 --> 00:17:01,266
-So just now,
of course, we need you.
-[Jasper] Mmm-hmm.
486
00:17:01,266 --> 00:17:03,266
We're doing everything
from A to Z
487
00:17:03,266 --> 00:17:05,200
and it's just too much.
We need help.
488
00:17:05,200 --> 00:17:08,200
-I feel like
I've been stuck for years...
-[Jasper] Oh, yeah.
489
00:17:08,200 --> 00:17:10,767
...in this place
where everything is chaotic.
490
00:17:10,767 --> 00:17:13,400
And there is a next level,
and I feel like
491
00:17:13,400 --> 00:17:14,867
I can't get
to that next level
492
00:17:14,867 --> 00:17:16,367
-with the way
I've been doing things.
-[Jasper] Mmm-hmm.
493
00:17:16,367 --> 00:17:20,467
So I really want to learn
how to turn that page
and get to the next level.
494
00:17:20,467 --> 00:17:22,567
If you had one thing
495
00:17:22,567 --> 00:17:25,100
you could get from us
that would help this project?
496
00:17:25,100 --> 00:17:26,867
Project management
and organization.
497
00:17:26,867 --> 00:17:28,467
-Yeah.
-[Jonathan] Okay. Okay.
498
00:17:28,467 --> 00:17:30,400
-Whether we back you
or not...
-[Sheryl] Yes.
499
00:17:30,400 --> 00:17:33,000
...if you take any advice
away from right now,
500
00:17:33,000 --> 00:17:34,500
you have got to get it done
501
00:17:34,500 --> 00:17:37,367
and get it rented
so that
you're covering those costs.
502
00:17:37,367 --> 00:17:38,767
There's a lot
for us to consider.
503
00:17:38,767 --> 00:17:40,266
Kudos on everything
that you've built.
504
00:17:40,266 --> 00:17:41,467
But you're still
not out of the woods yet.
505
00:17:41,467 --> 00:17:43,567
-[laughs]
-Thank you so much.
506
00:17:43,567 --> 00:17:45,000
-Thank you. Thank you.
-Nice to meet you.
507
00:17:45,000 --> 00:17:46,967
-We'll talk to you soon.
-Watch those pitfalls.
508
00:17:46,967 --> 00:17:48,567
-All right.
-We'll be in touch.
509
00:17:48,567 --> 00:17:50,166
[Jasper] If the brothersdon't back us,
510
00:17:50,166 --> 00:17:53,567
I'm afraid
that we're gonna stay
in this cycle of chaos.
511
00:17:53,567 --> 00:17:55,400
Hopefully they back us.
512
00:17:55,400 --> 00:17:57,600
[Sheryl] Our life savingsis in this project.
513
00:17:57,600 --> 00:17:59,100
And it's on the line.
514
00:17:59,100 --> 00:18:00,867
I like that
they actually have--
515
00:18:00,867 --> 00:18:02,667
-They're this far along.
-[Jonathan] Yeah.
516
00:18:02,667 --> 00:18:04,400
But, the problems they've had
that have delayed them.
517
00:18:04,400 --> 00:18:07,000
-That's in the rearview mirror
now, so...
-[Drew] Yeah.
518
00:18:07,000 --> 00:18:09,600
But the biggest problems
could be moving
from this point forward
519
00:18:09,600 --> 00:18:11,400
because it sounds like
this is where
520
00:18:11,400 --> 00:18:14,100
Sheryl really blows
budget continually.
521
00:18:14,100 --> 00:18:16,967
[Jonathan]
They could really use
a helping hand.
522
00:18:16,967 --> 00:18:18,066
That's impressive, though,
523
00:18:18,066 --> 00:18:19,900
that they've done
as many projects
as they've done.
524
00:18:19,900 --> 00:18:23,166
She's been doing it
since the the 90s,
but then,
525
00:18:23,166 --> 00:18:25,266
-she lost everything
in the 2000s. Yeah.
-In 2008.
526
00:18:25,266 --> 00:18:27,533
[Drew] Hopefully,
this isn't the project
that puts them back under.
527
00:18:31,567 --> 00:18:32,700
[Jonathan]
It's kind of tricky.
528
00:18:33,100 --> 00:18:34,266
It's apples and oranges.
529
00:18:34,266 --> 00:18:35,767
You got Natalie and Sean,
530
00:18:35,767 --> 00:18:39,367
single family,detached home,quiet neighborhood.
531
00:18:39,367 --> 00:18:41,467
And then you've got
Jasper and Sheryl
532
00:18:41,467 --> 00:18:43,367
with a multi-family complex
533
00:18:43,367 --> 00:18:44,200
right on a busy highway,
534
00:18:44,200 --> 00:18:47,266
but bordering
a great area in NoHo.
535
00:18:47,266 --> 00:18:49,200
[Drew] The design
and everything
that Natalie talked about,
536
00:18:49,200 --> 00:18:50,300
it sounds pretty great.
537
00:18:50,300 --> 00:18:52,266
They have experience.
They know what they're doing.
538
00:18:52,266 --> 00:18:55,000
They know what they're doing.
But they're making
classic mistakes,
539
00:18:55,000 --> 00:18:57,700
like overestimating
what the final sale price
could be.
540
00:18:57,700 --> 00:18:58,600
You're kind of pushing
541
00:18:58,600 --> 00:19:01,166
beyond what this market
will give, right?
542
00:19:01,166 --> 00:19:03,100
I agree
that it's on the high end
of the comps.
543
00:19:03,100 --> 00:19:04,767
But no risk, no reward.
544
00:19:04,767 --> 00:19:05,734
I think that
Sheryl and Jasper
545
00:19:05,734 --> 00:19:07,467
are making more mistakes,
especially Sheryl.
546
00:19:07,467 --> 00:19:08,767
She's been doing
this for years.
547
00:19:08,767 --> 00:19:12,000
Yet she's at that point
where she's about
to start overspending
548
00:19:12,000 --> 00:19:13,567
on all the materials
for the design
549
00:19:13,567 --> 00:19:14,867
and really reduce
their margin.
550
00:19:14,867 --> 00:19:17,266
She's used to doing these
luxury homes in Encino,
551
00:19:17,266 --> 00:19:19,100
putting very
expensive things in there.
552
00:19:19,100 --> 00:19:21,266
The only thing I think
they're being
very realistic with
553
00:19:21,266 --> 00:19:22,767
is what they
could rent for.
554
00:19:22,767 --> 00:19:26,000
I do think they could
get $5500 a month
for those units.
555
00:19:26,000 --> 00:19:27,767
Both of them
will get the projects done.
556
00:19:27,767 --> 00:19:29,400
I do feel like
557
00:19:29,400 --> 00:19:31,800
it's harder
to maybe get Natalie
558
00:19:31,800 --> 00:19:33,867
to listen to the advice
that we're giving.
559
00:19:33,867 --> 00:19:36,000
I think she feels
very confident--
560
00:19:36,000 --> 00:19:38,567
But Sheryl's been making
the same mistakes for decades.
561
00:19:38,567 --> 00:19:41,800
I can see a stubbornness
with both Natalie and Sheryl.
562
00:19:44,700 --> 00:19:46,500
[Jonathan] Okay.
I think I figured out
563
00:19:46,500 --> 00:19:48,266
which project
would work better for me.
564
00:19:48,266 --> 00:19:49,900
I think I know
who I wanna back.
565
00:19:54,467 --> 00:19:56,000
[Jonathan] Okay.I think I figured out
566
00:19:56,000 --> 00:19:57,767
which projectwould work better for me.
567
00:19:57,767 --> 00:19:59,300
I think I know
who I want to back.
568
00:19:59,300 --> 00:20:00,600
I think Sheryl and Jasper.
569
00:20:00,600 --> 00:20:02,367
I agree with you.
I think they need it more.
570
00:20:02,367 --> 00:20:03,867
They need us to break
through the next level.
571
00:20:03,867 --> 00:20:07,000
That's actually how I feel
because there's more potential
572
00:20:07,000 --> 00:20:09,867
for Jasper and Sheryl to failif they don't have our help.
573
00:20:09,867 --> 00:20:11,900
I expect Natalie and Seanwill think twice
574
00:20:11,900 --> 00:20:14,700
about their high sale pricenow thatthey've spoken with us.
575
00:20:14,700 --> 00:20:16,166
And they'll find a wayto reduce costs
576
00:20:16,166 --> 00:20:19,000
by maybe tappinginto Sean'sconstruction contacts.
577
00:20:19,000 --> 00:20:21,266
They'll definitely learnfrom this experienceand keep at it.
578
00:20:21,266 --> 00:20:24,000
But we'll keep in touchto offer adviceif they need any.
579
00:20:24,000 --> 00:20:25,667
I thinkSheryl and Jasper's triplex
580
00:20:25,667 --> 00:20:27,900
is a greatmentorship opportunity for us.
581
00:20:27,900 --> 00:20:31,166
We like workingwith experienced investorswhenever we can.
582
00:20:31,166 --> 00:20:33,066
They just need
a project manager. Badly.
583
00:20:33,066 --> 00:20:35,166
We've got Donnie coming off
the one project.
584
00:20:35,166 --> 00:20:37,400
I think we should
actually have
one of our designers
585
00:20:37,400 --> 00:20:38,834
-hop in, too.
-[Jonathan] Okay.
586
00:20:38,834 --> 00:20:40,967
-Should we give him a call?
-[Drew] Yeah, yeah.
Let me just pull over.
587
00:20:40,967 --> 00:20:44,266
[Jonathan] There's a windowwhere we havesome incredible trades,
588
00:20:44,266 --> 00:20:46,266
some incredible designers,people that could work
589
00:20:46,266 --> 00:20:49,667
on something else for usbefore the nextproject begins.
590
00:20:49,667 --> 00:20:52,567
That's the window
where I think these folks
can really benefit.
591
00:20:52,567 --> 00:20:53,867
-Hello.
-[Drew] Hey.
592
00:20:53,867 --> 00:20:55,867
-[both] Hi!
-[Sheryl chuckles]
593
00:20:55,867 --> 00:20:58,166
[Jonathan] We have had
a lot of conversation
594
00:20:58,166 --> 00:21:02,200
about where you guys are at,
so we want to back you guys.
595
00:21:02,200 --> 00:21:05,000
[both squeal]
596
00:21:05,000 --> 00:21:06,900
Thank you so much!
597
00:21:06,900 --> 00:21:09,166
You're welcome.
You're welcome.
I'll be honest with you,
598
00:21:09,166 --> 00:21:11,800
one other thing
that's really
important to us, Sheryl,
599
00:21:11,800 --> 00:21:13,467
are you honestly willing
600
00:21:13,467 --> 00:21:15,266
to stop making the mistakes
that you've made in the past
601
00:21:15,266 --> 00:21:16,500
by overspending
602
00:21:16,500 --> 00:21:19,500
and letting Jasper
take on some responsibility?
603
00:21:19,500 --> 00:21:21,767
Absolutely. Absolutely. Yes.
604
00:21:21,767 --> 00:21:23,200
Jasper, do you believe her?
605
00:21:23,200 --> 00:21:25,467
- I want to. [laughs]
-[Jonathan laughs]
606
00:21:25,467 --> 00:21:28,667
I'm just excitedand I really want herto do things
607
00:21:28,667 --> 00:21:30,033
better thanI've done them.
608
00:21:30,033 --> 00:21:32,066
So I'm grateful that you guysare going to come inand help us
609
00:21:32,066 --> 00:21:33,967
-turn the page.-Yeah. Thank youguys so much.
610
00:21:33,967 --> 00:21:36,700
We're gonna bring over
some of our trusted team
to work with you,
611
00:21:36,700 --> 00:21:39,100
project manager, designer,
and we'll touch base
612
00:21:39,100 --> 00:21:40,300
when we're gonna
get over there.
613
00:21:40,300 --> 00:21:42,600
-[Jonathan]
See you soon, all right?
-Okay. Thank you!
614
00:21:42,600 --> 00:21:44,300
-[Drew] Bye.
-[Jonathan] Bye, guys.
615
00:21:44,300 --> 00:21:46,500
[upbeat instrumental music]
616
00:21:53,300 --> 00:21:55,600
[Drew] We're gonna besupporting these investorsin so many different ways.
617
00:21:55,600 --> 00:21:56,867
Mentorship is the first part.
618
00:21:56,867 --> 00:21:58,867
We want to make sure
that they can learn
from our experience.
619
00:21:58,867 --> 00:22:02,000
Design, we wanna bring ideasto the tablethat will absolutely
620
00:22:02,000 --> 00:22:05,100
blow the designout of the water and give themopportunity for more revenue.
621
00:22:05,100 --> 00:22:07,767
[Jonathan] They're already200 grand in the hole,
622
00:22:07,767 --> 00:22:09,200
over and abovetheir original budget.
623
00:22:09,200 --> 00:22:11,767
[Drew] And project managementis a massive partof this deal, too.
624
00:22:11,767 --> 00:22:13,667
We wanna make surethat they're organizedthe way we organize.
625
00:22:13,667 --> 00:22:16,467
We do up to, what,
20-plus houses at a time?
626
00:22:16,467 --> 00:22:18,100
We are very organized.
627
00:22:18,100 --> 00:22:21,000
-Kelly. Donnie.
-[Donnie] Nice to meet you.
628
00:22:21,000 --> 00:22:24,567
We have cherry picked
the problem-solvers
629
00:22:24,567 --> 00:22:26,166
for the exact problems
you have.
630
00:22:26,166 --> 00:22:29,166
-Oh, wow.
-Just to show you
how much we trust Donnie,
631
00:22:29,166 --> 00:22:30,567
he has worked with us
for many, many years.
632
00:22:30,567 --> 00:22:34,066
He actually did the project,
managing on my house,
my personal house,
633
00:22:34,066 --> 00:22:35,567
on Jonathan's personal house.
634
00:22:35,567 --> 00:22:37,867
And the place looks great.
Everything seems to be
tucked up
635
00:22:37,867 --> 00:22:39,266
and well put together.
636
00:22:39,266 --> 00:22:40,533
You've obviously
passed some inspections,
637
00:22:40,533 --> 00:22:43,100
-and we're not starting
from scratch.
-[Sheryl] Yes, we have.
638
00:22:43,100 --> 00:22:44,767
It's been brutal,
but, yes, we have.
639
00:22:44,767 --> 00:22:47,600
Our first goal is to sit down
and see where, design-wise,
640
00:22:47,600 --> 00:22:49,767
what's been established,
what's in production.
641
00:22:49,767 --> 00:22:52,867
[Kelly] And you guys
are a little bit glamorous,
642
00:22:52,867 --> 00:22:56,100
and if this is kind of
an investment property,
643
00:22:56,100 --> 00:22:58,600
-we gotta scale back
on the glam.
-Okay.
644
00:22:58,600 --> 00:23:02,300
So, I see we're wired
for a TV here. Is that
the final spot?
645
00:23:02,300 --> 00:23:03,767
[Sheryl] That's not
the final spot.
646
00:23:03,767 --> 00:23:08,667
No, the plan was to have
the sofa and chairs
go this way.
647
00:23:08,667 --> 00:23:11,700
And that's why I wanteda television and built-inthat way.
648
00:23:11,700 --> 00:23:13,800
[Kelly] That's definitelythe best wall for it,
649
00:23:13,800 --> 00:23:17,100
because havingcustom built-ins is great.
It really reduces the clutter.
650
00:23:17,100 --> 00:23:19,567
And, then, it createsa focal pointfor leisure activities
651
00:23:19,567 --> 00:23:21,667
like TV, books, games.
652
00:23:21,667 --> 00:23:24,967
[Drew] I agree. This isthe kind of living spacerenters will pay for.
653
00:23:24,967 --> 00:23:29,000
You really need to communicate
what that plan is and have
that information here.
654
00:23:29,000 --> 00:23:31,867
You know, if we see
what the furniture layout is,
we would know
655
00:23:31,867 --> 00:23:34,400
-that there's no reason
for a TV on that wall.
-No reason for that.
656
00:23:34,400 --> 00:23:36,800
I think one thing
that we can do is really
communicate the information
657
00:23:36,800 --> 00:23:38,266
and have printouts
on the wall.
658
00:23:38,266 --> 00:23:40,467
If your subs knowthe design plan,
659
00:23:40,467 --> 00:23:42,967
they'll know exactly wherethings need to be installed.
660
00:23:42,967 --> 00:23:45,567
All they need to dois tape a plan up on the wall
661
00:23:45,567 --> 00:23:47,767
and everyone will knowwhere things need to go.
662
00:23:47,767 --> 00:23:49,767
[Jonathan] So,it's a three-bed,four-bath townhouse.
663
00:23:49,767 --> 00:23:52,266
-[Sheryl] Right.
-[Jonathan] And you've plannedfor decent-sized closet space?
664
00:23:52,266 --> 00:23:53,834
[Sheryl] Yes.
665
00:23:53,834 --> 00:23:55,600
[Drew] And were you planningon doing custom vanitiesand things like that?
666
00:23:55,600 --> 00:23:57,567
[Sheryl] I always do it,but it doesn't mean I have to.
667
00:23:57,567 --> 00:24:01,767
All of the renderings
and the things that I'm seeing
that you guys have sent over
668
00:24:01,767 --> 00:24:04,166
is very graysand blacks and whites.
669
00:24:04,166 --> 00:24:06,367
Well, that's great becausewe wanna appeal to everybody.
670
00:24:06,367 --> 00:24:08,600
That design aesthetic,
is that both of yours,
671
00:24:08,600 --> 00:24:10,467
-or is that what you wanted?
-It's her.
672
00:24:10,467 --> 00:24:12,000
How about yourself?
What would you like to see
673
00:24:12,000 --> 00:24:13,600
if it wasn't just
the black and white?
674
00:24:13,600 --> 00:24:17,767
I like the black and white,
but I do wanna see a pop
of color every now and then.
675
00:24:17,767 --> 00:24:19,266
-Yeah.
-[Kelly] Okay. Okay.
676
00:24:19,266 --> 00:24:21,467
[Drew] Sheryl and Jasperare experienced investors.
677
00:24:21,467 --> 00:24:23,600
They don't need us to providea lot of materials,
678
00:24:23,600 --> 00:24:25,266
like some other investorsthat we back.
679
00:24:25,266 --> 00:24:27,767
[Jonathan] We don't thinkthat would be a good useof our resources.
680
00:24:27,767 --> 00:24:30,000
They need mentorshipmore than anything.
681
00:24:30,000 --> 00:24:32,667
So, Drew and I are gonnacover the cost of Kellyand Donnie's services
682
00:24:32,667 --> 00:24:34,266
for the next ten weeks.
683
00:24:34,266 --> 00:24:35,867
If Donnie and Kelly
can't handle it,
684
00:24:35,867 --> 00:24:37,533
I don't think
anybody can handle it.
685
00:24:39,867 --> 00:24:42,033
[upbeat instrumental music]
686
00:24:44,266 --> 00:24:46,000
[Jonathan] This triplexis Sheryl and Jasper's
687
00:24:46,000 --> 00:24:47,600
first evercommercial property.
688
00:24:47,600 --> 00:24:48,900
-Hey. How are you guys?
-[Sheryl] Hey. How are you?
689
00:24:48,900 --> 00:24:50,433
-Hello!
-Good.
690
00:24:50,433 --> 00:24:52,367
[Jonathan] Meetingsome of the code requirementsset their schedule back,
691
00:24:52,367 --> 00:24:54,600
and they still havesome inspections to pass.
692
00:24:54,600 --> 00:24:57,467
All three units of the triplexare at different stages.
693
00:24:57,467 --> 00:25:00,200
Donnie and Kellycan only be herefor ten weeks,
694
00:25:00,200 --> 00:25:04,266
so we're counting on Donnie'sproject management skillsto get this done on time.
695
00:25:04,266 --> 00:25:06,567
[Donnie] So, I noticed
that one unit was insulated
696
00:25:06,567 --> 00:25:07,433
and they're coming
to inspect that.
697
00:25:07,433 --> 00:25:08,867
But do they do that
unit by unit or...
698
00:25:08,867 --> 00:25:10,767
I'm hoping
he can look at one
699
00:25:10,767 --> 00:25:12,867
and give us a pass.
I don't know
until he gets here.
700
00:25:12,867 --> 00:25:15,467
We never know
who we're gonna get
and what it's gonna be.
701
00:25:15,467 --> 00:25:17,467
[Jonathan] If you wanna get inthe real estate game,
702
00:25:17,467 --> 00:25:20,867
you are gonna figure outreal fast, fair doesn't exist.
703
00:25:20,867 --> 00:25:22,900
Anybody could come in,whether it's an inspector,
704
00:25:22,900 --> 00:25:24,700
planning department,whatever it is,
705
00:25:24,700 --> 00:25:26,300
and they can change rules,
706
00:25:26,300 --> 00:25:28,600
they can make decisions
that impact your bottom line.
707
00:25:28,600 --> 00:25:31,567
[Donnie] In order to hit
our critical deadlines,
708
00:25:31,567 --> 00:25:33,033
I wanna help you
in three ways.
709
00:25:33,033 --> 00:25:36,600
If one is schedule,
which I think you have
a very, like, linear schedule.
710
00:25:36,600 --> 00:25:39,000
But it needs to be flexible
and lot more detailed
711
00:25:39,000 --> 00:25:40,667
so that, if things
move forward or back,
712
00:25:40,667 --> 00:25:42,100
-we can easily adjust.
-Okay.
713
00:25:42,100 --> 00:25:44,367
And then, second,
we need to amortize materials,
714
00:25:44,367 --> 00:25:45,967
which I know
we're going over with Kelly.
715
00:25:45,967 --> 00:25:49,066
Amortizing the materials,
I have issues with
716
00:25:49,066 --> 00:25:52,100
because I drywall and, then,
I come in and look at it
717
00:25:52,100 --> 00:25:54,166
and, then, I start designing
at that point.
718
00:25:54,166 --> 00:25:56,200
But that's not
what we should be doing.
719
00:25:56,200 --> 00:25:58,467
It should be done before,
is what you're saying?
720
00:25:58,467 --> 00:25:59,800
Especially with this one
being so behind schedule
721
00:25:59,800 --> 00:26:03,467
and critical that you guys
stay the course
for financial reasons
722
00:26:03,467 --> 00:26:05,700
-and for many other reasons.
-[chuckling] Okay. All right.
723
00:26:05,700 --> 00:26:08,567
[Donnie] Not orderingdesign materialsuntil the drywall is up
724
00:26:08,567 --> 00:26:09,800
is a huge mistake.
725
00:26:09,800 --> 00:26:11,667
It can leave your projectssitting for weeks
726
00:26:11,667 --> 00:26:13,467
while you're waitingfor product to come in.
727
00:26:13,467 --> 00:26:14,867
-[Sheryl] Hi, Humberto!
-[Humberto] Hi, Sheryl.
728
00:26:14,867 --> 00:26:16,634
-[Jasper] Hello!
-[Humberto] Hello.
729
00:26:16,634 --> 00:26:19,567
-[Donnie] Oh, we got tile guy.
-[Sheryl] We have tile, yeah.
We're getting ready for that.
730
00:26:19,567 --> 00:26:21,100
-Got all your measurements?
-Yup.
731
00:26:21,100 --> 00:26:24,767
-Okay. So, we'll just
tile this wall here.
-[Humberto] Okay.
732
00:26:24,767 --> 00:26:26,567
And shower pavement
is small tile?
733
00:26:26,567 --> 00:26:28,166
-Yeah, two-by-two.
-Okay, two-by-two. Okay.
734
00:26:28,166 --> 00:26:29,367
-Yeah. That, for sure.
-Got it.
735
00:26:29,367 --> 00:26:32,266
-And then this wall. Here.
-Okay.
736
00:26:32,266 --> 00:26:33,567
We have 13 bathrooms.
737
00:26:33,567 --> 00:26:34,700
How long
do you think it'll take?
738
00:26:34,700 --> 00:26:37,266
-One month and a half,
something like that.
-A month?
739
00:26:37,266 --> 00:26:38,800
-[laughing] Yeah,
a month or two.
-[Sheryl] Humberto.
740
00:26:38,800 --> 00:26:40,800
Yeah, it's a lot of work.
741
00:26:43,667 --> 00:26:44,800
[Sheryl] How long do you think
it'll take you?
742
00:26:44,800 --> 00:26:46,433
-One month and a half,
something like that.
-A month?
743
00:26:46,433 --> 00:26:49,900
Is there an opportunity
to bring in multiple crews
and kind of stack them up?
744
00:26:49,900 --> 00:26:51,000
[Humberto] Yup.
Yeah, I like that.
745
00:26:51,000 --> 00:26:52,867
Okay. How many crews
would you bring?
746
00:26:52,867 --> 00:26:55,967
Eight guys
working the four bathrooms
at a time.
747
00:26:55,967 --> 00:26:58,767
-Four. So, basically,
one unit, one unit, one unit.
-One unit, yup.
748
00:26:58,767 --> 00:26:59,834
[Donnie] I think
that's a great plan,
749
00:26:59,834 --> 00:27:01,900
which I would say
they would come into
unit three
750
00:27:01,900 --> 00:27:03,500
-to stake his drywalls
further there.
-[Sheryl] Right.
751
00:27:03,500 --> 00:27:04,700
So, as we stack them,
752
00:27:04,700 --> 00:27:06,767
-making sure they have
enough room to work as well.
-Okay.
753
00:27:06,767 --> 00:27:08,400
[Donnie] So, by Monday,
we would need to have
754
00:27:08,400 --> 00:27:11,066
-all our materials here
and ready for you?
-Yup.
755
00:27:11,066 --> 00:27:14,166
So, we'll just have to work
with Kelly and get that
in our schedule, too,
756
00:27:14,166 --> 00:27:15,600
and have a stack in each unit.
757
00:27:15,600 --> 00:27:17,767
So boom, boom, boom,
we can get going.
758
00:27:17,767 --> 00:27:20,867
-We have a meeting
with her next. [chuckles]
-[Donnie] Yes. Let's do it.
759
00:27:20,867 --> 00:27:22,200
-Okay.
-Okay.
760
00:27:22,200 --> 00:27:25,000
[intriguing
instrumental music]
761
00:27:32,500 --> 00:27:35,100
[Kelly] I am takingSheryl and Jasperto a stone yard.
762
00:27:35,100 --> 00:27:38,000
They are way behind schedulewith a ballooning budget,
763
00:27:38,000 --> 00:27:40,767
so I really need to teach themhow to changetheir spending habits,
764
00:27:40,767 --> 00:27:42,567
and I need to do it fast.
765
00:27:42,567 --> 00:27:45,867
They're gonna pick outtheir countertops,and I wanna show Sheryl
766
00:27:45,867 --> 00:27:49,367
how she can still getthose gorgeous slabsthat she wants,
767
00:27:49,367 --> 00:27:50,700
but still staywithin budget.
768
00:27:50,700 --> 00:27:53,166
They have this amazing
back warehouse
769
00:27:53,166 --> 00:27:54,500
that I don't thinkshe knew about,
770
00:27:54,500 --> 00:27:57,567
and it's an easy way for us
to get that return
on our investment
771
00:27:57,567 --> 00:27:59,100
without spendinga gazillion dollars.
772
00:27:59,100 --> 00:28:01,467
-Slabs as far as
we can see, right?
-Yes.
773
00:28:01,467 --> 00:28:04,300
[Kelly] This is not
the section that we're
going to be purchasing from.
774
00:28:04,300 --> 00:28:05,266
-[Jasper] No?
-[Sheryl] Okay.
775
00:28:05,266 --> 00:28:08,100
This section here
is the expensive section.
776
00:28:08,100 --> 00:28:09,867
-[Sheryl] Okay.
-[Kelly] Natural stone
is the most expensive,
777
00:28:09,867 --> 00:28:11,033
so we're not gonna use that.
778
00:28:11,033 --> 00:28:14,567
I absolutely love
the back room
in the stone warehouse
779
00:28:14,567 --> 00:28:16,867
because it is where
you find the best deals.
780
00:28:16,867 --> 00:28:17,934
The same quality materials
781
00:28:17,934 --> 00:28:19,500
-as the stuff we'll find
out there.
-[Sheryl] Right.
782
00:28:19,500 --> 00:28:20,734
-[Jasper] Okay.
-[Kelly] It's just less of it.
783
00:28:20,734 --> 00:28:23,200
-[Jasper] Oh, okay.
-So, this has a chunk
taken out of it.
784
00:28:23,200 --> 00:28:25,266
So, obviously,
we can't use this
as a full slab.
785
00:28:25,266 --> 00:28:27,066
-[Sheryl] All right.
-Let's just say
we wanted to cut it off.
786
00:28:27,066 --> 00:28:28,400
We could use it as an island.
787
00:28:28,400 --> 00:28:30,767
-We could use it as
a vanity top if we chose to.
-[Jasper] Yeah.
788
00:28:30,767 --> 00:28:34,767
No, that makes so much sense,
'cause we would've definitely
just walked right past it.
789
00:28:34,767 --> 00:28:37,867
You know what?
I always look for things
with imperfections like that.
790
00:28:37,867 --> 00:28:39,166
I like something like this.
791
00:28:39,166 --> 00:28:41,100
-[Jasper] Oh, I like this.
-[Sheryl] This one?
792
00:28:41,100 --> 00:28:43,667
I like it, but everyone
has this in their home.
793
00:28:43,667 --> 00:28:45,567
This is definitely
not gonna set us apart.
794
00:28:45,567 --> 00:28:48,700
You can have five new homes
and they all have
the same things.
795
00:28:48,700 --> 00:28:51,400
What I want in my properties
is something different.
796
00:28:51,400 --> 00:28:52,567
You wanna build
for the masses,
797
00:28:52,567 --> 00:28:55,000
-but you also wanna have
your own identity.
-[Sheryl] Yes.
798
00:28:55,000 --> 00:28:57,667
-And, so, you want something
that looks custom...
-Yes.
799
00:28:57,667 --> 00:29:00,066
-[Kelly] ...but doesn't have
a custom price tag.
-Exactly. You're right.
800
00:29:00,066 --> 00:29:02,266
We'll just avoid the stuff
that makes it look
cookie cutter,
801
00:29:02,266 --> 00:29:03,200
-like that.
-Okay. Yes.
802
00:29:03,200 --> 00:29:05,667
Whereas this one right here...
803
00:29:05,667 --> 00:29:06,967
-[Jasper] Ooh!
-[Sheryl] Oh!
804
00:29:06,967 --> 00:29:09,100
Well, I think
we might have found something.
805
00:29:09,100 --> 00:29:10,800
-I'm loving this.
-[Jasper] I love that.
806
00:29:10,800 --> 00:29:14,200
-The colors and the movement,
oh, my gosh.
-You love this.
807
00:29:14,200 --> 00:29:16,467
-[Sheryl] I love it. Yes.
-[Jasper] Yeah.
808
00:29:16,467 --> 00:29:19,100
-When you look here,
there's only two slabs.
-Okay.
809
00:29:19,100 --> 00:29:21,266
I'm assuming that this is
probably all they have left.
810
00:29:21,266 --> 00:29:23,867
-[Sheryl] Okay.
-And this is the reason
why it's in here.
811
00:29:23,867 --> 00:29:25,500
-[both exclaiming]
-Which means this is how
we're gonna get the discount.
812
00:29:25,500 --> 00:29:26,900
-Okay.
-[Kelly] Slab one.
813
00:29:26,900 --> 00:29:29,400
-[Jasper] Slab one. Okay,
we're making some progress.
-[Kelly] Okay?
814
00:29:29,400 --> 00:29:32,367
We have three units,
so we're using two of these?
Are we using one of these?
815
00:29:32,367 --> 00:29:34,066
-Let's use two of those.
-Okay.
816
00:29:34,066 --> 00:29:36,000
-So, let's go
around the corner.
-[Sheryl] Okay.
817
00:29:36,000 --> 00:29:37,900
There's one that looks
exactly like this.
818
00:29:37,900 --> 00:29:40,400
-[Sheryl] Okay, let's see it.
-[Kelly] And it's also
porcelain, which is good.
819
00:29:40,400 --> 00:29:43,400
Kelly has opened up our eyes
to a whole new world.
820
00:29:43,400 --> 00:29:46,166
It's gonna make
a huge difference
going forward for us.
821
00:29:46,166 --> 00:29:49,567
Natural stone
is so very difficult
to have with renters...
822
00:29:49,567 --> 00:29:51,767
-Right.
-...because you have to
seal it all the time.
823
00:29:51,767 --> 00:29:53,467
And if you don't do that,
then it's damaged.
824
00:29:53,467 --> 00:29:57,667
-But this one,
which I saw before...
-Okay, I like it.
825
00:29:57,667 --> 00:29:58,967
-...is porcelain.
-Yes.
826
00:29:58,967 --> 00:30:02,667
Super durable.
A little less busy
than the other, which I like.
827
00:30:02,667 --> 00:30:06,200
So, we can do two of the slabs
that we found in there.
828
00:30:06,200 --> 00:30:08,367
-[both] Okay.
-And, then, we'll do
one of these.
829
00:30:08,367 --> 00:30:10,900
-[Sheryl] Yes.
-All being porcelain,
super-durable,
830
00:30:10,900 --> 00:30:12,033
renter-friendly.
831
00:30:12,033 --> 00:30:13,867
-[Sheryl] It's beautiful.
-[Jasper] No, it's perfect.
832
00:30:13,867 --> 00:30:16,000
I think we knocked
this back warehouse
out of the park.
833
00:30:16,000 --> 00:30:18,767
[all cheering]
834
00:30:18,767 --> 00:30:21,567
I mean, you did so good.
835
00:30:21,567 --> 00:30:23,967
[all] Go to
the back warehouse!
836
00:30:23,967 --> 00:30:25,266
-[Sheryl] Got it.
-[all laughing]
837
00:30:25,266 --> 00:30:27,200
-All right.
-[Sheryl] Going forward,it's gonna be exciting
838
00:30:27,200 --> 00:30:30,700
to give our buyers,
or renters, quality
839
00:30:30,700 --> 00:30:32,800
without paying a lot for it.
840
00:30:32,800 --> 00:30:36,433
We're reeling you in,
but we're not compromising
on quality.
841
00:30:40,667 --> 00:30:42,900
[intriguing
instrumental music]
842
00:30:44,100 --> 00:30:45,634
[cell phone ringing]
843
00:30:46,667 --> 00:30:47,734
[Jonathan] Hey,
what's happening?
844
00:30:47,734 --> 00:30:49,767
[Donnie on call] Callingwith not the best news.
845
00:30:49,767 --> 00:30:51,767
The problemsthat Sheryl's having
846
00:30:51,767 --> 00:30:55,200
with the conversionbetween residentialand commercial building,
847
00:30:55,200 --> 00:30:59,266
well, they came backafter approvingher fire sprinkler system.
848
00:30:59,266 --> 00:31:02,967
And the inspector noticesthat there wasn'tthe precaution
849
00:31:02,967 --> 00:31:06,066
taken on these shared wallsto keep fire from jumping.
850
00:31:06,066 --> 00:31:08,200
The drywall in the first unitwas complete.
851
00:31:08,200 --> 00:31:10,200
Now, some of thathas to be walked back
852
00:31:10,200 --> 00:31:12,667
and make sure, you know,we've got all the plugsand electrical
853
00:31:12,667 --> 00:31:14,100
wrapped with fireproofing.
854
00:31:14,100 --> 00:31:16,467
So, I'm just worriedabout timeline.
855
00:31:16,467 --> 00:31:18,166
How much of our drywall
do we have to undo?
856
00:31:18,166 --> 00:31:19,200
[Donnie] 20%.
857
00:31:19,200 --> 00:31:21,800
But we are lookingat a good three-week delay.
858
00:31:21,800 --> 00:31:23,467
[groans]
859
00:31:27,600 --> 00:31:29,367
[Donnie] We are lookingat a good three-weekdelay on the timeline.
860
00:31:29,367 --> 00:31:31,000
[groans]
861
00:31:31,000 --> 00:31:32,533
[Donnie] It just feels likewe're getting a littlefurther and further behind.
862
00:31:32,533 --> 00:31:33,900
[Jonathan] We can't have that,
'cause we only have you
for ten weeks.
863
00:31:33,900 --> 00:31:36,000
Then, we're moving you
on to another project.
864
00:31:36,000 --> 00:31:37,967
Okay. I mean,
that has to get done
865
00:31:37,967 --> 00:31:38,800
if that's what
they're calling for.
866
00:31:38,800 --> 00:31:40,800
We are gonna be readyto attack it
867
00:31:40,800 --> 00:31:43,767
from a perspective of havingeverything on siteready to go.
868
00:31:43,767 --> 00:31:46,367
-Okay, sounds good.
Thanks for letting me know.
-[Donnie] All right.
869
00:31:46,367 --> 00:31:47,900
-Bye.
-[Donnie] Talk to you soon.
870
00:31:49,166 --> 00:31:51,767
[Jonathan] Our ten-weektimeline just became 13
871
00:31:51,767 --> 00:31:54,667
while we doall the electrical upgradesto pass inspection,
872
00:31:54,667 --> 00:31:56,967
which is unfortunate,'cause that's gonna costDrew and me
873
00:31:56,967 --> 00:32:00,200
to cover the construction
manager and designer
for that extra three weeks.
874
00:32:01,100 --> 00:32:03,266
We're gonna see this project
through to the end.
875
00:32:03,266 --> 00:32:07,133
It's just a mistake
that is gonna cost us
a lot of time and money.
876
00:32:08,767 --> 00:32:10,300
[upbeat instrumental music]
877
00:32:14,467 --> 00:32:16,367
Do you remember
Isabel and James?
878
00:32:16,367 --> 00:32:18,367
They had the vacation property
in NoHo.
879
00:32:18,367 --> 00:32:19,800
-How could I forget?
-Five kids.
880
00:32:19,800 --> 00:32:21,367
They were a little stubborn.
They didn't listen to us
881
00:32:21,367 --> 00:32:23,000
with a lot of things
that would have been helpful.
882
00:32:23,000 --> 00:32:24,700
James. Nice to meet you.
Thank you for coming.
883
00:32:24,700 --> 00:32:27,066
Our goal with this propertywas to buildan apartment building.
884
00:32:27,066 --> 00:32:31,066
After spending tons of money,
the city eventually said no.
885
00:32:31,066 --> 00:32:32,166
And it cost you how much?
886
00:32:32,166 --> 00:32:34,667
-Over $100,000.
-Oh, my gosh!
887
00:32:34,667 --> 00:32:35,800
[Jonathan] You did nottake our advice.
888
00:32:35,800 --> 00:32:38,300
You framed for five bedrooms.You didn't go for four.
889
00:32:38,300 --> 00:32:40,000
They weren't paying for it,
we are.
890
00:32:40,000 --> 00:32:44,166
I was talking to them,
and the rental
has been totally successful.
891
00:32:44,166 --> 00:32:47,100
Constantly booked up.
They've recouped
a lot of that income.
892
00:32:47,100 --> 00:32:49,266
They actually
were able to pull out
a bunch of the money.
893
00:32:49,266 --> 00:32:50,900
And, now,
they're in a position
894
00:32:50,900 --> 00:32:53,100
where they have some fundsto get another place.
895
00:32:53,100 --> 00:32:56,166
Oh, my gosh,
you guys! Incredible!
896
00:32:56,166 --> 00:32:59,567
When we met, their originalgoal was to finda multi-unit property.
897
00:32:59,567 --> 00:33:01,000
They're alreadyout there looking.
898
00:33:01,000 --> 00:33:02,767
They didn't outrightask for help.
899
00:33:02,767 --> 00:33:04,200
We can't say thank you enough.
900
00:33:04,200 --> 00:33:05,467
-[Isabel] Thank you.
-All right.
901
00:33:05,467 --> 00:33:06,767
[Jonathan] But I wannahelp them because we justgot them
902
00:33:06,767 --> 00:33:08,767
out of this hugefinancial hole.
903
00:33:08,767 --> 00:33:10,467
I don't want themfalling into a new one.
904
00:33:10,467 --> 00:33:13,567
It would be nice
to actually be able
to give them a little guidance
905
00:33:13,567 --> 00:33:15,467
with what they were
actually trying
to get into originally,
906
00:33:15,467 --> 00:33:17,100
with a multi-family property.
907
00:33:17,100 --> 00:33:19,266
We're waiting on Sheryl's
triplex inspection.
908
00:33:19,266 --> 00:33:21,967
So, if you wanna carve out
some time to help them,
go for it.
909
00:33:21,967 --> 00:33:22,967
[Jonathan] Sure.
910
00:33:22,967 --> 00:33:25,233
[intriguing
instrumental music]
911
00:33:30,567 --> 00:33:35,667
James and Isabel have $345,000total for a down paymentand renovations
912
00:33:35,667 --> 00:33:40,600
for what is, or could become,a multi-family rentalwith zero zoning issues.
913
00:33:40,600 --> 00:33:43,266
Drew sent some listings,and they've already seensome of those.
914
00:33:43,266 --> 00:33:45,767
But there are two propertiesthat really caught their eye.
915
00:33:45,767 --> 00:33:47,467
With their budget,and being in LA,
916
00:33:47,467 --> 00:33:49,700
they're severely limitedon what's out there.
917
00:33:49,700 --> 00:33:53,100
But I'm showing them
the property I would invest in
if it was me.
918
00:33:53,100 --> 00:33:56,567
This is three units,one bed, one bathin the back.
919
00:33:56,567 --> 00:33:58,767
There's two of those.And, then, there's a studioup front.
920
00:33:58,767 --> 00:34:01,467
1.295 for the list price.
921
00:34:01,467 --> 00:34:02,967
-Why don't we hop in
and we'll take a look?
-Let's see.
922
00:34:02,967 --> 00:34:06,867
[James] Now thatwe've come out ahead on thatalmost-disaster property,
923
00:34:06,867 --> 00:34:09,767
what's really at stake for us
with this new
investment search
924
00:34:09,767 --> 00:34:12,100
is not getting
another dud property.
925
00:34:12,100 --> 00:34:15,800
We need to find one
that will make money,
not cost us money.
926
00:34:15,800 --> 00:34:18,100
Absolutely. We can't get into
that again.
927
00:34:18,700 --> 00:34:20,900
Uh-huh. Wow, okay.
928
00:34:20,900 --> 00:34:22,667
[James] Well,
this is a nice studio.
929
00:34:22,667 --> 00:34:25,600
When I think of a studio,
I think of the teeniest,
tiniest space.
930
00:34:25,600 --> 00:34:29,500
I lived in a studio
in South Korea for a year,
and I'm not joking,
931
00:34:29,500 --> 00:34:32,166
-it was, like,
200 square feet.
-Well, this is much bigger.
932
00:34:32,166 --> 00:34:34,867
So, it's like,
this has an actual kitchen.
933
00:34:34,867 --> 00:34:36,667
[Jonathan] Usually,
when I come into a building,
934
00:34:36,667 --> 00:34:39,767
I'm looking at something
that's gonna rent right away,
and rent fast.
935
00:34:39,767 --> 00:34:42,166
-Well, your walkability
is great right here.
-[James] Yeah.
936
00:34:42,166 --> 00:34:45,567
The size is good.
This will actually be
quite nice for somebody.
937
00:34:45,567 --> 00:34:47,667
Current comps right noware about $1,800.
938
00:34:47,667 --> 00:34:50,867
The one advantage you havewith this buildingis it's completely vacant.
939
00:34:50,867 --> 00:34:55,000
Whatever you want to target
for your rent, now is the time
to do it.
940
00:34:55,000 --> 00:34:56,367
[James] What I look forin an investment property
941
00:34:56,367 --> 00:34:58,166
is simply its ability
to make money.
942
00:34:58,166 --> 00:35:01,000
I don't care if it's pretty.I don't care where it is.
943
00:35:01,000 --> 00:35:03,400
If it's gonna make money,
then that's a good investment.
944
00:35:03,400 --> 00:35:06,000
So, this one's furnished
a little bit.
945
00:35:06,000 --> 00:35:10,300
Studio unit was 435.
These are 522.
946
00:35:10,300 --> 00:35:13,767
This is the unit
that would require
a new kitchen.
947
00:35:13,767 --> 00:35:16,300
These cabinets look like
they're about to fall off
the wall, so...
948
00:35:16,300 --> 00:35:18,500
I mean, we could just paint
the original cabinets
949
00:35:18,500 --> 00:35:21,767
and, then,
put new upper cabinets.
That would save money.
950
00:35:21,767 --> 00:35:23,667
[Jonathan] I would probably
keep it in the budget
951
00:35:23,667 --> 00:35:27,667
to do really nice kitchen
in here for 30 grand.
952
00:35:27,667 --> 00:35:32,867
I usually end up doing
a little bit more up front
than I probably need to do
953
00:35:32,867 --> 00:35:35,867
because I like to know
that a tenant's gonna come in,
have a little bit of pride
954
00:35:35,867 --> 00:35:38,266
in where they live,
and they'll stay longer.
955
00:35:38,266 --> 00:35:41,767
I think this is one of those
Jonathan suggestions
956
00:35:41,767 --> 00:35:44,600
-that we may not take.
-[James] Yes.
957
00:35:44,600 --> 00:35:47,266
-And, then, the bedrooms
actually are really nice.
-It's sizeable.
958
00:35:47,266 --> 00:35:49,367
[James] Big
for this space, yeah.
959
00:35:49,367 --> 00:35:52,200
-[Jonathan] Bathroom
is what it is.
-[Isabel] Needs work.
960
00:35:52,200 --> 00:35:56,000
[Jonathan] This would be
pretty easy to clean it all up
and make it really shine.
961
00:35:56,000 --> 00:35:57,700
All right,
let's check downstairs.
962
00:35:57,700 --> 00:36:00,066
This propertyis not necessarily turnkey.
963
00:36:00,066 --> 00:36:01,700
There's still a bit of workthat has to happen.
964
00:36:01,700 --> 00:36:03,367
A kitchenthat needs to be redone.
965
00:36:03,367 --> 00:36:05,000
But it's not like this is
a six-month renovation.
966
00:36:05,000 --> 00:36:09,133
They could get in here,rent some of these units,be cash positive right away.
967
00:36:09,667 --> 00:36:10,867
This one's also furnished.
968
00:36:10,867 --> 00:36:14,166
This actually looks
more spacious
than the one upstairs.
969
00:36:14,166 --> 00:36:16,700
It's a slightly different
footprint. It doesn't have
the breakfast bar.
970
00:36:16,700 --> 00:36:19,066
[James] It's a little darker
than the upstairs one,
being down.
971
00:36:19,066 --> 00:36:21,100
This is a really big couch
for the room,
972
00:36:21,100 --> 00:36:23,767
-but it shows you could have
all of your friends over.
-[Jonathan] Exactly.
973
00:36:23,767 --> 00:36:26,300
-It's a tight kitchen.
It's pretty functional.
-[Isabel] It's very European.
974
00:36:26,300 --> 00:36:28,667
Yeah. The one thing
on a building like this
975
00:36:28,667 --> 00:36:30,767
that I would dive into
and double check is,
976
00:36:30,767 --> 00:36:33,266
I'd make sure
that there wasn't
any unpermitted work.
977
00:36:33,266 --> 00:36:37,500
I can tell
there's no hood here,
so no inspector came through.
978
00:36:37,500 --> 00:36:38,900
I'd look at the power
979
00:36:38,900 --> 00:36:42,066
and the connections
and see how everything
was done.
980
00:36:42,066 --> 00:36:45,367
If you started upgrading
all of the electrical,
981
00:36:45,367 --> 00:36:47,767
you're looking
at another 20 grand.
982
00:36:47,767 --> 00:36:51,100
[James] It's charming,it's romantic,but it needs work.
983
00:36:51,100 --> 00:36:53,000
-We might have to spend
too much money on this one...
-Too much.
984
00:36:53,000 --> 00:36:55,900
-...and the whole point
of this is to make money.
-Absolutely.
985
00:36:55,900 --> 00:36:58,800
Overall, the building
is in pretty great shape.
986
00:36:58,800 --> 00:37:02,767
Right off the bat,you'd be makingabout $1,800 for the studio,
987
00:37:02,767 --> 00:37:04,967
and about $2,200for the one-bedrooms.
988
00:37:04,967 --> 00:37:08,300
You'd be clearing75 grand annually.
989
00:37:08,300 --> 00:37:11,567
$195,000 down,plus 150 grand into it.
990
00:37:11,567 --> 00:37:16,200
I don't think I'd put 50 grand
into it. I would go for
as little as possible.
991
00:37:16,200 --> 00:37:19,667
I'm not attracted to the idea
of investing money into it.
992
00:37:19,667 --> 00:37:23,767
-If we're gonna buy this,
I want to rent it right away.
-I agree.
993
00:37:23,767 --> 00:37:26,500
-Hey, hey! Got a minute?
-[Drew on call] I do.
994
00:37:26,500 --> 00:37:28,467
So, I just finished touring
995
00:37:28,467 --> 00:37:30,166
James and Isabel
through a couple
of properties.
996
00:37:30,166 --> 00:37:33,867
-[Drew] Okay.
-And I can tell that they're
not really listening to me.
997
00:37:33,867 --> 00:37:37,100
They dream up in their head
this exact thing
that they're looking for
998
00:37:37,100 --> 00:37:40,367
and, then, they're trying
to materialize it
in the world.
999
00:37:40,367 --> 00:37:41,667
Not how the world works.
1000
00:37:41,667 --> 00:37:43,667
You're gonna have to do
a little bit of work
1001
00:37:43,667 --> 00:37:45,600
to any building
that you pick up.
1002
00:37:51,000 --> 00:37:52,166
Not how the world works.
You're gonna have to do
1003
00:37:52,166 --> 00:37:54,166
a little bit of work
to any building
that you pick up.
1004
00:37:54,166 --> 00:37:56,567
[Drew on call] Yeah, honestly,it's fine. I'll get yousome more options.
1005
00:37:56,567 --> 00:37:59,500
I'll maybe find you onethat's a different location,
1006
00:37:59,500 --> 00:38:01,066
something a littlecheaper, possibly.
1007
00:38:01,066 --> 00:38:03,300
Minimal work
needing to be done.
1008
00:38:03,300 --> 00:38:06,000
[Drew] To each their own,but we'll find somethingthat could work.
1009
00:38:06,000 --> 00:38:07,867
If you can find it,
I'll tour it.
1010
00:38:07,867 --> 00:38:09,667
-[Drew] All right. Ciao.
-All right. Ciao.
1011
00:38:09,667 --> 00:38:11,400
[upbeat instrumental music]
1012
00:38:13,066 --> 00:38:15,867
James and Isabel are hesitantabout taking onanother renovation,
1013
00:38:15,867 --> 00:38:20,266
but they're forgettingthat if they renovate now,they're gonna get higher rent
1014
00:38:20,266 --> 00:38:22,266
and the value of the building
is gonna be higher
1015
00:38:22,266 --> 00:38:24,000
if they do ever go
to resell in the future.
1016
00:38:24,000 --> 00:38:26,767
But, right now,I'm showing them a propertyin North Hollywood.
1017
00:38:26,767 --> 00:38:31,000
This is a five-bedroom,two-bathroom home,with a double garage.
1018
00:38:31,000 --> 00:38:34,667
You could walk in here
right now, with no money
out of pocket for renovation.
1019
00:38:34,667 --> 00:38:37,367
You would get
about $63,000 a year rent.
1020
00:38:37,367 --> 00:38:40,400
But if you're willing
to do work, and if you have
a little patience,
1021
00:38:40,400 --> 00:38:42,367
you could almost double
what you get
out of this place.
1022
00:38:42,367 --> 00:38:44,133
-Double?
-[all laughing]
1023
00:38:45,367 --> 00:38:46,467
[Jonathan] Okay.
1024
00:38:46,467 --> 00:38:48,567
-Wow.
-So, pretty good size.
1025
00:38:48,567 --> 00:38:52,266
Yeah! You walk in,
it's open, you see
right into the kitchen.
1026
00:38:52,266 --> 00:38:54,000
[Jonathan] The space itself,
this is an interesting one.
1027
00:38:54,000 --> 00:38:56,900
So, legally,
this is a single-family home.
1028
00:38:56,900 --> 00:38:59,266
-[Isabel] Okay.
-Five bedrooms,
two bathrooms.
1029
00:38:59,266 --> 00:39:01,667
However, the way
it's laid out,
1030
00:39:01,667 --> 00:39:04,500
you could actually divide it
into two separate suites
1031
00:39:04,500 --> 00:39:07,000
by just closing this off
and adding a kitchen
in the back.
1032
00:39:07,000 --> 00:39:08,200
-[Isabel] Wow.
-Okay.
1033
00:39:08,200 --> 00:39:10,567
That would give you
a three-bed, one-bath
at the front,
1034
00:39:10,567 --> 00:39:12,767
-and a two-bed,
one-bath at the back.
-That's really good.
1035
00:39:12,767 --> 00:39:14,266
[Jonathan] So,
for your kitchen...
1036
00:39:14,266 --> 00:39:16,700
I think this is
an attractive kitchen
to a renter.
1037
00:39:16,700 --> 00:39:19,867
-It's open to the living room.
-[Isabel] For renting,
it's quite okay.
1038
00:39:19,867 --> 00:39:20,734
[James] Yeah.
1039
00:39:20,734 --> 00:39:22,767
Down the hall,
there's three bedrooms.
1040
00:39:22,767 --> 00:39:27,100
This is a prime example
of somebody who has divided up
1041
00:39:27,100 --> 00:39:29,667
what was probably, originally,
fewer bedrooms.
1042
00:39:29,667 --> 00:39:31,800
If you did split this off,
1043
00:39:31,800 --> 00:39:35,600
it would be a three-bedroom,
one-bath up front here,
1044
00:39:35,600 --> 00:39:37,667
-but they are very small.
-Yeah.
1045
00:39:37,667 --> 00:39:39,600
[Jonathan] This would not work
for some people.
1046
00:39:39,600 --> 00:39:42,166
Bathroom has had
some not great work done.
1047
00:39:42,166 --> 00:39:44,367
You can see, they reduced
the window at one point.
1048
00:39:44,367 --> 00:39:46,767
I don't think you could expect
premium rent.
1049
00:39:46,767 --> 00:39:49,667
It's not luxury,
but it is functional.
1050
00:39:49,667 --> 00:39:52,266
-Then, if you go down
this hallway...
-[James] All right.
1051
00:39:52,266 --> 00:39:54,266
[Jonathan] So,
this is two beds,
one bath down here.
1052
00:39:54,266 --> 00:39:56,800
Look at the size
of the bedrooms back here.
Bigger closet.
1053
00:39:56,800 --> 00:39:58,266
[James] Bigger bathroom.
1054
00:39:58,266 --> 00:40:00,100
If you rented this
as a five-bedroom,
1055
00:40:00,100 --> 00:40:01,367
you're only gonna getabout 63 grand.
1056
00:40:01,367 --> 00:40:03,767
You rent thisas two separate suites,
1057
00:40:03,767 --> 00:40:07,200
you'd actually get closerto $85,000 a year.
1058
00:40:07,200 --> 00:40:09,767
-[Isabel] Oh, yeah. Wow.
-[Jonathan] Look at the size
of this yard.
1059
00:40:09,767 --> 00:40:11,567
-[Isabel] Wow.
-[James] And
it's low-maintenance.
1060
00:40:11,567 --> 00:40:15,467
It could be split
down the middle for this unit
and for these folks, too.
1061
00:40:15,467 --> 00:40:17,567
[Jonathan] There's definitely
opportunity here.
1062
00:40:17,567 --> 00:40:21,767
My estimate is, you could have
everything done legally
1063
00:40:21,767 --> 00:40:23,800
and finished
in less than six months.
1064
00:40:23,800 --> 00:40:25,367
The permits would take
the longest time.
1065
00:40:25,367 --> 00:40:26,767
These propertiesthat we looked at
1066
00:40:26,767 --> 00:40:28,867
have something interestingin the numbers.
1067
00:40:28,867 --> 00:40:31,767
They have different risks,
but they also have
different rewards.
1068
00:40:31,767 --> 00:40:34,066
You're getting
a lot of square footage
for here.
1069
00:40:34,066 --> 00:40:38,266
And you're gettingbigger unitsfor significantly less money.
1070
00:40:38,266 --> 00:40:41,000
-[Isabel] Yes.
-[James] Each unit,you can rent it for more.
1071
00:40:41,000 --> 00:40:43,767
There's a lot you can do here.
North Hollywood is hot.
1072
00:40:43,767 --> 00:40:46,000
[James] And splitting itwould be pretty easy.
1073
00:40:46,000 --> 00:40:48,100
But given
our recent experience,
1074
00:40:48,100 --> 00:40:49,767
and getting stuck
in North Hollywood
1075
00:40:49,767 --> 00:40:53,100
with a property that doesn't
generate the income
that we wanted,
1076
00:40:53,100 --> 00:40:54,667
I would not invest here.
1077
00:40:54,667 --> 00:40:58,667
I wanna try a better area.
I love the Burbank property.
1078
00:40:58,667 --> 00:41:00,800
-It's cozy. It's quaint.
-[James] It's romantic.
1079
00:41:00,800 --> 00:41:02,166
[Isabel] Great area.
1080
00:41:02,166 --> 00:41:03,667
[Jonathan] Okay,but do you agree
1081
00:41:03,667 --> 00:41:06,000
that you have to spendon some renovations?
1082
00:41:06,000 --> 00:41:09,767
[James] I agree. I think
we could invest an appropriate
amount of money
1083
00:41:09,767 --> 00:41:12,567
to make people come in,
want to rent it
and, then, stay in it,
1084
00:41:12,567 --> 00:41:14,367
-and be happy.
-It would make me excited
to work on it.
1085
00:41:14,367 --> 00:41:15,900
It would make me excited
to rent it.
1086
00:41:15,900 --> 00:41:17,767
-It's a different type
of renter.
-Yeah.
1087
00:41:17,767 --> 00:41:20,600
Burbank, I think, is alwaysgoing to be rentable.
1088
00:41:20,600 --> 00:41:23,200
-And it's Burbank.
It's always gonna grow up.
-It's Burbank, it's nice.
1089
00:41:23,200 --> 00:41:24,800
-[Isabel] I wanna
put an offer.
-[James] I agree.
1090
00:41:24,800 --> 00:41:27,000
I think it's gonna be
the easiest to rent
and keep renters.
1091
00:41:27,000 --> 00:41:28,500
[Jonathan] Exactly. And that's
a good thing.
1092
00:41:28,500 --> 00:41:30,567
I love it when you guys
come together on a decision.
1093
00:41:30,567 --> 00:41:32,867
They went with Burbank,
which I think
is a great decision
1094
00:41:32,867 --> 00:41:35,266
because the value there
is solid.
1095
00:41:35,266 --> 00:41:38,400
Regardless of whether or notthey actually get this place,
1096
00:41:38,400 --> 00:41:40,200
as a mentor, I feela lot better
1097
00:41:40,200 --> 00:41:42,567
knowing I've given thema little extra guidance.
1098
00:41:42,567 --> 00:41:44,867
I feel like James and Isabel
have the tools that they need.
1099
00:41:44,867 --> 00:41:47,400
They're developing the skills
that are critical.
1100
00:41:47,400 --> 00:41:48,900
I just hope they continueto understand
1101
00:41:48,900 --> 00:41:52,100
the value of spendingthe right amount of moneyon their investments,
1102
00:41:52,100 --> 00:41:54,266
so they can continueto build their business.
1103
00:41:54,266 --> 00:41:57,500
[Isabel] This is what we dofor a living, to raiseour family,
1104
00:41:57,500 --> 00:42:00,066
to spend time with our kids,to spend time together.
1105
00:42:00,066 --> 00:42:01,600
It's a risky choice we made.
1106
00:42:01,600 --> 00:42:03,800
After feeling for
a really long time, defeated,
1107
00:42:03,800 --> 00:42:05,667
this is the first time
I feel excitement
1108
00:42:05,667 --> 00:42:08,300
-for moving on
into our next journey.
-Ah, yes. Yes.
1109
00:42:13,367 --> 00:42:16,266
Whether or not
we back an investor,
we like to stay in touch.
1110
00:42:16,266 --> 00:42:18,266
And we just heard
from Natalie and Sean.
1111
00:42:18,266 --> 00:42:20,667
Now, we gave them the advice,
"Reduce your spending."
1112
00:42:20,667 --> 00:42:23,800
Unfortunately, they increased
their reno budget
by 350 grand,
1113
00:42:23,800 --> 00:42:27,600
which means
their potential profit,
if they sell for 2.9 million,
1114
00:42:27,600 --> 00:42:29,000
will only be 400 grand.
1115
00:42:29,000 --> 00:42:30,767
So, not bad, not great.
1116
00:42:30,767 --> 00:42:33,000
Hopefully, on the next one,
they'll take our advice.
1117
00:42:33,000 --> 00:42:34,767
Next time on
Backed by the Bros...
1118
00:42:34,767 --> 00:42:38,066
The size that this project
has become, we're nowhere
near complete.
1119
00:42:38,066 --> 00:42:39,400
We're gonna lose
Donnie and Kelly.
1120
00:42:39,400 --> 00:42:41,000
They have to move onto other projects.
1121
00:42:41,000 --> 00:42:44,100
This is the kind of thingthat just reallykills a budget.
1122
00:42:44,100 --> 00:42:46,667
-[Jasper] We have a problem.
-[Sheryl] Where
are the closets?
1123
00:42:46,667 --> 00:42:49,500
-In all of the units.
-Oh, my goodness.
1124
00:42:49,500 --> 00:42:52,800
This is our family business,and we've put so muchinto this.
1125
00:42:52,800 --> 00:42:56,400
I'm nervous
to really see if it delivers
what my dream is.
1126
00:42:57,166 --> 00:42:58,367
Whoa.
98011
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