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Would you like to inspect the original subtitles? These are the user uploaded subtitles that are being translated: 1 00:00:01,100 --> 00:00:02,300 -...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 much have you wasted on 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 hunt for a multi-unit building 13 00:00:20,700 --> 00:00:23,467 for one of the first investors we backed, James and Isabel. 14 00:00:23,467 --> 00:00:26,166 I just finished touring James and Isabel through 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 want to help people get 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 flipped a house before. 22 00:00:41,700 --> 00:00:43,867 Had you rented it out from 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're looking at doing 30 00:00:55,400 --> 00:00:56,867 with this house seems 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 turn the 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 money by 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 good for our business. 49 00:01:43,266 --> 00:01:45,867 That's why we have to 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've bought the property, they're already renovating, 53 00:01:51,667 --> 00:01:54,000 and then we ask about their design or 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 to understand the market 62 00:02:08,066 --> 00:02:10,400 and you always have to play worst case scenario. 63 00:02:10,400 --> 00:02:14,266 Anyone who plans on best case scenario is 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 investors are in Valley Village. 66 00:02:18,166 --> 00:02:22,200 It's nestled between trendy neighborhoods like Studio City and NoHo. 67 00:02:22,200 --> 00:02:24,600 It's known as a family-oriented neighborhood 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 meeting veteran 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 make a 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 construction for 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'm a real estate agent. 82 00:02:53,266 --> 00:02:55,266 We decided to combine our 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 everything has 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 need all 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 well into 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 think it's been touched since 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 matter of what will give us the 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 potential to improve it 107 00:03:42,867 --> 00:03:45,200 and eventually flip it and sell it for property. 108 00:03:45,200 --> 00:03:47,166 [Natalie] We will be completely gutting the house 109 00:03:47,166 --> 00:03:50,600 and creating a five bedroom house plus an ADU. 110 00:03:51,066 --> 00:03:52,133 We are going to add a pool 111 00:03:52,133 --> 00:03:54,567 and completely landscape the exterior as well. 112 00:03:54,567 --> 00:03:56,800 We want to do something that really stands out, 113 00:03:56,800 --> 00:03:59,266 and that maintains its 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 adding square 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 take for 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? 124 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 kept the 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 footprint of the house was pretty big to 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 500 would 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 that to an ADU. The ADU is additional. 145 00:05:02,567 --> 00:05:04,567 [Natalie] Yeah, and that's 450 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? 148 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. 154 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? 159 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 budget is 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 going to 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 166 00:05:41,300 --> 00:05:42,867 what this market will 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. 171 00:05:53,166 --> 00:05:54,667 -It's not going to sell for that. -Right. 172 00:05:54,667 --> 00:05:56,867 I'm guessing if you're putting $700,000 into this, 173 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 182 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 spend on the finishes 187 00:06:23,867 --> 00:06:25,900 and the more you pay attention to the style, 188 00:06:25,900 --> 00:06:27,867 the more that generates in return. 189 00:06:27,867 --> 00:06:31,000 And, I believe that if 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 they don't reach $3 million, 194 00:06:36,767 --> 00:06:38,100 but they don't have this kind of yard. 195 00:06:38,100 --> 00:06:39,367 [Drew] Some people think a 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 budget that we know we 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 spending way 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 it a 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 decisions they're making 212 00:07:10,667 --> 00:07:12,100 that are gonna be 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 bathroom for the bedroom. 216 00:07:18,667 --> 00:07:21,000 And then we have a secondary, like, powder room 217 00:07:21,000 --> 00:07:23,166 that can be used... that's gonna have double doors that 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 patio for 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 put a 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 yard and 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 start to 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 opportunity to 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 brothers don'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 thing that 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 back to North Hollywood. 310 00:10:39,567 --> 00:10:42,400 There's a hotbed of property investors wanting our backing, 311 00:10:42,400 --> 00:10:44,867 Our next pitch is from Sheryl and Jasper, 312 00:10:44,867 --> 00:10:47,066 a mother-daughter team with lots of experience, 313 00:10:47,066 --> 00:10:50,100 who are just getting into multi-unit projects for 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 through construction on a triplex, 317 00:10:55,667 --> 00:10:57,867 but we've heard that progress is 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 biggest they've ever done. 320 00:11:00,634 --> 00:11:03,800 So we want to see what 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 appeal in this area 323 00:11:10,867 --> 00:11:12,600 is that you can walk to shops and cafes. 324 00:11:12,600 --> 00:11:15,800 But when Sheryl and Jasper bought their triplex on a major thoroughfare, 325 00:11:15,800 --> 00:11:18,066 they didn't realize it had commercial zoning. 326 00:11:18,066 --> 00:11:21,367 [Sheryl] We're here developing a 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 project has 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 like we're in this cycle 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 learned that the property 354 00:12:15,667 --> 00:12:18,266 was turned from residential to 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 like we were dropped into 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 is a building that you have actually 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 about the same size? 365 00:12:43,900 --> 00:12:45,900 [Sheryl] There's two 1700 square feet, 366 00:12:45,900 --> 00:12:47,600 and then the last one's a little bit larger. 367 00:12:47,600 --> 00:12:49,767 [Jonathan] Okay, so nothing has 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's all done on everything? 370 00:12:52,266 --> 00:12:54,867 [Sheryl] Yes. Yeah, we've had a 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 knowing that I want to 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 completed a 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 bathroom on the living room level? 402 00:14:04,900 --> 00:14:06,467 [Sheryl] There is the 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 bathroom and there's a hall bathroom for this room? 405 00:14:10,667 --> 00:14:12,667 - [Sheryl] Yes. -[Jonathan] As long as they're three functional bedrooms. 406 00:14:12,667 --> 00:14:15,467 Once you start to 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 not sealed 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] Trusted go-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 project is by far 435 00:15:13,066 --> 00:15:15,100 the most challenging that 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 these luxury homes in Encino, 470 00:16:27,967 --> 00:16:29,767 putting very expensive things in there. 471 00:16:29,767 --> 00:16:31,467 But I don't think that 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 brothers don'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 savings is 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 project would 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 fail if they don't have our help. 573 00:20:09,867 --> 00:20:11,900 I expect Natalie and Sean will think twice 574 00:20:11,900 --> 00:20:14,700 about their high sale price now that they've spoken with us. 575 00:20:14,700 --> 00:20:16,166 And they'll find a way to reduce costs 576 00:20:16,166 --> 00:20:19,000 by maybe tapping into Sean's construction contacts. 577 00:20:19,000 --> 00:20:21,266 They'll definitely learn from this experience and keep at it. 578 00:20:21,266 --> 00:20:24,000 But we'll keep in touch to offer advice if they need any. 579 00:20:24,000 --> 00:20:25,667 I think Sheryl and Jasper's triplex 580 00:20:25,667 --> 00:20:27,900 is a great mentorship opportunity for us. 581 00:20:27,900 --> 00:20:31,166 We like working with experienced investors whenever 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 window where we have some 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 us before the next project 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 excited and I really want her to do things 607 00:21:28,667 --> 00:21:30,033 better than I've done them. 608 00:21:30,033 --> 00:21:32,066 So I'm grateful that you guys are going to come in and help us 609 00:21:32,066 --> 00:21:33,967 -turn the page. -Yeah. Thank you guys 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 be supporting these investors in 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 ideas to the table that will absolutely 620 00:22:02,000 --> 00:22:05,100 blow the design out of the water and give them opportunity for more revenue. 621 00:22:05,100 --> 00:22:07,767 [Jonathan] They're already 200 grand in the hole, 622 00:22:07,767 --> 00:22:09,200 over and above their original budget. 623 00:22:09,200 --> 00:22:11,767 [Drew] And project management is a massive part of this deal, too. 624 00:22:11,767 --> 00:22:13,667 We wanna make sure that they're organized the 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 wanted a television and built-in that way. 648 00:23:11,700 --> 00:23:13,800 [Kelly] That's definitely the best wall for it, 649 00:23:13,800 --> 00:23:17,100 because having custom built-ins is great. It really reduces the clutter. 650 00:23:17,100 --> 00:23:19,567 And, then, it creates a focal point for 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 is the kind of living space renters 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 know the design plan, 659 00:23:40,467 --> 00:23:42,967 they'll know exactly where things need to be installed. 660 00:23:42,967 --> 00:23:45,567 All they need to do is tape a plan up on the wall 661 00:23:45,567 --> 00:23:47,767 and everyone will know where 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 planned for 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 planning on doing custom vanities and 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 grays and blacks and whites. 669 00:24:04,166 --> 00:24:06,367 Well, that's great because we 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 Jasper are experienced investors. 677 00:24:21,467 --> 00:24:23,600 They don't need us to provide a lot of materials, 678 00:24:23,600 --> 00:24:25,266 like some other investors that we back. 679 00:24:25,266 --> 00:24:27,767 [Jonathan] We don't think that would be a good use of our resources. 680 00:24:27,767 --> 00:24:30,000 They need mentorship more than anything. 681 00:24:30,000 --> 00:24:32,667 So, Drew and I are gonna cover the cost of Kelly and 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 triplex is Sheryl and Jasper's 687 00:24:46,000 --> 00:24:47,600 first ever commercial 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] Meeting some of the code requirements set their schedule back, 691 00:24:52,367 --> 00:24:54,600 and they still have some inspections to pass. 692 00:24:54,600 --> 00:24:57,467 All three units of the triplex are at different stages. 693 00:24:57,467 --> 00:25:00,200 Donnie and Kelly can only be here for ten weeks, 694 00:25:00,200 --> 00:25:04,266 so we're counting on Donnie's project management skills to 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 in the real estate game, 702 00:25:17,467 --> 00:25:20,867 you are gonna figure out real 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 ordering design materials until 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 projects sitting for weeks 726 00:26:11,667 --> 00:26:13,467 while you're waiting for 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 taking Sheryl and Jasper to a stone yard. 762 00:27:35,100 --> 00:27:38,000 They are way behind schedule with a ballooning budget, 763 00:27:38,000 --> 00:27:40,767 so I really need to teach them how to change their 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 out their countertops, and I wanna show Sheryl 766 00:27:45,867 --> 00:27:49,367 how she can still get those gorgeous slabs that she wants, 767 00:27:49,367 --> 00:27:50,700 but still stay within 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 think she 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 spending a 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] Calling with not the best news. 845 00:30:49,767 --> 00:30:51,767 The problems that Sheryl's having 846 00:30:51,767 --> 00:30:55,200 with the conversion between residential and commercial building, 847 00:30:55,200 --> 00:30:59,266 well, they came back after approving her fire sprinkler system. 848 00:30:59,266 --> 00:31:02,967 And the inspector notices that there wasn't the precaution 849 00:31:02,967 --> 00:31:06,066 taken on these shared walls to keep fire from jumping. 850 00:31:06,066 --> 00:31:08,200 The drywall in the first unit was complete. 851 00:31:08,200 --> 00:31:10,200 Now, some of that has to be walked back 852 00:31:10,200 --> 00:31:12,667 and make sure, you know, we've got all the plugs and 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 worried about 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 looking at 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 looking at a good three-week delay 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 like we're getting a little further 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 ready to attack it 867 00:31:40,800 --> 00:31:43,767 from a perspective of having everything on site ready 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-week timeline just became 13 871 00:31:51,767 --> 00:31:54,667 while we do all the electrical upgrades to pass inspection, 872 00:31:54,667 --> 00:31:56,967 which is unfortunate, 'cause that's gonna cost Drew 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 property was to build an 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 not take 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 funds to 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 original goal was to find a multi-unit property. 897 00:32:59,567 --> 00:33:01,000 They're already out there looking. 898 00:33:01,000 --> 00:33:02,767 They didn't outright ask 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 wanna help them because we just got them 902 00:33:06,767 --> 00:33:08,767 out of this huge financial hole. 903 00:33:08,767 --> 00:33:10,467 I don't want them falling 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 $345,000 total for a down payment and renovations 912 00:33:35,667 --> 00:33:40,600 for what is, or could become, a multi-family rental with zero zoning issues. 913 00:33:40,600 --> 00:33:43,266 Drew sent some listings, and they've already seen some of those. 914 00:33:43,266 --> 00:33:45,767 But there are two properties that 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 limited on 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 bath in the back. 919 00:33:56,567 --> 00:33:58,767 There's two of those. And, then, there's a studio up 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 that we've come out ahead on that almost-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 now are about $1,800. 938 00:34:47,667 --> 00:34:50,867 The one advantage you have with this building is 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 for in 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 property is not necessarily turnkey. 963 00:36:00,066 --> 00:36:01,700 There's still a bit of work that has to happen. 964 00:36:01,700 --> 00:36:03,367 A kitchen that 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 making about $1,800 for the studio, 987 00:37:02,767 --> 00:37:04,967 and about $2,200 for the one-bedrooms. 988 00:37:04,967 --> 00:37:08,300 You'd be clearing 75 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 you some more options. 1005 00:37:56,567 --> 00:37:59,500 I'll maybe find you one that's a different location, 1006 00:37:59,500 --> 00:38:01,066 something a little cheaper, 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 something that 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 hesitant about taking on another renovation, 1013 00:38:15,867 --> 00:38:20,266 but they're forgetting that 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 property in 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 get about 63 grand. 1056 00:40:01,367 --> 00:40:03,767 You rent this as two separate suites, 1057 00:40:03,767 --> 00:40:07,200 you'd actually get closer to $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 properties that we looked at 1066 00:40:26,767 --> 00:40:28,867 have something interesting in 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 getting bigger units for 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 it would 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 spend on 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 always going 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 not they actually get this place, 1096 00:41:38,400 --> 00:41:40,200 as a mentor, I feel a lot better 1097 00:41:40,200 --> 00:41:42,567 knowing I've given them a 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 continue to understand 1101 00:41:48,900 --> 00:41:52,100 the value of spending the right amount of money on their investments, 1102 00:41:52,100 --> 00:41:54,266 so they can continue to build their business. 1103 00:41:54,266 --> 00:41:57,500 [Isabel] This is what we do for a living, to raise our 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 on to other projects. 1121 00:42:41,000 --> 00:42:44,100 This is the kind of thing that just really kills 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 much into 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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