All language subtitles for Backed.by.the.Bros.S01E08.1080p.WEB.h264-FREQUENCY[EZTVx.to]_[English] (SUBRIP)

-[Drew] Last time on
Backed by the Bros...
-This is why you buy

-a house here, because you
want that beautiful view.
-Yeah.

It's two lots side by side
that we thought

would be perfect
for a rental property.

It's literally a full gut.

The JADU should only take
about eight weeks.

We helped Christina and Arek
finish their junior ADU.

-Oh, look at this.
-This looks amazing.

-I like the connectivity.
-This is going to be
a gorgeous rental.

You're going
to get great rent.

But because of a failed
foundation inspection.

-Oh, my God.
-Holy smokes.

Their garage ADU remains
unfinished and delayed.

[Christina] We're in
a desperate rush to finish.

We're behind.

[hip-hop instrumental
music playing]

-Hello.
-Howdy, howdy.

-Well, what's--
-Coming out your way.

I wanted to talk about
Christina and Arek.

They said they're only
a few days away from

having the ADU garage
foundation inspection.

Fingers crossed.
If we get that approved,
we can move forward.

Exactly.

I'm gonna say
all things considered,

I did they did a good job
with the junior ADU.
It turned out well.

They did. You know,
they were acting as
their own GCs,

and they did pretty well.
Made a couple of...

questionable choices
when it came to finishes
and materials.

Does that look like it
works together to you?

[Christina] It does to me.

This is the complete
worst thing to have

for a tenant in here.

Hopefully some learnings
came off of that moving into

the next garage ADU.

I do like that they have
the bottom line.

It's always top of mind.

So that's good that they have
that engraved in it.

Yeah. Well, nobody will ever
say that they overspend.

That's for sure.

The big reveal of $100 sink.

Huh?

-That's a nice looking sink.
-Right?

We do have a couple of days
before we have to get back

over to Christina and Arek.

So I was thinking
we should take
a few more pitches.

Why don't we talk about
the investor in Venice?

We could talk to him.
I mean, I love Venice.

I think that would be
a great area.

Well, I have a couple of
potential investors lined up.

So why don't we meet
with them tomorrow?

-Sounds good.
-Okay.

-All right.
I'll talk to you soon. Bye.
-See you later.

Venice Beach is one of
those real estate hotspots

right in the ocean and is
a magnet for tourists.

We're excited by
the whole area

and taking a pitch
from part-time investors
Mike and Becky.

-All right.
-They've done a couple
of small projects,

but this is their
first property that has
potential for two units.

This is the most expensive
property we've ever bought.

They're pretty green,
so they're looking for
our help

to bring them to
the next level.

There's so much potential here
because their rental rates
are high,

vacancy rates are low.

So we're here to kick
the tires a little bit

-and figure out who
we want to invest in.
-Welcome.

Good to see you.

-Mike.
-Drew.

-Hi. Becky.
-Good to see you.

-Oh, wow. Nice kitchen there.
-Yeah.

You've had... This whole area
has already been redone?

Yep. We opened up
the entire kitchen,

remodeled new
cabinets, countertop,
floors, backsplash.

The goal here is potentially
short-term rentals,

and then eventually
we'll move in,
and this will be our place.

-Yeah.
-We're really using this
vacation home right now.

We're gonna try to live on
one income.

So we both work, live on
one income,

and then use that
second income to try
to do investments

in real estate
and other things.

-You've done properties
before, right?
-We have.

We've been investing
in real estate since we came

-to California about
21 years ago.
-Yeah.

We always want to look
for a place that has

a little bit of magic
and spirit.

We've done seven properties
on our own,

and we also put the kids
to work.

-Okay.
-Amazing.

-How old are the kids?
- [Becky] Well, our youngest
is 10 now.

Then we have a 14-year-old,
a 17-year-old,

-and an 18-year-old.
-Oh, wow.

My husband and my son have
been the primary contractors.

-It's--
-And we are not strong
in that field.

What was the cost of
the renovation for this house?

-$125,000 all in.
-Okay.

-All in.
-This was all us.

All the wiring.

We still have some issues
in the house.

You see things like, you know,
the receptacle showing.

You can see off the side,
there's the hole for
the vent there.

Why is that like that,
by the way?

I installed the cabinets,
and that cabinet

is supposed to be there,
and that cabinet is supposed

to be here,

so it offset where
the middle was.

Ooh.

We've had always
good outcomes.

We've had great returns on
our investments,

but it'd be nice in
this situation to just

get it right the first time.

If you're trying to save money
by doing the work yourself,

in the end,
it'll probably affect

how much rent you can get
if things don't quite look

-as good as
a quality renovation.
-Yeah.

I thought they did a really
cute job on the main house.

They've cleaned it up
to the point where I think

renters will pay
a good price for this.

So are you planning to do
a new build out back?

-Is that the goal?
-It's the plans for
the back house.

It's complicated,
but it's a remodel.

We're really trying
to identify, can we generate

good income using that space?
I think Venice has, like,

12 million visitors a year,
so there is a strong desire.

Why don't we get back there?
Let's get back there
and take a look.

Our plan is to make
a nice one-bedder,

one-bath living space.

-Have you rented this at all
since you had it?
-No, no.

I don't know the last time
it has been rented.

-Oh, there is a garage.
-Very small garage.

-It's really tough to use.
-Have you ever considered

taking over this space
and making this
all living space?

I hadn't thought about that,
but I had always thought

that we wanted parking.

-It's very highly desirable
to have parking in Venice.
-Yeah.

And it'd be nice to be able
to pull in the back alley

-and have parking
and then build above.
-It's so narrow here.

I don't know that
you could actually get
a vehicle in here.

-Well, that's exactly it.
-It's not a parking spot
right now.

It's a storage unit.

A lot of electrical, plumbing
all needs to be redone,

-Absolutely.
-some structural.

-The slab here
is in bad shape.
-Yeah.

We also had a limited budget
on what we can afford

near the beach.

If you did a second story
and parking down below

and you had
a two-story bedroom unit
up above,

that could be great because
you get the best of
both worlds.

-Right.
-That also costs a lot more
money to get there.

-Yeah. Look inside.
-All right.

So you enter through
the bedroom?

-Yeah.
-We enter through the bedroom.

There's an entrance
into the alley as well.

Parking is a premium here.
I mean, in Venice, it's tight.

They do have a back lane
here, but it's so choppy.

The front hall
is wasted space.

This is awful.

I mean, you have the kitchen
off the bedroom.

It's barely a kitchen.

There's so much dead space
in this house.

What's your plan
for the renovation?

Phase one, which is make
this bottom unit usable

-and rentable.
-What would the rent be here

if this is a one-bedroom
remodeled house?

We think between $1,800
or $2,000 a month.

I think you could probably
get a bit more than that.

But, I mean, this is Venice,
and you're still going to get

a really good rent for it.
What are you wanting
to spend on this?

We want to spend between
$80,000 and $110,000.

The question is, do we do
an investment now

that maybe takes us
six to seven months

of construction
and get it usable,

and then wait two years
and do phase two?

-For the second story, right?
-Right.

You're not even close to
what the cost will be

to renovate this.

Your plumbing lines
for the kitchen,

they're surface mounted
on the exterior.
Terrible idea.

Pipes can freeze,
even in Venice Beach.

So that's got to be redone.

-We literally have no
insulation of any kind.
-No.

You're going to have to
bring it up to energy code.

Also, there are some
major issues here.

So as soon as this is
opened up,

-Oh, yeah.
-you know there's
something wrong.

This points to a leaky roof.

It pains me the thought
of spending that much money
on this

before you go to build up,
because in reality,

I think you're gonna
realize you just need

to get rid of the whole thing
and start fresh.

And then you have construction
that's gonna take some
more time.

And no tenant wants
to live underneath

a construction zone.

-No.
-That's right.

However, the city really does
want more ADUs.

They want more housing.

We do have the capital
if we needed to do 350

or 400,000 to do
the full project up.

-Do it all at once.
We could do that.
-Oh, wow.

I mean, it's great that
you can do that,

but if this is still just
a one bedroom, it's...

-Or two, yeah.
-I think you could get away
with the two.

I think if you expand it
and you do it right,

a good two bedroom back here
with the parking underneath,

you could get more money.

It'll take you a little longer
to pay off, obviously,

but I think the parking here
could also make

the front house
more valuable, too.

They have done this before.

They're beyond
their comfort zone now.

And so I like the fact that
they're reaching out before

they start spending a bunch
of money in the wrong place.

Would you be willing
to not use the main house

for a couple of years?

Rent out the main house
and this just to generate

a whole chunk of cash
to help pay down quickly.

And then all of a sudden
you're in a spot

where it was worth
putting more money in.

I think with the kids
at the age that our kids are,

-we wouldn't give up
that house.
-Okay.

These are the years that
we want to be with them.

And use it.

So that front unit
is probably where

we're going to spend time
when we retire.

Knowing that you eventually
want to retire here,

it makes sense that generate
some income off of this

so it's paying itself off.

And then by the time
you're ready to use it,

that was a great investment.

The property's in
a lucrative location,

and they understand
the numbers,

but they're stalling
on decisions.

It's the personal emotions
getting in the way because

they're going to live in
the main house.

But they need to take action
to start generating income

for their future.

I can appreciate why
you haven't been able
to figure this out,

because this is a tricky one.

Some of the things that
we're struggling with

are the things that
you guys are talking about.

You just have
a lot more experience

and that's kind of what
we're missing on a project
like this.

You know, there are
a lot of people who say

they're investors where
automatically we get
red flags.

-Thank you, really nice,
thank you for taking the time.
-Talk to you soon.

-All right.
-I appreciate it.

But I would actually say
I got a lot of,

what would be green flags
with Mike and Becky.

I like a lot of what they say.
With what they think

they can get for rent,
they're actually
underplaying it.

They're being
very conservative,
that's smart.

Because this is where
we want to be forever,

it's really something that
we don't want to screw up.

We definitely need
the brothers' help.

We really do look
at the numbers.

We want to have
all the information.

That's where we make
a decision.

But at the other side of it,
I also like to like the people

that we're investing in.

If they're listening to us,
if they don't have ego,

if they've done
their research, that I like.

Why don't we take a look at
the other house,

-Yeah.
-and then we'll decide after
that what we want to do.

-All right.
-All right.

We don't have far to go
because the second pitch

is from John,
a 21-year-old rookie investor

who bought this
$1.35 million property

five months ago in
coveted Venice Beach.

And he did it in cash.

I love the area.

The lots are much bigger here
than Mike and Becky's.

Very fancy.

Rental here, he could do
really, really well.

And a short-term rental,
even better.

But the house has
to look high-end.

Oh, so that's where
the construction's at.

-Yeah.
-How's it going?

-Nice to meet you, Drew.
-Nice to meet you, Drew.

-Jonathan.
-Pleasure.

Kudos on your first
big investment.

That's pretty cool
and a great location.

Thank you. I appreciate it.

What was the reason
you decided to get into

-real estate?
-Well, I've always
loved entrepreneurship

and investing,
and I've dabbled in

a lot of different things.

I started off doing kind of
simple, silly stuff

like buying and selling
Pokemon cards in school.

From there,
I launched a gazillion
different endeavors

over the years with
the dream of being able

to buy my first property.

No one has helped me buy this.

All of the money was from
the last decade of working.

And that's all kind of sparked
by seeing a lot of

financial struggle in
my parents growing up.

And my biggest fear
is returning to that.

I've been able to,
over the years,

scrounge together enough cash
to buy this property.

I'm now trying to renovate it
and bring it to the market

as a short-term rental.

You have the same vibe
that we have.

-We were looking
for opportunities.
-Yeah.

To be totally honest,
I see a little bit of us

back when we were
21 years old in him.

We started our first business
at eight years old

selling decorative hangers,
tried a million ways
to make money,

just like John,
and bought our
first property at 18.

Why did you choose this area?

Venice is an incredible market
for any kind of renovation

or development.

Prices can get upwards
of a few thousand dollars
a foot,

so you can make a lot of money
adding any square footage

or converting anything
into living space.

And that's why I bought
basically a junkyard

that hadn't been touched
in 70 years or so.

And because it wasn't in
a habitable condition,

I had to buy it all cash.

Paid $1.35 million for it,
which for this area,

there's homes that are
$3, $4, $5 million right
down the street.

But to get my money back out
and refinance it,

I had to put it into
a habitable condition.

-Right.
-And so we did some work on
the phone just to get it

to that bare minimum level
of where we were able

to refinance it.

But the backyard
and the garage are still

completely untouched.

[Drew] How much did you spend
to fix it up?

150 grand, so I'm all in
1.5 million.

Okay, so that's a lot.

Yeah, so 150,000 just
to make it inhabitable.

If I'm looking right now,
I don't think anybody's going

-to pay you top dollar for
the place right now, right?
-No, no.

If the goal was just
to make it habitable,

well, for me,
this is a huge red flag.

How much did you spend
to fix it up?

150 grand, so I'm all in
1.5 million.

That's a lot just
to make it inhabitable.

Banks only loan money
against houses

you can live in,
so John had no choice

but to fix it up to get
the loan he needs
to complete the project.

If the goal was just
to make it habitable,

then he way overspent.

Plus, he's still
a very long way away

from making this place look
high-end enough

to rent for top dollar.

I am concerned that
you've already dropped

150 grand on a renovation
that I don't see adding value.

When we first started,
the big mistake

we made is you overspend.

You spend on things
that you're not going
to get that return on.

What's your end goal?
Why would you even need us?

We want to do a second story
to get it to

a three-bed stage.

There's a rooftop patio
and everything as well.

The amount of time
it would take to do

an entire second story plus
the rooftop patio is

a massive,
massive undertaking.

If we can spend $400,000
or so...

What are your carrying
costs right now?

About $6,500 a month.

You absolutely can do
additional stories

and all this extra work.

It's just, do you want to wait
that long to get the approvals

and carrying costs
for that length of time?

Mm-mm.

If you could get three beds
and two or three bathrooms

out of redoing these spaces,
you could get approvals

in more like six weeks
and start making rent

instead of paying
carrying costs.

Are you wanting to flip it
and sell it?

Are you wanting to keep it
as a rental?

I want to keep it.
Short-term rental, three bed.

We think we can gross roughly
$15,000 a month off.

-And right now,
have you had any rental?
-No, I've not.

Want to make sure you're being
smart with your money.

But we need to make sure
that we're comfortable

with what we would be
getting into as well.

John has done a lot of
research, but he is so green.

I feel he needs everything
from us.

Can you admit when
you make a mistake?

I think so, yeah.
Yeah, I think I can.

I don't think he needs
our warehouse stuff

as much as he needs
the trades, the design help

to get him across
the finish line.

-Project management, yeah.
-I'd say that's the most
important part of it.

Can we look in
the hallway here

-Yeah.
-And see what the rooms
look like?

So it's currently a two-bed,
one-bath layout on one floor.

I want to know,
where did this $150,000 go?

What work has been done,
and is any of that something

-that we can salvage?
-This is like
a belly button shower.

You're tall.
What are you, 6'5"?

Why is your toilet four
or five inches off the wall?

We can already see that
he doesn't know

his whole scope of work.

Yes, he has some designs,
he has some ideas,

but he doesn't know
logistically what he has to do
to get there.

I would do a bump out
just to capture a little bit

more square footage.

Is there a chance that
you're blinded by this dream

of having a second story?

Potentially, yeah.
Potentially.

The garage has to be used
as livable square footage.

You've got a garage
sitting here,

wasting space in
this neighborhood.

You don't need a garage,
especially with this being

a hot rental area.

Why would you not go to this
as your first choice?

Turn this into livable
square footage.

That is so much easier than
trying to do the whole hassle,

two years waiting,
trying to get a second story.

Mm-hmm.

If you were thinking of just
adding bedrooms above
the main house,

what were you thinking
this should be?

Some kind of, like,
media or entertainment room,

you know, throw some
couches back here.

Instead of just
an entertaining space,

this would be
a beautiful-sized bedroom.

I would have a bathroom
in here.

That way you can get
your three-bedroom goal

without waiting two years
to put in a second story.

If you're estimating you want
to spend about $400,000

to do a bump-out,
complete reconfiguration

of the whole main house
and finish the whole yard,

that money will be gone
like that.

And if you add a second story,
you'll easily double that.

I would walk away
from any involvement

in this project immediately
if you were gonna GC yourself,

because that's the first step
to complete failure.

Yeah.

If we don't come in
to help you,
what are you gonna do?

Yeah, there's a lot of risk
on the line.

I can definitely make
a lot of missteps.

Every decision I'm making
right now is something

that's me spending tens
or hundreds of thousands
of dollars

on something that
is gonna last, you know,

years or decades.

So there's a lot of risk
on the table that I do
things right.

And what's the deal
with the concrete?

-This looks brand new.
-That was mistakenly
placed there

because we had some
rearranging of plans.

We're going to get rid
of this.

-When did you do it?
-About a week ago or so.

-Oh, my gosh.
-What?

This is several thousand
dollars of concrete work.

How much was that?

-Probably about $8,000 or so.
-Oh, my God.

You don't have
unlimited capital.

I like John.

I'm trying to figure out if
it's an overconfidence thing

or if it's a fear thing.

I've crunched the numbers
super hard

on this market specifically,
on short-term rentals,

and I know that there is
a massive potential return.

It's just a matter
of getting there.

If we can spend roughly
$400,000 or so,

that's going to be worth
somewhere around $2.7 million.

All in, I'd be $1.9 million,
which leaves it

with a profit
of roughly $800,000.

But I need someone
to help me chart the waters

and steer the ship.

I need the brothers because
if this renovation goes wrong,

I stand to lose everything
that I have.

Let us chat about it.

We might have a couple other
questions to text you.

-Otherwise, great to meet you.
We'll be in touch.
-Nice meeting you.

-All right.
-Nice meeting you.

My hope is you get there
to be that Venice land baron.

You're going to get there.
We just want you to get there

with more money
in your pocket.

I knew that they were
gonna give me a little bit of
a hard time.

You know, I have to take
big swings,

and I have to take
big risks to give myself

that stable and secure
financial future.

-He's a smart kid.
-Yeah, you can see
the determination in his eyes.

He's playing it cool,
he's playing it confident,

but in reality, he's got
all the money that he's made,

which is a lot for
a 21-year-old.

It's all on the line.

I feel like Becky and Mike
are a little more realistic

about what has to happen.

Even though their numbers,
I don't think, make sense.

What are you wanting
to spend on this?

We want to spend between 80
and 110.

You're not even close
to what the cost will be

to renovate this.

Where John
is kind of like trying
to put up this confident,

strong front. And I can see
he is way over his head.

He's made mistakes.

He's thrown a lot of money
out the window.

But there's still opportunity.

But this is the challenge
I have.

Is he still focused on adding
this extra story?

because with all
the extra expense of

the second story
and all that work,

I don't think it's enough to
really make a huge difference.

-Yeah.
-John's project would be
an incredible project,

great rental income
the way it is.

I agree.
But is he gonna listen to us?

So my fear is ego.

-Yeah.
-If he's not willing to drop
the ego, I don't know.

That's why Becky and Mike,
they're just being

a little more realistic
and open to our opinion.

We could probably go back
and forth

a million different ways.

If we were to narrow
everything down,

do they have the budget to do
all the stuff they need to do?

Budget, execution,
return on investment,

can we get all this?

It all boils down
to where our involvement

-would have the most impact.
-Yeah.

So, with everything
considered,

you want to go with...

So, with everything
considered,

the investment itself
you want to go with?

-[both] John.
-Okay.

Best investment here is John.

For Mike and Becky,
they're looking at
the best investment

for their situation because
they want to keep

the main house for themselves.

Anything they do back there
is not going to have

a huge impact until
they eventually do

the two-story thing
that they want to do.

And again, if they do take
our advice,

that would be two years
from now.

And if that's the case,
maybe we can help them then.

Well, exactly.
So they don't really
need us right now.

John needs us right now.

This house is
a great investment.

Rental rates are amazing here.

Yeah, there might be
a little bit of ego,

but we can handle that.

If we could go back,
we were John.

Like, we did exactly
what he did.

We didn't make any money.
We overspent.

He sees this big dream,
and he wants to go for it,

and he's willing to put in
the work.

-Shall I give him a call?
-Yeah.

He'll be excited.

[cell phone ringing]

-Hey.
-Hello.

How you doing?

Hey guys, how's it going?
I'm doing good.

We want to back you.

Oh my God.
Are you guys serious?

Yeah, yeah.
We want to back you.

This is like a dream
come true.

You remind me a lot
of Jonathan when
we first started out.

And in saying that,
I'm not trying to be mean,

but there's a little ego.

So my question for you is,
are you willing to let that go

a little bit to take some of
our advice because

we're trying to do what's best
for your investment?

Yeah, I'm definitely
willing to let you guys

mentor me and try
to be a good listener.

-[both laugh]
-We're excited
to work with you.

You have a good eye.
I like that you do
a lot of research.

And so if we can come in
with our resources

to make this a really
viable investment for you,
we're here.

Awesome. Thank you guys
so much.

-I'm so excited.
-We are too.

We're going to finish up
another project

with a previous investor
in Glass Hill Park,

but we'll reconnect as
soon as that's done.

-Can't wait.
-We'll see you soon.

-Talk to you soon.
-Bye.

All right.

Yeah, I mean, he's excited.

He promised.

He promised he's going
to listen.

He's going to absorb.

Yeah, I guess I got to get
home to change some diapers.

Christine and Arek have
an opportunity here,

but I think they're all over
the place.

-I know.
-All right, what do you think?

Um, remember that
woodgrain porcelain tile

that we said they shouldn't do
in the JADU?

Yeah.

They put that in their
main suite bathroom.

What?

They're cheapening out
the look of the space.

We need this rented yesterday

so that we can start
cash flow.

They're in so deep that it's
affecting them emotionally.

It's affecting their
decision making.

It's driving me
a little crazy.

This tile with this
to me doesn't work.

We're pressing ahead getting
John's plans and permits
in place

to turn his property into
a high-end short-term rental.

But we're still heavily
involved with

our previous investors,
Christine and Arek.

Between your resources
and ours,

I think we could back you.

Oh, my God. I'm so happy.

We backed Christine and Arek
because they have one of those

rare properties with potential
for two rental units.

Look at this.

They completed the small
one-bedroom, one-bath unit

on their own without much
hand-holding from us.

You look stunned and shocked.

I am stunned and shocked.

The real work
is converting this detached

garage into a two-bed,
two-bath.

Uh, we're behind.

They hit a major snag
with framing.

-Wait, wait, wait.
-This looks off.

Are you trying to make it
a three bedroom?

-Um, rookie mistake.
-It's almost a complete redo.

Oh, my God.

But it was the additional
foundation work
that really set us back.

I know it doesn't look
like it, but there's
a lot of stuff

that has actually been done.

It's just underneath the dirt.

We have poured
the new foundation.

We want to have this ready
for the rental market

as soon as possible
so they can start bringing in
some income,

and we can reconnect with
John in Venice Beach.

We heard from Adam,
and he let us know that

the Garage ADU Foundation
has passed inspection

for real this time.

Six inches all
around the main.

-Holy smokes.
-Hey.

-What's going on?
-What's up, man?

Any water or erosion from
the mud with all the rains?

We waterproofed
the entire foundation

prior to any rain,
backfilled the footings.

-That's a lot of work.
-Yeah.

-But it looks rock solid.
-Yeah, it looks really solid.

Good.

One question I do have,
because you guys said

your budget on this
was 280 grand.

-Yeah.
-Which is a lot.

Is all the work here for
the landscaping

and the retaining wall,
is that included in
the budget?

That was an addition.

-Okay.
-Yeah.

-Um...
-This is sort of like
the afterthought.

-[both laughing]
-And I don't think
we have a final plan.

There won't be retaining walls
like this.

Everything will
be landscaping.

But nothing really is going
to happen down there.

-Yeah, not yet.
-I think we're going
to stop it

from the curb appeal.

Yeah, and this will be a work
in progress over time.

Are you raising this up,
or are you keeping the slope?

To do another retaining wall
and have another
potential delay,

the cost doesn't make sense
for them.

For now, we're just going
to grade everything,

and then we're going to run
a fence to separate...

The two units.

Okay, so there is a fence
and hedges over here.

-Yeah.
-Yeah.

We can start to clean up.
What's the plan?

What are we doing
for decking materials?

It's funny you ask.

Christina, I know,
wants real wood.

Why do you want real wood
on the surface of your deck?

I like being able to change
my mind on the color.

I don't like having to
sand down and refinish.

-Yeah.
-And real wood does fade
pretty fast.

If I could convince you to go
with a composite material...

Yeah, actually,
it doesn't look that bad
in the sun.

-No, not at all.
-My concern is longevity.

I would say
if you like natural,

go with something
in the brown realm,

but a composite material,
not natural wood,

-and then you will thank me.
-Sold.

-We'll take either one
of the brown ones.
-Okay.

It's an amateur mindset
to think cheap now

being the right solution
for down the road.

Spend now on something
that you know is going

to make life easier down
the road.

-Uh-huh.
-Okay, now this is
your messy primary bedroom.

-[laughs] That's right.
-Won't it be nice to
have doors

-and...
-Yeah.

-I'm very excited about doors.
-I think we're actually close
to the doors.

We're about to close up
the walls.

-It still looks pretty rough.
-Yeah, as soon as

we can get this locked up,
the better.

-Yeah.
-Yeah.

Okay, let's talk materials.

[Christina] These were some of
the items I had already had.

And so we picked this
for the flooring.

-Wood.
-Okay.

So I did get my wood on
the inside.

Personally, myself
and the Brothers,

we love luxury vinyl.

It's less expensive.
It'll last longer.

It'll be super durable.

I'll keep an open mind.

There's just something about
wood that I just like.

Okay.

We decided against the LVP,
and we went with

engineered flooring.

I'm okay with that decision.

Because this is a rental,
we had proposed luxury vinyl

for the flooring,
super durable.

Christina absolutely wants
hardwood in here.

I can tell some of these
concessions she's making

because this is stuff
she personally likes.

I like real hardwood as well.
I mean, great.

But, the renters care not
as much,

and they are tougher
on floors.

So then what are you thinking
as far as your backsplash?

I want to say we were going
with the white subway

-for the backsplash,
partly because of budget.
-Okay.

On these that I had
already stored away.

Oh, so this is your stuff?

-Yeah.
-Yeah.

It will help us save,
you know, budget-wise.

The one thing
I would recommend,

from room to room,
if you have the exact
same size,

exact same style,
but just different colors,

it can feel kind of boring.

You can always mix it up
if you want to do something

a little bit different.

But at the same time,
remember Drew's advice

from your junior ADU bathroom.

It is a huge no-no to have
a wood up against the wood.

[Jonathan] Our goal is
to finish up the garage ADU
as soon as

we can so Christina and Arek
can start renting it out.

[Christina] This investment is
important to us because
we need this

rented yesterday so that
we can start cash flowing.

Christina is smart,
and she has made

some smart decisions,
but she's also made some
bad decisions,

-getting a deal on everything.
-Yeah.

Sometimes when you see,
oh, my gosh,

this looks like a real
big discount,

but it's not
the right product,
then it's not a deal.

-Oh, I think
they're both fine.
-Yeah.

-I do like the cabinet.
-Yeah.

The ceiling's taller.

I couldn't have guessed it
would have been
10 feet ceilings.

Listen, I liked it.

-Yeah.
-And this one's almost done.

Yeah, I like the way
that turned out.

Does Drew know about
the two colors?

-It was a last minute change.
-You think we should call?

-Yeah, we should show her.
-All right.

[cell phone ringing]

-Hey.
-Hey.

-How's it going?
-Good.

I see drywall,
but no paint yet.

We're in the primary bedroom.

This isn't done,
but we're just about done

with the primary bathroom.

Hang on one second.

I know.
All right, what do you think?

Um, is that that wood grain
porcelain tile that

I asked you not to put into
the JDU floor?

-Yeah, that's the same one.
-We already had it.

But you have a hardwood
in the main area, right?

The same issue I warned you
about in the JDU,

you've now done here.

That's going to be backed up
right against the hardwood

in the main area.

But at least there's a doorway
in this option.

If you're calling me
for advice,

you're really pigeonholed here
because you've already
got it down and laid out.

That's true.
Well, I'll tell you what.

Let me show you the rest.

And then we'll take it
from there.

All right, all right.

All right, so now
we're in the kitchen.

So you can see our cabinets
that are being installed.

Okay, okay.

Oh, they don't go up
to the ceiling.

-That's too bad.
-Yeah, we just.

You bought these before
you planned on using them

-in here, though, right?
-That's right.

Okay, I need to get over there
and see what else

you've done in person.

So don't move forward with
anything until I get there.

All right.

I mean, my big red flag here,

yes, they've done
some renovations
in the past,

but I don't trust
their finished product.

Like, they're talking
about products that

just don't go together.

From one location,
you can see four
different floors.

Like, it's,
I don't know, it's driving me
a little crazy.

We talk to them,
they're stubborn with
certain things,

they're willing
to change others,

and the next time
we talk to them,

they change the things
that they weren't going
to change,

and they're not
changing others.

I'm getting confused
thinking about it.

Yeah, it's fine.

It's all right.

-Knock, knock.
-Hello.

Let's talk kitchen first.

-Okay.
-Yeah.

Oh, yeah.
So now that I'm here in
person, the gap looks big.

Kelly's first option was
a soffit over
the entire thing.

The second option was
to build the box up.

The bad thing there is that
that's custom millwork now.

-Yeah.
-So then you would be
doing one, two.

-Three.
-Three.

I would leave it as is.

-What did you pay for all
these cabinets?
-$1,000.

You paid a thousand
for all of this?

Okay.

That's actually pretty good.
That's really good.

Because it's a rental,
I don't think it's the end

of the world that it has
a space on the top,

but next time don't buy
cabinets before you know
the space.

-Yeah.
-What was your plan
with the vent hood?

Um, I'm open.

If you just like drywall
box it out

and you go from here
all the way out.

You know what?
I'll get you one from
our warehouse.

It'll hide the fact that
is not centered, right?

-Okay, done.
-Yeah, save you some money.

I see you left some
of your tiles out.

Yeah.

-Which do you prefer?
-I think either.

I think either works.

Both of them would look good.

I want to take this to
the bathroom, though,

-Okay.
-because this is what I was
not quite getting.

So the color of that porcelain
that looks like hardwood

is going to be right up
against the actual
natural wood floor.

-Yeah.
-And they're nowhere near
the same color.

For me, as a design element,
it bugs me to see

-that side by side.
-Yeah.

The most important thing
will be to make sure that

whatever you have as
a transition hides
under the door,

because when the door
is shut, all you should see
is this floor,

-Okay. Yeah.
-not the transition.

I actually like this tile.

-Yeah.
-I don't think this tile
is bad at all.

I don't think it goes with
the wood.

The style of that wood up
against that,

to me, you actually could have
just painted this room out

and run this tile
the whole way up and around,

and it would have
looked amazing.

Yeah.

Maybe that subway could have
just looked,

or even just a clean
white subway actually
could have worked.

-Which I do have.
-You do have that?

Why wouldn't that be
your choice?

Subway tile is, it's timeless,
but it is what it is.

We're gonna have to move
forward with it.

The message is simple.

Long-term is better than
short-term for design

and quality, but the message
is just not sinking in.

Well, sometimes
it's okay to save,

but other times
it's better to spend.

It's a fine line to walk,
and as mentors,

it's really tough
to teach that.

Anybody out there,
make sure to know what

you're dealing with
before you buy your materials,

even if you think
you're getting a sale
or a deal.

My main thing is the budget.

The budget is driving a lot of
decision making.

And if the tenant really
wouldn't care,

then it's sort of whatever is
the most cost effective.

Hey. What's happening?

Oh, we have to talk all things
Christina and Arek.

-Why?
-I was just over there
looking at the space.

Remember that wood grain
porcelain tile

that we said they shouldn't do
in the JDU?

Yeah.

They put that in their
main suite bathroom.

-What?
-They're cheapening
out the look of the space,

even in the kitchen.

And I think if they want
premium rent,

they're not going to get it
with these things
that they're doing.

-I haven't picked this.
-Well, that's the tough thing.

Maybe we can dress up
the space by backing them

a little more
with some furniture.

Yeah, I'd love that.
For the bathroom,
we could probably

give one of our vanities
from the warehouse.

Oh, yeah.
That would look great.

Like in the kitchen,
we can give them countertops.

That'll make the whole
kitchen look better.

Okay.

We'll send over a guy
and make sure Kelly's there

just so they don't make
any more bad choices.

Okay.

Not everybody's a designer,
because if they were,

everything would look good.

Yeah. [laughs]

Christine and Arek have
an opportunity here,

but I think they're all
over the place.

They're in so deep
as well that it's affecting
them emotionally.

It's affecting their
decision making.

They're not thinking things
through the way

you and I would if it was

a regular business investment.

They're smart.
They seem like smart people.

They just make rash decisions.
I hope they learn from this.

Do you know what was
in that delivery?

I think that's
the other vanity.

It is.

So that's from the bros.
Thank you, bros.

-And what else have you got?
-The range.

Yeah?

Yeah, I don't see
the fridge. Oh!

-There he is.
-Hello!

-Hi.
-Hello. Hey.

-Yeah.
-Place looks great.

-This is Evan.
-Okay.

The brothers have decided
they're going to give you
free countertops.

I'm so excited not to have
butcher block countertops.

You can't even imagine.

Some colors to look at.

You're working with some
beautiful earth tones in here,

getting that kind of
marble look.

-Okay.
-So it's made up of
a 70% recycled glass.

So environmentally-wise,
it's great.

Durability-wise, it's going
to perform like a quartz.

But easy to take care of.

Very easy to maintain,
which is fantastic.

Do you have
a favorite color here?

I'm thinking these.

I like a little bit of brown.

I would go with
the Borghini Luxe,

which is great because
it incorporates these
grayish blues.

And you get the gold.

You get the richness
with the wood tones.

-Yeah.
-That is stunning.

That would look really cool.
I love it.

I have one request.
I was wondering

if we can make the countertops
go over it?

-Oh, absolutely,
a waterfall edge.
-Yeah.

-We can do that.
-That would look good.

-Okay, good.
-Take care.

I can't wait for
the countertops to go in.

That will just
tie it all together,

it's such an upgrade
and it's freaky. [laughs]

There was a lot of money spent
before they even knew

what the design was going
to be.

That's not
a good thing typically.

We don't have a lot of time
before this needs to hit

the rental market,
and so we're scrambling to try

and put in the finishes that
are gonna make this ADU
feel custom.

We're giving them
the countertops,

but Christina and Arek
are providing the tile
that they already had.

Well, this is definitely
the point where

we're hoping the design
components that we're bringing

to the table are gonna jive
with their existing materials

when all is said and done.

We are so close to being done.

We're like deciding things
that to me are the final step,

like the stucco.

Well, we were thinking about
going with a green.

I like that.

I feel like it's still
light enough,

-Yeah.
-but just like that hint of
green, which I think is great.

-Yeah.
-I like it.

I can see it now.

[country music playing]

When we first looked
at this property,

we're like, two revenues
coming in.

-It's like a gold mine.
-You're at
a complete standstill.

They were lost,
completely lost.

This is one of those
examples where people see

the opportunity,
and then all of a sudden,

every corner they turn,
it gets worse and worse
and worse.

Then all of a sudden,
you have this money pit,

and you have no idea
how to get out.

I went back and forth.

Some days, I was thinking
they were great investors
to back.

Other days, I was thinking,
what are we doing with
our time?

So by staging the garage ADU
for Christine and Arek,

we're building on what
they already did with

their junior ADU,
getting it market ready

so they can max out
their rental income

and direct
those earnings towards their
main house renovation.

I love them.

Oh my gosh, how cute is that?

That looks great.

It definitely has curb appeal.

And there's still parking.

I mean, you could easily park
in here, no problem.

All right.

-The completion of phase two.
-Mm-hmm.

I mean, I know
you've seen it unstaged,

-Yeah.
-but it just makes such
a huge difference.

-Afternoon.
-Oh, my goodness.

-Oh, my gosh.
-Wow.

-Little oasis.
-Oh, my goodness.

-I love it.
-It feels like a home.

-Oh, my God.
It doesn't look like a garage.
-Yeah, it's amazing.

Obviously, you've put
your blood, sweat, and tears

into this project.
You've been here throughout
the whole process.

It's amazing.

I adore it.

You would not believe
that this was a garage at all.

No, I mean this looks like
a home.

You've got pantry storage,
you've got space.

In reality, if we were
designing this...

-Yeah.
-...we would definitely
have taken our cabinets

-all the way to the ceiling.
-Ceiling.

You had already
purchased these

and they actually fit
the space pretty darn well.

-Yeah.
-I love it.

And, you know, being able
to help you guys out

with the beautiful
stone counters.

-Yeah.
-I love this so much.

The main thing is the place
looks finished.

It looks refined,
and it looks clean.

That's what tenants want.

It's already bigger
than I expected.
I don't know.

And you know, to be
totally honest,

a tenant might come in here,
and they might do a sectional.

They might end up putting
a nice big sectional in here,
and that still works.

[Christina] Yeah.
We could definitely fit
a sectional.

Even though it's small,
it doesn't feel cramped.

With the original design,
it didn't make sense to me

where the kitchen was or
the flow to the other areas.

Yeah.

-This is much better.
-This is beautiful.

So this bathroom, I know
we had some talks about

the color choices,
the tile choices in here.

But what I think is great
is that it's just clean.

It's presentable.

[Christina] The linear drain,
I hadn't seen it before.

Those notes from my house.

And it'll look great
for the photos.

This is obviously the bathroom
for this bedroom over here.

Really nice size.

Has its own access...

-to the deck.
-Yeah, it looks terrific.

And it just shows how much
potential is in this place.

And it's amazing we had
this much space in a garage.

The way we had planned it,
an office didn't seem like

there was room.

But this fits perfectly.

And it is a bedroom.
It had a full closet.

But I really like the way
they did the staging.

It's just going to make it
so more people are like,

yes, I want it.

Give it to me. Take it.
Take my money.

-[both] Yeah.
-And by the way, if you do
decide to furnish it

to get a higher rent, I mean,
in reality,

you're going to pay yourself
back for all the pieces

-that you purchase
very quickly.
-Yeah.

If it's that much
of a difference,

we might want
to do it furnished.

Yeah, yeah.

These floors turned out
great, hey?

Yeah.

These are the hardwood floors.
I know we talked about doing,

what were we saying,
a composite?

-Luxury vinyl.
-Luxury vinyl, there we go.

Initially, you know,
Christina wanted
to do hardwood.

We've had hardwood
in a rental before,

and we think it looks better,
and it's held up.

You're picturing luxury vinyl
as a really cheap,

cheap-looking material.

You literally can get
luxury vinyl

that looks identical to this.

You can't tell without
touching it that

it's not hardwood.

You can still get
that beautiful look.

It's just gonna be durable.

If your laundry machine
overflows or whatever happens,

-it's not gonna wreck it.
-Yeah.

This is gonna be
a very comfortable rental

for somebody.

-Okay.
-Oh, my God.

This is my favorite room.

High ceilings, so much natural
light, access to the deck.

I love it.

Walk-in closet
and its own main suite bath.

-Yep.
-Now, the material choices,

-the barn board,
porcelain with the...
-And the marble.

Yeah, with the marble.

They clash in the future.

Don't just put in materials
because that's what you have.

-Yeah.
-Find bargains after
you've done your design.

But it's beautiful,
it's bright.

This is really
an incredible room.

The addition made
so much sense.

We were able to optimize
this space.

-This is a really,
really good ADU.
-Yeah.

I think the layout
is literally perfect.

I don't think there's anything
that would make it better.

Yeah, there's no wasted space.

It was so worth it,
because now this is really

going to be a dream
for somebody to live in.

So the rentals are all done.

To have the extra income
coming in, that's spectacular.

All right, let's go over
some numbers,

because to me that's
the exciting thing.

-I know you always dig in.
-Yeah, I like the numbers.

$315,000 is what
you're out of pocket.

-Yeah.
-$35,000 is what
we contributed.

$10,000 of that was actual
hard material.

-Yeah.
-The thing is, you had
so much material already,

we didn't have
to contribute a lot.

Even more valuable than
that was getting you a GC

who can get in here
and get it done.

-That's exactly right.
-You have our designer,
and then we paid to stage

-the space to get some
really good photos.
-Yeah.

If we look at
this whole project between

both of these rental units,
it costs you $87,000

for the junior ADU
and $315,000

for the garage ADU.

You're $402,000 out of pocket.

Might I just point out
in the beginning,

we told you that
your unrealistic budget

of $150,000 to $200,000
was probably
more like $400,000.

-Yeah.
-You're $402,000.

-Yeah.
-So we kind of came in close
to that.

You could easily,
easily rent this
for $3,500 a month.

You think about that,
that's $42,000 a year.

And together with
the $26,000 a year

for the JADU rental,
that means annually

you have $68,000 of revenue
that can start pouring in

-on these properties,
which is pretty amazing.
-That's right.

It's gone from being
a money pit to

an income-producing
investment.

-Absolutely.
-I love it.

I love it.

But I do think you should keep
in the back of your mind,

as a furnished rental,
you could creep up
to $5,000 a month.

You'll pay yourself back for
the furniture pretty fast.

-Yeah.
-Yeah.

And we can finish our house.

-That's phase three.
-That's right.

I'm glad we were able
to get you through
phase one and two.

[Christina] Yeah,
two out of three, hey.

[Jonathan] Well,
the good thing, too,
is we wanted to get you guys

in a better spot financially,
and the only way

that was going to happen
was to have these done.

-Yeah.
-What a relief.

We do feel that
you have grown,

you've learned, and now here
you are with

an amazing investment.

So we're really happy
to be back to you.

Thank you guys so much.

Honestly, we would have been
another year.

Oh, at least.

We really appreciate having
someone help us,

you know, figure out which
way to go and what to do.

Less ornate for rentals.

-We just don't need the fancy.
-I like fancy.

Simple and durable.

And we're going
to get through this.

All right,
you guys. Celebrate.

Christina and Arek have been
getting a lot of interest

in their rental units,
but I recently heard

they love the garage ADU
so much,

they've actually been
considering moving into that,

which will save them paying
rent to that temporary house

they're renting,
and they're going to be
on site

while they finish
the main house.

So it's kind of a win-win.

I love the creative thinking,
and no matter how
you slice it,

they have
a winning property here.

Next time on
Backed by the Bros...

What would we need to do
to add a second store?

Is that something
you've run by the brothers?

It's something I want to do,
so I'm going to go for it.

Oh, no, no. You didn't.

It adds a tremendous
amount of value.

This probably added, like,
three weeks.

He's spending a lot of money.

We want to put, like,
a waterfall behind it.

What are you talking about?
A waterfall?

I want to make it zen.

-Oh, my God.
-Give me a whole new--

Reel it in.

I like this guy, but I want
to strangle this guy.

How many changes
have there been?

13 right now,
and we're not done.

Oh, my God.

My goal with this is to make
the best stay in Venice.

The end goal is to build
a business.

It's Zen in Venice.
We're building Zenice.

I hope you're right.
I don't know if
we can make it.

There's not a lot of time left
in this project.

Welcome to
the Zenice Beach House.

Wait, wait, wait, wait. What?

That's it?