@J Scott
Hey man! Thanks for the help last week.
Re-posting from Brandon & David's "ask me anything," because I thought it would be fun to start some healthy debate. It's a long post... If you don't get to it at all or only want to answer part, that's cool. =)
Here it is . . .
1) For BRRR deals, what are your favorite, widely available materials and suppliers? (Also, they should sponsor this podcast episode, haha.)
2) I've read Brandon's, David's, and J's (excellent) books, so I know good rehab estimating principles, and would be interested in some personal anecdotes and detailed examples, to help put things in context. I will be leaning heavily on a GC for the detailed rehab estimates, based on a scope of work that we'll collaborate on. What I'LL be doing are the quick-and-dirty estimates before I ever send him the deal, though... Sometimes just from photos. Clearly practice makes perfect, but if I can learn from your experiences, it could save me some grief!
3) I like the book "Make It Right" by Mike Holmes and think anyone aspiring to do reno projects would benefit from reading it. But… The book is targeted toward normal homeowners, so some of his recommendations would not pay for themselves. What do you think of the following? When would they be worth it for a BRRR investor – if ever?
a. Kitchen/bath cabinets. When installing new ones in a gut reno, run the finished floor all the way underneath them, so if there is a leak, if flows out and can be seen and fixed, vs. soaking into the subfloor and rotting it.
My comment: Most production homebuilders don’t do this, because if anything goes wrong with the flooring during the later stages of construction (tile crack, blemish/scuffing, whatever), it’s much more expensive and time consuming to fix it after the cabinets are installed on top. Plus, if there’s a leak, it’s still not guaranteed you’d find it with the finished floor in, especially if there is a slight backward slope to the floor.
b. Kitchen/bath exhaust fans.Don’t buy a $50 exhaust fan for the bath or kitchen. Splurge on a $500 model with a stronger exhaust, to avoid future repairs caused by excess moisture and mold.
Worth it? Would you only do it if you’re redoing the bath, or would you do it even on a “paint and carpet” rehab, to protect your investment from sloppy tenants?
c. Finished basements. He lays out in great detail all the ways people screw them up, resulting in leaks and mold. To be safe with anything except a fairly new house, you’d need to excavate around the house, parge the outside of the foundation with asphalt, install a dimpled plastic membrane over that, and then on the inside, fastidiously install rigid foam on the floor and walls, spray foam/tape all seams, etc… Then frame, then drywall.
Seems ungodly expensive. I like his solution, if it’s done by a normal homeowner as a labor of love and money is no object. I cannot imagine it ever being cost effective for an investor, even if you’re adding an extra bedroom or unit! Have you ever finished a basement for a rental? Did it work out in terms of cost, payoff, and nuisance factor? What about long term? Any leaks or mold issues?
d. Moisture barrier systems for tiled showers. He recommends the Shluter Ditra/Kerdi systems plus their pan assembly kits, to minimize leaks and mold. They seem cool. Not sure what they cost. Any thoughts on these systems or others that you like to use?
A lot of these questions overlap with J's book, so I'll post this on his thread, too, for a little healthy debate. ;-)
