Helping my Friend with his First BRRRR: Part 3 Rehab Complete!

A rental property can be a great way to generate income, but when a property is outdated with green carpets and yellow walls, the chances of attracting higher rents or a quality tenant pool is much smaller.


This brings us to the importance of the second phase of our BRRRR  - The Completion of Rehab! Rehabbing the house with newer finishing and updating the mechanicals will not only allow you to raise the rents, but also increase the overall value of the house, maximizing your investment.


As a reminder, John closed on this property at the end of November 2019 and construction started the following week. The property itself was in very good shape: the roof, HVAC, hot water heater are all less than five years old, and the exterior of the property had just been painted a nice coat of blue by the previous owner.


However, the interior of the property screams 1980! It boasts plush green carpets and dated green kitchen cabinets, all surrounded by a backdrop of yellow painted walls. We knew that the property needed a modern face-lift. The rehab scope was simple, we wanted to transform this outdated home into a modern, cozy space that will attract a nice tenant and achieve a high enough appraisal for John to retrieve all, or most, of his money back at the cash out refinance.

(1) Paint:


We painted the walls a neutral gray color which is easy to maintain and would appeal to most potential renters. The key here is balancing neutrality with a tone that doesn’t make the space feel too small.

$ Cost of Paint

(2) Flooring


We replaced flooring with luxury vinyl planks all throughout the house. I love vinyl planks. They are very durable, easy to clean, water resistant, and create a very sleek and modern look without breaking the bank. Though they may be more expensive than carpets initially, homes that have vinyl planks installed are much lower in cost during tenant turns. Don’t forget, getting the urine smell off of properties with pets can be very difficult. Thus, an initial investment in vinyl planks is generally well worth it in the long run.

$ Cost of Floor

(3) Kitchen:


The kitchen was the money maker. The cost to replace the kitchen cabinets with brand new shaker white cabinetry was just $300 more than keeping the existing ones and painting over them. We also replaced the dated countertop with a marble looking formica countertop. Formica is very inexpensive and looks very nice, especially for a rental property. Lastly, we finished the look with white subway tile backsplash to modernize the space. Updating the kitchen is often a great way to generate a large return on investment.

$ Cost of Kitchen

(4) Bathroom


Lastly, the bathroom was in great shape. The bathtub was almost new. We decided to spend a little extra to replace the vanity and paint over the closet door, instead of replacing it.   

$ Cost of Bathroom

Investor’s Tip: Once you have done enough projects with the same contractor crew, they get a sense of your taste and budget. My contractors know what color walls, style of flooring and finishings that I like. My go-to color for wall paint is Sherwin Williams Repose Gray, as it is timeless and can match any color flooring/cabinetry. I use it on all my rentals. My contractors appreciate that I am consistent in my design choices because it makes it much easier/quicker for them to bid out jobs for me. Once you’ve done enough rehabs, have a list of all favorite items and send that over to your crew! It will save time and effort!

Before Rehab

After Rehab

Overseeing a Rehab 1000 miles Away:


John, myself, and the contractor communicated with one another daily. Our contractors are a great husband and wife team, with the wife being the main point of contact. We found that the best way to communicate was through the Facebook Messenger app. It was easy to send photos and our exchanges were easier to keep track of vs. texting.


The rehab took exactly three weeks to complete. We would receive progress photos pretty much every other day when something was either in progress or nearing completion. I have worked with this team in the past and trust that their work is of high quality while being considerate of our cost. Our contractor was paid 50% up front to start the work and to purchase all materials, and then 2 draws of 25% each, with the last payment once a final walk through had been completed.


Checks and Balances


Even though you may trust your contractor, there can always be things that can be forgotten. Small items like a toilet flapper or furnace filters can be easily forgotten and both of these items are hard to notice. A missing toilet flapper can cause plumbing issues when the tenant moves in, and an old furnace filter can cause your tenant’s utilities bill to skyrocket!


The best way to ensure that ALL items in the scope of work are completed is to have an outside individual walk the property before handing over final payment. In this case, we had our property manager walk the property to ensure all items were accounted for. They actually found a few items that needed attention that were not noticed during the contractor’s initial walk through. These items cost an additional $300 to fix and we released the funds to the contractor once they confirmed that work had been done.


Overall, we were very pleased with the finished work. We hired a professional photographer to photograph the remodeled property and sent the photos to our property manager to list the property for rent.


Now, we wait for the appraisal to be ordered and the place to get renting, completing the next two phases of the BRRRR strategy (R)efinance and (R)ent! 

Related Articles

Facebook Comments

About Julie Phan

Dr. Phan is the co-owner (along with her husband, Toan Nguyen OD) of a highly successful optometry private practice in San Marino CA while also running a Sam’s Club sublease in nearby San Bernardino. Always the entrepreneur at heart, Dr. Phan also invests in rental properties. Through leveraging a talented team of realtors, contractors, and property managers spanning five states, Dr. Phan has steadily built a real estate business that generates consistent passive income. Along the way, she hopes to inspire friends, family, and colleagues about the value of real estate investment so they can work towards their own financial independence. Follow Julie's REI Journey on IG @ house_hustle at instagram.com/house_hustle/

Leave a Comment