Here is an update on my renovation that has officially gone over budget, and is now costing me over $100,000 to complete - here’s the ROI and breakdown. Enjoy! Add me on Instagram: GPStephan
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I bought this place with a tenant who had already been living here for over 10 years. By the time I took it over, the unit was in pretty much original condition - which is basically another word for: it’s a disaster and needs a lot of work.
Well, those tenants ended up moving out a month ago - and that left me with a unit that needed a complete overhaul. Unfortunately, this wasn’t as simple as just replacing carpet and slapping some paint on the walls and then calling it a day…
This unit is located in a fairly desirable part of Los Angeles, so in order to get top dollar - it needs to be done up all the way, and done correctly. Plus, in order to do that - this unit needed the floorpan re-arranged, it needed another bathroom added, it needed ceilings replaced, and it needed an entirely new kitchen, etc.
So, with that…about 2.5 weeks ago, we started demolishing the unit, tearing out the walls, and seeing what was behind.
But as we got behind the walls, I began realizing that things would cost just a little more than anticipated…
Now, keep in mind - initially, I set my remodeling budget around $65,000 - just KNOWING that it was going to be more like $85,000 by the time it’s done. Because now, after doing 5 renovations…I just assume it’s ALWAYS going to cost more than I think, and it’s going to take LONGER than I expect it to…
Although this one, I admit…I underestimated, a bit too much. Even at my final $85,000 estimate… I was still off.
These are the details about the home renovation, my expected return on investment, and other questions you have asked for 🙂
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.

By Stock Chat

where the coffee is hot and so is the chat

27 thoughts on “This just cost me $100,000 …”
  1. Avataaar/Circle Created with python_avatars Ali Chehab says:

    graham: makes a video on his $100,000 renovations

    graham next week: “how i payed $0 to renovate my house”

  2. Avataaar/Circle Created with python_avatars T darkwolf says:

    I don't understand why spending 85,000 to make 600 to 700 more.
    if you take the minimum, so 600, and calculate your ROI on the extra cost. (85,000 / 600) / 12 = 11.8. It will take you almost 12 years to get that money back, but he wants to tear down the place in a few years. so he is basically losing money….sort of. correct me if I am wrong, maybe I forgot something.

  3. Avataaar/Circle Created with python_avatars Carmelle Claude says:

    It’s so weird how it still looks like a green screen even though I know it’s not.

  4. Avataaar/Circle Created with python_avatars Tina Prescott says:

    Did this house get finished before covid shut everyone down?

  5. Avataaar/Circle Created with python_avatars ALPHDORA Gaming says:

    I learned more watching grant’s videos in one week than a whole senior school year

  6. Avataaar/Circle Created with python_avatars Jose Ramos says:

    Awesome serie of videos! Thank you Graham 🙏🏽

  7. Avataaar/Circle Created with python_avatars Chuckee says:

    With a $100,000 budget you might as well flip it and sell it

  8. Avataaar/Circle Created with python_avatars Josh Lucio says:

    I'm testing the algorithm, let me know how it goes Graham.

  9. Avataaar/Circle Created with python_avatars D Neuman says:

    You could have done half of the important stuff rent it out for two years . Then you could evict for the rest of the renovation then sell and avoid the taxes . Plus enticing a new buyer with Reno's.

  10. Avataaar/Circle Created with python_avatars Carson Stevenson says:

    Eeee aaaaaau

  11. Avataaar/Circle Created with python_avatars Gary Henry says:

    That's a lot of coffee

  12. Avataaar/Circle Created with python_avatars Amina R says:

    Love you Graham but this looks like a green screen at the beginning…and on the toilet(lol)

  13. Avataaar/Circle Created with python_avatars Guadalupe L. says:

    Personally, these videos are quite great and refreshing from the usual credit advice!

  14. Avataaar/Circle Created with python_avatars LoneWolfRomero says:

    Gram I got it, your next YouTube project that will set you apart from everyone else.
    “Mentoring Millennials “
    Using your videos as background for teaching now you will take it to the next level, each video will be an episode where you will select a lucky person ( me being the first one) to mentor on a specific subject, Stocks, Real State, Retirement plan, Savings, Credit Cards, any subject you have talked about in your videos.
    The person you select will pick the subject he wants to be mentor in and spend some time with you a day or two. You will go in depth and mentor that person as best you can.
    Then you can do a follow up video on how that impact or change their life.
    Example me after I go and do the program on lets say real state, and see what I done after if I bought any real state or have made a plan etc.
    What do you think?

  15. Avataaar/Circle Created with python_avatars MyLady22 says:

    People actually pay $3k to rent? That’s insane. If people can afford that kind of rent why can’t they just buy a house? Location location I guess but that’s stupid in my opinion.

  16. Avataaar/Circle Created with python_avatars S CT says:

    You went insane! You might as well flip the property.

  17. Avataaar/Circle Created with python_avatars Joseph Park says:

    Lol graham now asking for likes for the youtube algorithm is like 2nd nature to you

  18. Avataaar/Circle Created with python_avatars BB Cord says:

    I def appreciate these remodeling videos… so thanks! 😊

  19. Avataaar/Circle Created with python_avatars Lina Truong says:

    Where do you get the money for the renovations?

  20. Avataaar/Circle Created with python_avatars Rose Manu says:

    Hey Graham for your channel I will…

    *SMASH because you're frugal
    * SMASH because you're funny
    * SMASH because you harassing me too hahahaha

    Thanks for another awesome video! Keep it up!!

  21. Avataaar/Circle Created with python_avatars David Robertsson says:

    Looks like a green screen

  22. Avataaar/Circle Created with python_avatars Manny Brum says:

    Moral of the story, if you want to renovate a house, figure out how much it would cost to demolish the whole thing and rebuild it and do that instead because it's going to cost that much anyway and just be a rollercoaster of disappointment.

  23. Avataaar/Circle Created with python_avatars Robert Clithero says:

    Have you ever done the job yourself?

  24. Avataaar/Circle Created with python_avatars Tony Kontonasakis says:

    As a union construction worker, I saw a guy with a hardhat sticker that really stuck with me. Cheap labor is not skilled, skilled labor is not cheap. Still sticks with me to this day

  25. Avataaar/Circle Created with python_avatars Andrew says:

    I'm not sure that this 100k investment is a positive return. Assuming 8% required return his 20 year NPV is -11k vs -15k just doing the "minimum" work. That is assuming he gets the high end of $2,950 per month. Graham, you need to study up on your NPV's. It would be better and easier to invest that 100k into the market generally speaking. The upside I could see is using the asset (house) as collateral for a loan to reinvest at a higher rate. Using the increase value to fund other investments but still, seems like a poor $100k spend based on time value of money.

    The thing real estate youtubers don't talk about enough is the RISK of property ownership. The housing market, like any market, has a base value of market cycle risk. Properties have more risk – physical damage, market, taste, and liquidity risk. Your required return for a more risky asset, like a property, should be a couple points higher than you expect to make in a portfolio of large stocks (and a portfolio only needs 4 stocks to diversify away 70%+ of the risk).

    Short story – Don't believe a YouTuber just because they say their investment is a good one. Graham is a marketing and real estate guy who has interest in markets. He is not a finance or economics expert.

  26. Avataaar/Circle Created with python_avatars customexhaustshop says:

    Hahahahah yes that porta potty is completely forgotten unless you have to pay for it. )

  27. Avataaar/Circle Created with python_avatars Itsahor Mr. G says:

    I got a place its alittle motel in a small town next to a inter state in between two big city's with a truck stop next to it and the owner wants 175k for it no joke either

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