How We Keep Renovation Costs Low without Sacrificing Quality or Time

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Drawing from our experience renovating over 500 rental properties, we've refined our process to achieve a simple goal: maximizing rental income while minimizing renovation costs. Here's our approach:

1. Standardization and Partner Selection

We've standardized major renovation components, which allows us to:

• Generate renovation lists using software
• Enable bulk purchasing for vendors, reducing material costs
• Decrease overall costs and renovation times

We've partnered with American Home Restoration (AHR), a company that consistently meets our high standards for quality, reliability, and cost-effectiveness.

2. Renovation Item Selection Process

1. Initial Estimate: We create a comprehensive renovation estimate including all potential improvements.
2. Due Diligence: Within the 10-day due diligence period after the property is under contract, we conduct inspections and obtain quotes for all items.
3. Item Categorization: We divide renovation items into to categories:
   • Required items (e.g., smoke detectors, door locks)
   • Enhancements (e.g., granite counters, stainless steel appliances)
4. Rental Impact Assessment: The property manager evaluates how each major enhancement would affect the rental price compared to competitive properties.
5. Team Evaluation: Our team (including you, the property manager, Selena Tasi, and Eric Fernwood) reviews each item based on:
   • Necessity
   • Cost
   • Potential rental increase
   • Competitive advantage
6. Cost Reduction: We often significantly reduce the initial estimate by selecting items with the largest return on investment and deferring others.
7. Future Considerations: Depending on changing market conditions and tenant preferences, we may need to implement certain enhancements later.

3. Flexibility and Additional Costs

• Clients can supply appliances for a $100 per appliance fee.
• Clients are responsible for any damages, non-functional items, or theft of client-supplied appliances.

4. Vendor Options

• Clients can choose any vendor for the renovation. If they select an alternate vendor, they assume responsibility for managing the process. We'll provide standardized component information to the client's preferred vendor(s).
• If our preferred vendor (AHR) is chosen, we manage them.
• We conduct periodic site visits and take progress videos regardless of the chosen vendor.

Benefits of Our Approach

1. Cost Efficiency: Our standardized approach significantly reduces initial renovation and long-term maintenance costs.
2. Time Efficiency: Our methods streamline the renovation process.
3. Quality Assurance: Partnership with AHR ensures consistent, high-quality work.
4. Flexibility: Clients can choose their own vendors or use our preferred partner.
5. Ongoing Support: We provide oversight and address post-renovation issues.

Lessons Learned from Past Challenges

We've overcome various challenges in the past, including:

• Quality issues with the cheapest vendors
• High costs and low quality of licensed contractors
• Time-consuming quote processes
• Poor workmanship and unreliable schedules

Our current approach addresses these issues while keeping your cash outlay as low as reasonably possible and ensuring the property remains competitive in the market.

By implementing this systematic approach, we ensure that renovations are tailored to maximize rental income while controlling costs. This strategy allows us to make properties competitive in the market without unnecessary expenses, benefiting both property owners and tenants.

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