Everything wrong with my $100,000 remodel ...

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Now, just to bring anyone up to speed who hasn’t seen the first 3 videos in this renovation series:

-On December 11th, 2019, I posted a video of what this unit looked like once the tenant moved out. This place had been occupied for over 10 years, and the prior owner and landlord before me, pretty much did no work to this place whatsoever.
-Then….in the second update of this series, posted on December 20th…we started doing demo, and tearing the unit apart to see what’s behind the walls.
-And finally, the last video I posted on January 10th of last month…when the cost of this entire renovation exceeded $100,000.

Now - it turns out the electrical wiring needs to be replaced, and remodeling and replacing that is an extra $10,000.

Next, we had to replace the ceiling jousts because the old beams were 100 years old and sagging. And the only way to have a completely flat, smooth ceiling was to cut them out and then replace them.

We also had to level out all the floors since, over time, things have moved and shifted around a bit, and so far - we got that done by laying some board over top. But, the bad news is that the current hardwood floors are going to be difficult to salvage and keep everything level at the same time without spending a ridiculous amount of money - so, with that, we’re going to have to put new flooring over top of this.

Besides, that though…everything is really coming along nicely.

Plus, from a tax perspective - everything I spend here can be depreciated against my rental income, so that saves me money on future taxes. For all of you real estate people out there - who love saving money on taxes - here’s how it works.

You typically have 2 ways to save money on taxes by doing this - one is by taking the total cost of the renovation, and then dividing that by 27.5 - and that means, every year, you can depreciate that amount against your income.

OR - you have the option to do what’s called Cost Segregation Analysis - This is when you accelerate the depreciation for certain items, like floors, countertops, etc over a shorter period of time…like, if I spent $10,000 on floors - instead of depreciating that over 27.5 years, I might be able to depreciate it over 5 years, as an example - saving me even more money upfront.

So, in a way - even though I’m spending all of this money fixing it up, in order to get higher rent - I’m still able to use these costs as a write off, to save money on taxes, at the same time. So, at least that’s a pretty good reason to invest in real estate, fix it up, - and it helps offset some of the amount I’m spending to fix the place up.

For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at [email protected]