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what's up everybody its Kevin I'm super excited as a property that we have been renovating is finally complete and rented out and now I'm going to show you exactly how we were able to take a $450,000 property put $50,000 into it with zero money out of pocket and make a hundred a thousand dollars of profit in one month and you can do it as well so let's walk you through it and you're going to learn some awesome tips and tricks if you have any questions or if I missed anything feel free to leave a comment below and in honor of the success of this deal feel free to take advantage of 20% using coupon code wedge 100 let's get into the video so first things first let's give you a reminder of what this place looked like here it is this is what the place looked like when you first walked in it had these weird columns multitudes of different flooring here a little bit of Wally over here to the acoustic ceiling the old ceiling fan look at the dust on that ceiling fan I'll tell you when I go into the kitchen here people were saying this house they wouldn't touch it with a ten-foot pole they would just run from it and I'm like I don't know I mean it's it's not that bad I guess for some reason it was just kind of like the look of the floor the look of these cabinets wallpaper this brick in the back this house had this edition of back here this sort of room that was used as an office and my next favorite thing that people were freaking out about in the comments is when we jump into the master bath this was the condition of the master bathroom I mean it was almost a little bit hard to believe that somebody was living in this at one point it was a rental property but still I mean I don't even care the rental property I mean bro just the the sheer amount of dust and damage and the shower door this doesn't even do a justice I mean when this was opened up it was it was rough so I'm in luck I found this video on my phone that I sent to my bathroom guy talking about the bath rooms and so you can see me kind of tapping this old fiberglass here but you could see some of the other damage you know the missing kind of lines over here and the other kind of damage and discoloration and just yeah like I don't even know I don't even remember touching it it's just like oh look at this just overall likes right let's go over to the master watch this I'm gonna fast forward here to the master this is what you just saw watch this oh yeah let's just play that that is the tile up close I mean oh I'm gonna get it at the bottom it's like how does that even survive anymore and I think I'm like what are we gonna do well and now it's time to show you the reveal what we turned the property into here you have my favorite style of brand-new driveway where you do this nice like 12 inch ribbon and then you do these diamond sort of partitions in between I really like this look obviously we painted the outside notice I actually love a using concrete paint you'll see this in the backyard to just clean up a concrete as well I also like keeping the front doors when I can mostly because it's fine you know you don't have to spend two grand on a new door when you can paint it and spray-paint the hardware and put in some new hardware over here inside here's our reveal and remember it's not supposed to be like the most high-end property you've ever seen but it's certainly a big difference from what we had just for giggles here's that reminder of what we had and compare it to this notice what we did we used my favorite luxury vinyl plank flooring four inch craftsman baseboards these are really in my opinion Pro moves they're simple they're inexpensive they're waterproof they're easy to install while baseboards not waterproof for the flooring is you'll also notice right here we removed those little posts that used to be in that window those were non load-bearing and also the wall that was right here was not load-bearing either which was wonderful remember this kitchen notice how you have these cabinets right here and what we actually did is we remove this bar removed these cabinets and made this one flat countertop which now a little bit of a problem because look what we lost we lost the cooktop the vent hood and the sort of oven with warming drawer here but I figured we'll wait a minute I could put an oven right here have a flat countertop and get rid of literally all of this and have a much more open surface you'll find because we did so much removing over here we have new cabinets on this side but on the other side see these cabinets over here how rough they looked well notice what they look like with some sanding and a good coat of paint there you go these are the same exact cabinets that you saw that were kind of rough and ugly and on this side these are new cabinets now I was a little frustrated that I spent five hundred like seventy seven dollars on three cabinets I'm happy I didn't have to replace all of these especially with all these drawers everything about the cabinet's that are there is fine they're clean and beautiful and work fine so there's really no point to spend that extra money all of the materials by the way that we use on this project including all of the appliances light fixtures and everything are going to be linked in the investing a course but look how much more open this kitchen looks now also note where I like to save money and spend money over here you can see this nice faucet stainless steel sink basin this a little bit more expensive but up here I put a $20 boob light in this faucet was probably closer to $250 this LED panel rather than spending the money to put in can lights which usually you'd see people put in for canned lights I decided not to spend that money and instead I put in this hundred dollar light fixture which provides just as much light and we didn't have to do any kind of drywall cutting new wiring the wiring was already in place for that now another thing noobs like to do is they like to go in and replace all of the doors but knowing what I know about being able to sand and paint and refinish these wooden surfaces look how nice they look and all we did was replace the handles we didn't even do the hinges we left the hinges painted and these bronze knobs really pop this hallway and make it look pretty dang nice just for comparison take a look at that same hallway here as to what he used to be with this sort of older gold hardware and then pop on over into the bathroom look at that difference I mean this is the original vanity and all we did was refinish the face of it and throw on a new countertop and paint that mirror new faucet and you're looking much better in that room already you actually see in this bathroom the vanity light which you'll actually notice when you go in is an expensive like $90 vanity light but I've got a water-resistant boob light over there because I didn't want to spend more than like $30 on that one also remember how nasty the shower and bathtub were look at what they look like now it's the same fiberglass see usually a noob would go in here and they would just demo all of this they'd literally tear out everything I didn't have to do that I left the vanity I left the tub and I didn't spend that extra money doing drywall repairs plumbing repairs for things that really wouldn't have made a difference now here's got to be my favorite reveal and to make it most impactful remember what this shower looked like it's well here you go this is the after of that same shower and all we did was reglazed it it's crazy it's absolutely incredible what we were able to do by reglazing this shower the shower absolutely looks a phenomenal now and that's even like a 2-headed showerhead you could take out the middle one and still make it rain because that's what we're doing here we're making this play the rain this is great this is $130 vanity these are the pro moves to really help you save money now I'm excited to show you the actual budget on the deal that is literally the amount of money we spent to fix this place up and then we're going to get into return on investment and how I got this place for a zero box by the way you could watch this video which is also a linked below to see the actual same original budget so on the left here we have the original budget items the driveway the demo landscaping paint scraping the ceiling the electrical stuff the plumbing the handyman work the flooring costs the bathrooms the appliances the counters waxing and fixing the glass and all that all in all we wanted to put in just $50,000 we ended up spending pretty close in actual expenses on all of our expenses we were a little high on certain handyman and material things but we were low on other things you could kind of look at these and kind of compare mostly we saved a lot by doing handyman work and reglazing in the bathrooms that really helped keep our bathroom cost low we used uh some epic coupons and price discounts which we talked about how to hack these discounts all the time on our private livestreams countertops those are always expensive spend a little bit more on the windows but all in all the total cost of this project ended up at drumroll ah there it is look at that forty-nine thousand one hundred twenty-five dollars and we had budgeted forty nine thousand eight hundred dollars so we spent less than the fifty thousand dollars we were expecting to on this remodel we're super happy and just to give you a little bit more of exactly how I spent the money and pretty much the order I spent it in I think this is actually almost the exact order of how I spend all of the money to get the entire property put together in record time the entire project was done in four weeks and now it's rented so let's get into how I got this property rented I use the good old Zillow rent manager and then I ripped pictures literally from my 3d scan and posted it on hello I did do a little bit of light retouching as you can see here in my opinion these photos are beautiful they're awesome pictures and I literally ripped them from the 38 anyway I put the ad up on Zillow and on the MLS just to see where I would get more hits and I'll tell you within the first 24 hours we got eight interested parties in the house from Zillow and one realtor that called on it from the MLS and so now it was a question of okay well who we gonna rent - and it's kind of you get like this is the part where you get a little bit nervous because you're like oh gosh if we get about tenant we're screwed like it that's that's you know a monthly payment that we have to now carry like that's bad knock on we have never had an eviction and when I say we that's a Lauren and myself and we do not plan to so what did we do while we had multiple people interested in taking applications we ended up renting the property to the very first people that put it in an application we certified their income their position but we of course ran their credit on both Experian and TransUnion as I always recommend everybody do and ultimately we ended up renting the property to them for $2,800 per month within 48 hours of putting the property up for rent we had a signed lease and we're basically done all right all right so you want to know the numbers okay here the numbers okay so we bought the deal for $450,000 we put 25% down now wait a minute Kevin that's not zero hold on I'm getting to the Sira part just an buy that gives us a load of 3 37 5 some closing costs some fix-up money we spent a hundred sixty-five thousand six hundred dollars buying this deal with total rents of about $2,800 and then some typical expenses for us at least because we managed the property ourselves we just fixed up the property we've got principal interest taxes insurance that puts our total expenses somewhere around 20 185 and you know that leaves a little bit of a buffer obviously in case there are repairs or unexpected things that come up which we're not really expecting because we just fix up the place or a vacancy but still rents $2,800 what does that mean that means a cash flow on this deal is a whopping 614 dollars plus the fact that the tenant is paying off the loan for me by about four hundred fifty four dollars per month this place is generating about a thousand $69 per month solely in cash flow and principal pay down now if we jump over to what I call my return on wealth analysis you'll see that a thousand $69 is actually about seven point seven five percent with a zero market appreciation on the hundred sixty five thousand dollars I invested now this is where it gets kooky okay the long run average appreciation real save is three to five percent maybe three to four percent well let's just add one percent appreciation to the steel and watch what happens to my return on investment with one percent appreciation thanks to the cash flow and principle pay down I'm at a ten point four seven percent return add in three percent appreciation it gets insane fifteen point nine percent return obviously I'm not gonna go higher than that although obviously I could but I'm not because long-run appreciation trends is more what I want to focus on it gets ridiculous if you have very high appreciation years now people often want to know hey Kevin why don't you sell the property I mean if it's such a good deal if you bought it for 450 you were on budget or under budget and you know it's worth six why don't you sell it and take the money well here's the problem in my opinion with selling when you sell real estate you have to pay not only a lot of fees to sell but now you pay what are known as short-term capital gains is just a fancy way of saying I'm basically paying like fifty percent of my money to the government so if I sell and let's say I clear a hundred grand in a profit because we get multiple offers and you know the selling cost get cover whatever let's just say we clear a hundred grand in profit I give the government fifty thousand dollars and so now it's like okay so why don't I sell well if I want to use that fifty thousand dollars guess what I could do I can pick up my phone and go ahead Bob I got a house that has a lot of equity in it do you mind lending me 50 grand and I'll pay ya I don't know seven percent interest or a little more cuz its private money or don't tell Bob I'm willing to pay more okay don't tell him that and you could put a lien against the house and I'll get to use the 50 grand and guess what happens when I now use that 50 grand I don't have to pay taxes because taking out debt doesn't trigger the IRS to tax you know no CPA so don't sue me bro I'm just some dude on the internet okay also remember in real estate you never have to pay taxes you could literally continue to tell the government hey you know what I'll catch you later on tax that's known as a 1031 exchange and you can do that over and over and over and over again and in the meantime I can milk the cash flow my net worth can grow I can take out a little bit of debt against it to go finance other projects and all of a sudden you're able to balloon an empire without ever paying a dime in taxes and then you know people are usually like whoa Kevin you know one day you're gonna pay taxes ha ha ha no I never actually planned on paying taxes see let's say in a few years I have a 10 million dollar portfolio but then unfortunately I get struck by lightning or hit by a bus and you know I guess things didn't work out that well as planned and technically I would have owed the government like you know taxes on 9 million dollars in gains or something like that the government will feel sorry for you and they're gonna do what's known as step up your tax basis which means your heirs don't have to pay any taxes like huh real estate is like oh my gosh I freaking love it ok so how then did I get this property for no money well because I invest in real estate regularly and now I'm a coffee drinker already this is my first cup in forever it actually feels pretty good anyway because I'm a real estate investor I have a bunch of other properties and on one of these properties I have something known as a home equity line of credit it's kind of like a credit card except it's alone against my house that I pay zero money on when I'm not using it when this deal came up I didn't have $165,000 sitting around because I usually don't instead what I usually do is when a deal comes up I decide ok let's swipe that credit line so to speak kind of like swiping that credit card I transfer $165,000 to this deal by the deal fix it up place the tent now it's at this point something you might be figured yourself oh my gosh but that means your cash flows are gonna be less well let's just go ahead and put it in the spreadsheet and find out I'm gonna go over here to secondary debt and put in $500 as an extra expense now when I go to the top my cash flow is only one hundred fourteen dollars but I'm gonna get some extra text benefits now because I'm writing off so much more debt I'm actually going to be saving around $200 per month in Texas thanks to the tax write-offs on this debt plus the fact that the tenant is paying off the loan when I drop now down to my return on wealth calculator you could actually see that my return on wealth hasn't changed that much five point four nine percent with zero percent appreciation eight point two one percent with one percent appreciation and thirteen point six four percent with three percent appreciation guess what I make it my mission to do now my mission any time I buy a property like this is every extra dollar I make from things like YouTube ad revenue or selling my real estate investing course which gives you all of my knowledge that's in this brain on a platter in little bite-sized pieces that you can absorb and learn and use for the rest of your life I take the money and I start paying off my credit line as fast as I possibly can and my vision is once I pay off that credit line I am now ready to buy another deal so to me I actually don't keep much money in a savings account because the way I operate is as soon as my credit line goes to zero I go buy a good deal with that open credit line then I work on paying off that credit line as fast as possible because if that credit lines interest rate is say 5% I'd rather pay off that 5% really fast then put money into a over at wealthfront which I really like but this is just my strategy for having money available on a credit line park it into a good deal secure it then pay off the credit line then do a deal again pay off the credit line then do a deal again after credit line and once the credit lines are paid off the cash flow on these deals is amazing and my wealth literally shoots up a hundred grand closing the deal keeping it forever not paying taxes and if I want to use money against the deal I could just get a credit line on this place or I could call a bob to lend me some money or somebody else it doesn't matter plenty of people willing to lend you money when you assets that's why I always say start with building assets and folks there you have it how I bought a house for zero money on a pocket and made a hundred thousand dollars instantly on money that I never plan to pay any taxes on at least certainly not any freaking time soon and it's gonna open up my doors to more and more cash flow and as always if you want more meet Kevin follow me on instagram at meet Kevin you're welcome to DM me there check out the courses a link below we have the real estate investor course we have the real estate agent course of both of which we'll have the coupon code wedge 100 available for 20% off and we have our crash course in person real estate investing events where you can learn from me as a crash course one-day seminar style interactive get all your questions answered and the next stops are going to be Seattle Austin Texas Miami Florida San Francisco and others to be announced super excited to see you out there thank you so much for watching and we'll see in the next video
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