Tenants ABANDONED the Place! Walkthrough of My Rental Property

Hey, everyone, it's Mike andes, traditionally from landscapebusinesscourse.com but today we are in one of the rental units that we just recently renovated and are renting out now as part of my new real estate ventures. So I've always wanted to get into real estate ever since even starting Augusta. I would listen to BiggerPockets, the podcast. I'd read books about real estate, knowing that this was something. Eventually I wanted to get into that a little more passive and would be a storage for wealth without having a lot of taxes. And so really, for me, the real estate thing is more of a taxation and, you know, hedge against that. Obviously, Augusta is where I make the money and then all the other businesses, but this is a place where kind of long term growth in terms of net worth will be, and that's in real estate. And so another big part of the reason why I've gotten involved in real estate a lot this year is as the franchisees grow over the next three to four years, they're going to start needing that next step of business help in terms of where do we now spend the money that we're making? The first couple years are just growth and you're putting all that money back into the business, but three, four, five years go by if you're running a profitable operation. Now all of a sudden you need to actually figure out, where am I gonna put this money so I'm not getting taxed a lot. Where can I put this money so that I can build my net worth, get passive, more passive income. And so I know I need to learn those things. So this year's been a big start to my education in terms of actually putting into practice things I've learned in terms of real estate, stocks, things like that. And so this is kind of our. One of our first deals, or second or third, but like one of our first few deals. And this is part of actually three duplexes that we purchased in Ferndale, Washington. And when we purchased them, it was in the middle of the eviction moratorium. We're still going through that, and I'll talk a little bit more about that in just a second. But this unit specifically that we're in right now had just been remodeled. And. And the plan is that as the tenants move out, we are going to remodel them up to this standard. And so previously we have a video that we'll try to show throughout this one of what this unit looked like before. And you'll see it was like totally different. We did not completely change this And I'll walk through, as we go through, showing some of the things we did change and did not change. At the end of the day, we wanted to make sure that the improvements we made increase the rent value. And so we basically are going to increase the rent on this specific unit by $200 per month, plus the utilities that they used to not be paying. So really, we're increasing the price on this unit by about $300, based upon the renovations we've made and the fact that it was probably about $50 per month under rent value when we purchased it originally. So that's kind of the deal. This is a duplex, so there's another unit in this building. It's two stories, it's three bedroom, two and a half bath. It's about 13, 1400 square feet. So we'll get some shots out on the exterior later, where we've already done all the painting and we painted all three duplexes, all three buildings. And I think that really changed the exterior. And now for the interior, as each unit becomes available and people move out, we are going to renovate it. So.

All the duplexes were built in 2008, so there's not like they're super, super old. So not everything needs to be changed. The bones of the structure are really good in terms of things like foundation and the electrical, things like that. When we purchased it, it was a lot of just cosmetic things that needed to be changed to just improve the value and the quality. So when we look at this again, at some point, we'll say on the side or something, we'll show before as we go throughout the house. But in here, the things that we really focus on when we do the renovation, because again, we're trying to focus on increasing the rent value. So even though these are old cabinets, and if you look at the before videos, they look horrible. But they were good enough. They're solid wood, and if we ever wanted to, we could paint them, but we didn't really see the need. They looked pretty good. But we did go ahead and upgrade to the quartz countertops. These are a bit of an upgrade. This is definitely kind of a level 2 upgrade in terms of renovations, but we figured it was a good investment because the main entrance is right, right here that most of the tenants will walk through. There is a main front door, but this is kind of the main entrance. It goes right into the kitchen area. So we wanted this to kind of look good right from the onset. So we got new countertops. We have a new fixture here. We did not change the actual sink out, but the fixtures really, when you're trying to increase the rent value and you're wanting to. What should I renovate to actually increase the rent value? It's going to be the things that the tenant actually touches. So things like water knobs, handles, you know, any sort of fixture, light switches. Those are the sort of things that people touch. Those are the things that you really want to make sure are changed and brand new if you're going to renovate a space. So new countertops. These are quartz. Really, really nice. Again, probably a little bit higher of an upgrade that I would usually do. Usually press board would be just fine. But again, I know I'm going to keep these units for 10, 15 years and these will look great the entire time. You know, you can't beat them up. You can't chip the sides. Like they're just great. We did go ahead and replace the oven and the range.

As well as I think we got this new. Yeah, this is new. The dishwasher. Sorry, this is actually my first time here, so some of it I'm exploring with you. We also got this brand new for the fridge and you can see from previous videos that this was definitely in need. It was pretty beat up in the past and so definitely was in need of a new one. So again, these are the things that a new tenant's gonna look for. And that's why we're able to increase rent is like new appliances is also a low hanging fruit to be able to improve the rent value of the property. So when we went through here, you know, obviously it's kind of like the living room. We kind of had this funky closet situation that we couldn't find any doors for. So we basically just ended up painting it. They can make this kind of like a shelf or they can put their TV in there, whatever it is. But when we painted, we didn't replace the trim. Again, we're just trying to improve the rent value and changing out the, the trim to really nice stuff was not going to necessarily change the rent value. So we ended up just painting it over the existing oak. But we did rip out all of the existing flooring and put luxury vinyl plank in. This stuff is like bulletproof. It's, you know, water can spill on it, it's not going to get stained and it's just super, super rugged. So got that all new in as well. The entire renovation with all everything that I'm showing you here today was $26,000, including all the appliances, flooring, Paint, countertops, all the new fixtures. So throughout the whole place we got new light fixtures, we have new water fixtures. Again, the sink was not. Was the same, but we changed out the countertop. Same cabinets as before, new toilet. Again, these are the things that people touch. Things like the towel rack, the toilet dispenser thing or toilet roll dispenser. All those sort of things are the things that the tenant touches. And so we try to improve those. We didn't have to change any of these, just have to clean them up. Like these were absolutely miserably dirty before, but just a good washing of the washer, dryer, cleaning it up, looks just fine. And again, the nuts and the bolts and kind of the skeleton of the house is really solid, like the hot water heater. And it's solid, it's relatively new. We had to change several of the doors out just because the previous tents did leave this place an absolute mess. They had punched holes in a couple of the doors. So there's kind of a storage space in here and so just kind of a nice storage space underneath the stairway. And again, we replaced most of the doors in here because they had punched holes in them. Literally they punched them or kicked them or something. So not the most expensive solid oak doors or anything like that. And if they're not new, we painted over them. So you know what, to be honest, I don't even think this one is new. It's just been painted over. But the ones that are new, like this one here, you know, they're not like the most solid. You know, these are not like super expensive luxury apartments. So just making sure that you don't over improve is something I've learned even from my very first deal where I definitely over improved the property just because I was going to live there. And then when you start renting out, it's like those things didn't really move the needle. But when the. When the. This is just a closet in here, kind of a coat hanging closet. But.

When the tenants moved out of here, this place was an absolute wreck. They had had cats and dogs and there was pee stains throughout this whole thing. So I had to redo the carpet in here. And so this is brand new carpet. But yeah, there were stains. It was horrible. The heater was just absolutely caked with dirt. And the people who were here before were kind of like. What's it called? Pack rats? I don't know. But they had so much stuff in here and like it was just like had changed the paint. They had, the cats had been Everywhere. So there's pee stains and like, it was just horrible. This whole place was matted down. The carpet was like threadbare. But yeah. So change up the carpet inside the living room. Going upstairs now. Everything's been painted. A brand new carpet here on the stairway, and lots of light coming in from that kind of window up above the stairs there. So going into the master bedroom is now upstairs again. This is three bedroom, two and a half bath. This is the master bedroom. Pretty much standard paint, carpet inside the bathroom did luxury vinyl plank on the floor. And then we did countertops. Ooh, that's nice. They put a new fan. It's very nice and quiet. I just turned it on to realize that it's kind of cool. So the bathtubs, this is a big thing. So we came here. There was literally holes in the bathtub. The bathtub, the drain was completely clogged and this whole thing was full of water that had probably been in there for, like months. It was horrible. What actually happened is this tenant abandoned this unit. So when we came in, we started like improving the place. We started telling the tenants, hey, look, your rent's going to go up eventually after the eviction moratorium, and you're going to have to pay for utilities. So these people left. They literally just abandoned their unit. We had to break in the window, create new locks, like a pain in the neck. But anyways, this was a big learning curve for us. So this looks new, but it's not. It's just been re glazed. When we. When we came though, it was. There was holes, there was parts that were scratched really deep. It was really, really bad. And we thought we were actually have to take it out. It cost us like eight grand for two of the tubs to be removed because they're gonna have to cut them in pieces, remove it, then redo all of the wood part and then put a whole brand new tub in here. And to do that, that tub had to come in pieces. Since it's going through a doorway, it couldn't come as one big piece. It was gonna be extremely expensive for about, I think it was about $1,200. We got the whole thing reglazed, holes patched. This is all just fiberglass. But now it looks brand new and so it looks really, really good. Happy about that. Looks like we need a shower curtain. But again, in here, everything that you can touch and is pretty visible has been changed out. Whereas things like cabinets, the sink, things like that just need to be cleaned really well. This is the walk in Closet for the master bedroom. Looks like they just painted over everything. Just make it all look clean and nice. So, traditionally, if you're looking to try to improve the rent value, things that, like, simple things, are the things that move the needle fastest. Literally cleaning probably the biggest thing. Then you got, like, paint, Then you got things like carpet. Then you got the things that you can touch. Handles, knobs, light fixtures, and water fixtures. Those are the sort of things that actually move the needle in terms of the value of rent. From kind of the lowest hanging fruit upwards. So again, same thing in here. Reglaze. This. This is all original. Just needed to be cleaned. It looked horrible before. Again, it was clogged up the whole nine yards. But we did get a new toilet. I don't think this is new, actually. This isn't. This has just been cleaned and then put together a little bit nicer with a new water fixture. And so this is definitely an upgrade. It's little stuff like, you know, things we won't change out. It's just stuff that needs to be cleaned. So here, two more bedrooms. Pretty simple stuff. You can kind of see outside the window here and see the other units. Lots of natural light throughout this whole place. Honestly, you don't need a lot of lights. But new carpeting, new paint, new doors on these as well as tracks, especially these older units. These can come off the tracks. It looks really cheap, but these work great in terms of just replacing the tracks as well as the doors. So this is the second, third, I guess, third bedroom over here. This one's a little bit smaller. Probably used more as an office or storage or something like that. But again, this was packed solid of boxes and junk and tons of hair. It was absolutely gross when they abandoned this unit. Fortunately, they didn't leave all their stuff here. That can get really complicated in terms of you have to keep it for so long before you can throw it to the dump. Fortunately, they took most of their stuff. We did take several trailers of garbage, but, like, all their junk, fortunately was out of here. So that's basically it. Again, we spent about $26,000 on the interior of this property, which we probably could have got away with about $15,000. Honestly, to be able to spend on this and it still be pretty good. But I know I'm going to keep this for quite a long time. So we did a little bit higher upgrades on things like the light fix and the countertops that I probably could have got around. And, you know, maybe I just could have cleaned the carpet really well and it would have been half decent. But I know I'm going to keep these properties for at least 10, 15 years. And so, you know, not having to deal with those things again. Same with the luxury vinyl plank. Like, yes, we could have left the old oak in there. It looked just fine for the flooring. But I know that, you know, if I'm going to put, you know, the countertops, I might as well do the flooring. Pay extra a little bit more. Yes. But I don't have to worry about stains, I don't have to worry about people dropping stuff in the kitchen and any of that sort of thing. It looks really good down there. So again, improving the rents by about 200 bucks a month. Plus we're charging utilities directly to the tenant. In my opinion, if you can charge the tenants the utilities, it's better because then they actually use the water, they use the electricity as if they. Because they are paying for it instead of just like using it willy nilly, leaving stuff on running water, you know, washing machines, all the rest of it. So they'll be paying those from now on. Now the thing that complicates all of this is the fact that we are currently in an eviction moratorium in Washington state, which means we can't evict people. So even though these people we did not want in here, we couldn't get rid of them even if we wanted to. Fortunately, they just left. However, we do have another tenant in this duplex. Actually the unit right across through that wall that is essentially.

Not paying rent and doing illegal activity. They're not paying rent. Part I understand it's the eviction moratorium. However, they have way too many people living in there. They're not on the le, they're doing illegal activity. So we are actually taking, you know, taking, going to court and the whole nine yards to try to get them out of here and just using the law because they, even though the eviction moratorium's on and they don't have to pay rent, they still can't do a legal activity and have like 20 people living in there and a whole bunch of other stuff that we won't go into. So we're trying to get rid of them. Should be out in the next few weeks, fingers crossed. And then we'll do the exact same thing in that unit next door. The goal here is that every single apartment complex or building that I get when they move out, that we do the exact same renovations. So we already, for this other unit, that we're kicking people out and giving them papers and the whole nine yards, they literally the day they move out, we have contractors coming in. They are exactly lined up exactly the way that this one went down. So this one took us a couple weeks through the whole renovation. We'll probably have this down eventually down to like a week. Just because we'll be doing the same products, same contractors, same colors, everything will be exactly the same in terms of the renovations. So just trying to systematize that, make everything the same is kind of the goal. Whether it be from the paint outside to the type of luxury vinyl to the type of carpet, all of this is the stuff that we want to be renter grade and be long, you know, really have a good lifespan and longevity. And so yeah, this is the first unit that we renovated. And Again, this is $1,700 per month. Three bedroom, two and a half bath. And I'm looking forward to getting more of these units and improving these. This helps also just even with the renovations, helps with taxes, being able to do all write offs. And so just trying to balance that out in terms of what I know my tax liability is going to be and then what I should spend on the renovations to kind of, you know, balance that out. So this is kind of the next step of, you know, kind of the business journey is the investment side of things. It's a kind of a next step that I know I want to be really knowledgeable of. So that in three, four, five years, when a lot of franchisees have grown their businesses, they've become very profitable, they're going to want to know, where do I put this money now? Because I don't want to pay 40% of it to the government. Where can I put this to be a tax haven and build my net worth, build.

My wealth for my family and for my children? So this is kind of the next step. Hopefully you enjoyed that. Hopefully that was helpful. If you have questions about real estate, ask me below.

Literally all of this stuff I've learned through trial error, Bigger Pockets, other books about real estate, and I've been listening for like five or six years. Eventually you got to pull the trigger. Eventually you got to get your first deal. Eventually you got to go out and get your first loan, you got to go get a pre approval letter, you got to go look at properties. And I've been doing that for a long, long time. And it's only been in the past year that I've gone above two units. And so this is really kind of fun. Now we're up to 10 units total. And so as we kind of renovate and improve the properties. I'll try to bring you along for the ride just so you can kind of learn and grow. And if you have questions that I might be able to ask answ, ask them down below in the comments below. Thanks so much everyone. Have a good day.