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A Landlord Case Study: Does it Make Sense to Renovate Your Rental?

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Expensive Looking Facelifts that are Easy on the Budget

Speaker:

Joel Bienvenu - Joel

Moderator:

Rich Merlino - Rich

[Start 0:00:00]

Joel: I’m very impressed. I really didn’t know what to expect. When Rich invited me to come, I asked him what do you want to hear from me, so he suggested talking about some projects that I’ve done and some things that I’ve done for some landlords in the past that have given them some pretty good bang for the buck. First, I’d like to define what a handy person is and that’s the politically correct gender-neutral name for me.

Audience: [laughter]

Joel: It’s a person skilled in a wide variety of repairs, typically around the home. They include trade skills, repair work, maintenance work, both interior and exterior. We’re not general contractors. I’m actually in the process of getting my license. Just to add a little value to some of my projects, primarily more on the private side of things, but we’re not the person who comes to your house and rakes your leaves, unless you want a really expensive leaf-raker.

Now we’re generally perceived as being a little more cost-effective than hiring a general contractor to some of the same types of jobs that a contractor would do. As a matter of fact, I do work with contractors specially when it requires pulling a permit.

In why we’re considered a little less expensive is because we often –

I skipped ahead one. Sorry.

We often operate as a one-person LLC, so we are pretty low overhead. Pretty much my office space is my basement, a 1,400-square foot shop. I can fabricate things. I can build things, but we also have the experience and the tool to handle a lot of different projects. In the last year, I spent probably $3,500 in tooling—compressors, nail guns, portable saws. Nail guns are very important on old, old homes specially that have the plaster and lath.. You try to hammer something into a wall like that, plaster falls down. You hit it with a nail gun, it doesn’t happen.

We specialize in the small to medium jobs, the jobs that the general contractors are too busy or don’t really want because there’s not a lot of money in it. In addition to actually fixing the problems, I think many of us can bring to the table more of a complete project management. We do the work. We can bring in subcontractors. We can pretty much start to finish get it done.

In the year and a half that I’ve been doing this, I’ve developed a lot of contacts with other handymen in the area and specialists. Plumbers, they can sometimes be a little hard to get stuff done with, but I got a couple that I work with that because I’ve developed a relationship with them and I’m kind of their advocate when it comes to say you hiring a plumber, if I call them, he tends to respond to me sometimes a little better or not.

Okay, the good, the bad, and the cheap. I think a lot of you have probably seen this slide before, pic 2. It’s pretty much try to do three, that rarely exists. This graphic says it doesn’t exist, but you can almost get there. You want it done good and fast, it’s going to be expensive. You want it done fast and cheap, it’s not going to be good. You want it done good and cheap, it’s not going to be fast. Makes sense? That been your experience?

Audience: Uh-huh.

Joel: Okay. I’m also a property owner and a landlord, and I understand this is your business. You want to make your properties as appealing as possible. You want to have repairs and remodels done inexpensively, but you want quality work. Throughout the years, I’ve found some little tips and tricks and things that kind of give you a lot of bang for your buck. Now finding that balance, it’s three things. You have to be creative in what you do. You have to do your research. Then most importantly, you have to have the skills to do it or find somebody with the skills to do it.

Now I promise that this is my one and only what I would consider a fairly high-end remodel. This is a 15-year-old contractor-grade white laminate, really ugly, absolutely no appeal, poor lighting. That’s the end result.

[0:05:16]

Now the components I used were solid maple cabinets. They were solid maple, black granite. I had a custom standstill plate cut, that’s $45. That’s a little high. Pretty much everything including the lighting and the appliances, I used a standard cabinet built into a closet, wired it up. There’s a microwave in that, so a little more custom work. Guess how much that kitchen costs? Anybody venture a guess?

Male Audience 1: Seven.

Joel: Seven! A little more than that.

Female Audience 1: [unintelligible 0:06:00]

Joel: Huh?

Female Audience 1: Thirty-five.

Joel: Thirty-five what? Hundred or thousand?

Female Audience 1: Well, I think it’s $3,500 because you said that cheap [laughter].

Joel: Well, this one actually when I went to do this project, I had three contractors come in and they all quoted me up in the range of around $20,000. I said, “They’re out of their minds.” I was at Home Depot one day and this 12-year-old came up to me selling cabinet refacing.

Audience: [laughter]

Joel: So I said, “Come over. Take a look.” A couple of days later, the kid shows up, looks at it, gives me a quote to reface all the old particle board pieces of crap, new drawer fronts and doors and hardware. No countertops, nothing else. Just the cabinets. Twelve-thousand dollars. I said, “You’re out of your mind.”

Audience: Yes.

Joel: I ended getting that kitchen done for about $1,200 or $1,100 and that’s including appliances, a little more than $3,500 but a lot cheaper than what a contractor was going to charge to do it, and a lot better end result than if I had gone with something like a Home Depot refacing or reface them myself. Again, that’s the one and only kind of high-end thing that I’m going to present tonight.

This is a rental unit that I have in Florida. It was built in 1961. It had galley kitchen with pink countertops and plywood cabinets. I basically reused the cabinets as many as I could, added a few, re-laminated it, new doors, new appliances. The countertop, I actually just replaced the laminate top sheet, reusing the existing bases because they were plywood. They were in great condition. They were well made. There was no damage on them, so they just needed a cosmetic facelift. This whole kitchen, somebody want to venture a guess?

Male Audience 2: Six.

Female Audience 2: Eight thousand.

Male Audience 1: Seven.

Male Audience 3: Thirty-seven.

Joel: Thirty-five hundred. A little more in line. Just on so many individual components, I can re-laminate a good condition countertop for about $500, $600, depending on the size. I’m also in the process of doing and I’ve done this in the past, one thing, the new laminates, the Wilsonart stuff is bulletproof. I was going to bring some samples here today with a hammer and let you beat on them, so you could dent them. I tried it; I couldn’t do it.

Granite tiles is another good solution; very thin grout line. A granite tile goes for about $5.50 a square foot. You can do a granite countertop or laminate countertop for about the same price. How much do you think it would cost you to do that countertop in granite tile?

Female Audience 3: [unintelligible 0:09:10]

Joel: About $600 labor included, all in all done. Laminate is going to cost you pretty much the same. The Wilsonart stuff is not cheap. That would require just a 10-foot sheet, which costs $150. That buys a lot of tile.

All right, refinishing floors. You have old properties. They have nice hardwood floors. They’ve taken abuse all the years. Typically the abuse is in what area? High traffic areas. Instead of doing full refinishing, I’ve done a lot of partial refinishing basically with a hand-sander, a hand VAC sander, basically scooped out the polyurethane, touched up any problem areas, and then urethane the whole thing, so instead of doing the $5 or $6 worth of refinish, to do it for about $1 or $2 per square foot, depending on the condition and how big the floor is.

[0:10:18]

I do quite a bit of this and I want to say a lot of my work is done private residences. I have a couple of commercial clients, who Rich is actually the first guy that hired me to work on some of his property, but since then, I’ve gotten more out of state landlords that can’t do their own work. They need somebody to be on site when they need them there. They need somebody they can call and they’ll show up.

I also have a sorority that I work at it, Worcester Polytech, that drive my wife nuts. She thinks I’m working in a tool mill in a thong.

Audience: [laughter]

Joel: And that’s not the case. I love this story. A homeowner called me and said, “Hey, my shower is leaking. It’s ruined my kitchen ceiling. It’s blown up the life fixture. It’s starting to ruin my floor. Can you come and take a look?”

I went to look. He had three plumbers in. They all want $10,000, $12,000 to replace the showerhead. Nobody ever asked him what preceded the problem. I mean the shower was like it’s 6 or 7 years old. It wasn’t there that long. I said, ‘Well, did it leak for 6 years?” No. “So it’s probably not your shower panel.” He goes, “Well, we had a clog.” “What did you do try to fix it?” We took the drain cover off. My wife went in with a screwdriver to try to clean out the clog.

Audience: [inaudible 0:00:00]

Joel: Then I went down and I see that the drain pipe and the….what do they call it?

Male Audience 4: Trap.

Joel: Not the trap.

Male Audience 5: The elbow?

Joel: The ring basically that fits into the downpipe, it had been epoxy. She chipped out the epoxy. It had a quarter-inch gap all the way around the pipe. Also when they installed the shower, there was a lot of missing caulk. There was…

Male Audience 6: Grout.

Joel: There was grout when there should been caulk. There was missing caulk, missing grout, missing a lot of things, so basically I spent an hour and a half cleaning it up, resealing it, epoxying that pipe again. I did this in April. I called the guy a couple of nights ago just to see if he was still happy. He was still happy, no problem. Guess how much does it cost him to fix that?

Male Audience 7: Three hundred dollars?

Joel: Three-hundred fifty. Close. He was tickled pink. If I had known they were going to charge him $12,000, I probably would have charged more than $350. Actually, when I charged him $350, I kind of felt that I overcharged him a little bit because it only took me a couple of hours o get it sorted out.

A lady, 1950s mid-century modern house, really cool, a lot of really offensive colors and things like that, just like bright, bright, bright yellow. This vanity front was yellow. There was no conditional issues. It was in great condition, but it just was yellow. She liked shaker designs. I said, “Okay, well before I repaint them, I have some wood. I’ll cut it strips. I’ll put a little raised edge on it to make it look like a shaker design before I paint it.” Basically it cost her nothing in supplies because I had the wood. I worked extra hours, so it cost maybe $50, $75 to add that little pocket. It was just nice little think about adding a little bit of pop to some of your stuff.

Materials – two skylights that I trimmed out. They were brand new. This one actually had two of them. They wanted a 1x6 tongue and groove. The material was about $300. The second one, the lady had just spent $1,000 to have the skylight installed. She didn’t have enough money to really do them up in the tongue and groove, so I used a wainscot, a quarter-inch pine wainscoting. Material is less than $100. They also saved about $100 in labor. If you ask me, I’d like the look at that one better.

Okay, another thing I do is repair appliances. Yes?

Rich: I don't have a lot of skylights in most of my apartments, but I get the overall point they were talking about that just because somebody tells you something [unintelligible 0:15:150] that doesn’t mean that that’s your only option. What would you recommend to landlords who are given a high price because I think every price is high regardless of what it is?

[0:15:28]

Joel: No kidding.

Audience: [laughter]

Rich: What advice would you give to landlords who are given prices about things, how to find out what the breakdown is, what materials are being used, and how to save that money because if they don't have you in their house and we’re not fixing tiles.

Joel: Right. I always ask most of my commercial, residential customers like, “Do you have a budget in line for this? What do you want to spend? What do you do? What do you spend?” This woman with the other skylight said, “You know, I just spent the money. I don’t really have a lot. I want to get a lot of extra money to do the trim work. I want to get it done nicely,” so that’s when I kind of went and did the research on the material to offer a more cost-effective choice.

Yes, I like to ask the questions is this – I don’t really know to phrase this, but do you want a Cadillac repair or do you want a Pinto repair or remodel?” I can go somewhere in between and try to get you more towards the Pinto price.” But I just made it myself because not too many people know about Pinto price.

Audience: [laughter]

Joel: But I’ve been described as the ultimate cheapskate and I’ve done a lot of things on very, very tight budgets, and I’ve got some pretty good results, so squeezing a nickel until a bottle cracks.

I had refrigerator customer, a guy. It was an older one. He’s like, “Well, I don’t really have the $2,100 to replace the stupid thing.”

I tell you, on any higher-end appliance, 99 percent of the time, if it fails, it’s the stupid controller boards. Model dependent, you can get a new board for like $40 to $90, some of them maybe $110, but somewhere in that range. It takes less than an hour to replace it, so this was repaired for less than 10 percent of what was replaceable. I did that a couple of years ago, and no complaints, no failures yet. I’ve done the same for dishwashers, dryers, washing machine, anything with a brain or controller. That’s usually a pretty obvious failure. It loses its mind.

This is a job I did two weeks ago. I call this, this was an exercise in stupidity. It was a 1955 laminate bathroom countertop with an under-mount sink. To me, that’s the trifecta of stupid because anything under-mount, they’re going to get water up in here. It’s particle board. What happens when particle board gets wet?

Audience: [crosstalk 0:18:30]

Joel: [crosstalk 0:18:32] it swells. But this house was a 3,900 square-foot six-bedroom three-and-a-half baths, 1955 midcentury modern that was designed by a fairly influential and well-known architect named Irwin Regent in Worcester. She wanted to keep it. I said, “You know, it’s going to probably be cheaper to replace.” “Nope. I want to keep it.”

So, I rebuilt that and guess what? First thing I had was a broken downspout, so that means I got drill it, got to [unintelligible 0:19:08] it, and I got to put a new pipe in. None of the rebuild parts were made anymore.  You can find them, but it will take time, so I had to fabricate new parts out of light or similar modern parts.

Particle board had to be scraped, epoxied. This area has been [unintelligible 0:19:28] reattached. The hole for the faucet had fallen apart. It had to be rebuilt, re-epoxied ultimately. It was bare because whoever designed that sink was not a plumber and there was very little access unless you actually took the sink out, and I was afraid to do that because of particle board.

I ended up, guess how much it cost me or her to fix that sink?

Male Audience 8: Three hundred.

Joel: Six hundred. She was tickled pink, but for an extra $400, she could have gotten that. Like I said, I mean the customer is always right. She wanted that sink repaired and that’s what it took.

[0:20:18]

Rich asked Doug about using things like Trex and composite woods for treppe. I said, “I’ve never done that,” but I have used Trex for some other fun projects. This is going to fall into the “slow” because I always look for bargains. Twenty-five years ago, I would buy that little want ad advertiser magazine every Tuesday or Wednesday, and I would go through it like it was my bible, and I found great deals.

Now that that we have the Internet, buying stuff on Craigslist and Facebook marketplace I think is great. I went there the other day. I find a guy selling 15 x 12-foot Trex decking plus he’s installing the whole backload of 4, 5, and 6-footers for $150. Well, that sounds like a bargain. I emailed. I said, “Do you take $120?” He’s like, “Sure.” That’s $8 per board. Retail on that is about $30 a board. I just saved $330. I’m going to build myself a deck.

Yes, I’ve actually found very nice kitchen cabinet sets on there for $150; very short money. A couple of times, the stuff that I’ve actually pulled out of old kitchens I cleaned up and donated to Salvation Army, the Thrift Store place. Try to be civic minded.

This is kind of my ego page and we can do this quickly because Doug had mentioned the Trex. He mentioned the guy using it for trim and he called it, “The house of a thousand splices,” and that made me think about some of the things that I’ve done and I built a house on a lake. It took me 20 years to build it. This would definitely fall in the “good and slow.”

Audience: [laughter]

Joel: Because good and really slow, but I bought all my lumbermill direct, saved myself about 50 percent off what I would have to obtain that say at Home Depot. The want advertiser, I found a contractor selling. He had 200 sliding glass doors. He had big condo complex, replacing the model with French doors, sold to me for $50 apiece; I needed four, I bought eight. I sold four for over $200. All the windows were free. The heating was pretty much begged, borrowed. Everything was begged, borrowed, or stolen. I built that for about $25,000 in material costs. This is a couple of pictures of the insides, 4x8, 2x6 tanning room, 1x6 tanning room. It came up pretty well.

A couple of years ago, I bought a trunk load of Trex for $20. I used it to build outdoor furniture. It’s got to weigh 800 pounds, but it’s not going to rot out, nobody is going to steal it.

Audience: [laughter]

Joel: I have a ton of used brick in a pile in the back of my property. Then I have a bunch of extra blue stones, just kind of half buried in the middle of nowhere and I don't know why they were there. It’s natural stone. A day’s worth of work, no material had to be purchased. I built myself a patio. Did the job. Put in bamboo flooring. I wanted a plant stand, so I used the bamboo flooring to fabricate a couple of shelves, so that’s enough for my ego wall.

Now how many of you guys own properties there like in the 80- to 100-year-old range? That’s pretty much almost everybody.

Audience: [laughter]

Joel: I’m going to be honest with you. I mean those things aren’t easy to work on sometimes, and I know some of my handymen friends will automatically factor in one and a half times what they think it would normally take in a newer home or building. I don’t do that, but from my experience, yes. Things aren’t square or level, or even say whole size as some of the more modern structures.

I run into this a lot. You have an electrical service replaced. They run new wiring up to a junction box and the hard part is the wiring going from the junction box into the light fixture. A pain in the butt, so they don’t do it, so I’m going to change a light fixture. The first thing is the box is not compatible with any of new sort of light fixture. Then I ran into rotting cloth wiring, electrocute myself.

A lot of times, it has to be fixed. Cast iron and galvanized anything, rots from the inside, clogs up, rots up. If it’s 100 years old, you’re looking at some replacements, and again nothing is square. Certainly nothing is square. I don’t think I found anything that’s been level yet, and a lot of times, there’s been previous work done that is kind of a Band-Aid, and you know what a Band-Aid is? You put it on a wound, a couple of days later, it falls off. You put another Band-Aid on until the wound is gone.

That’s great, but Band-Aids in the house don’t work because the wounds don’t go away typically on their work. I’m going to ask you questions. I’ve actually thought about when I went into this business, what are people looking for and the feedback that I got from some customers over the last year and a half or so, you’re looking for somebody that can perform a variety of repairs.

I can replace a toilet. I can replace flapper valve. I can replace minor plumbing. I can do minor electrical. I can do pretty much a whole assortment of things.

Now I think some of your concerns are quality of work. You want good quality, you want to pay a lot for them, and the bigger frustrations of course – no show, bad work, incomplete work. Any others that I could add to this list? What you don’t like about ? What are you looking for?

Male Audience 9: Competence.

Female Audience 4: Clear communication.

Joel: That’s a good tip. Clear communication. That’s a very good tip. I sometimes overcommunicate. There was a Seinfeld episode where Jerry hired a guy to redo his kitchen and he asked them 100 questions daily, do you want this way, that way, this way. I can sometimes tend to bore on that, but I like to give details to my customers on what I said I was going to do, what I did, give them a little detail. Let them know exactly what were done. That’s my pet peeve.

Rich: What kind of questions should someone ask their handyman in general like what’s a good three or four questions in order to inspire clear communication with the handyman?

Joel: Tell him upfront just keep me informed of what you’re doing. People don’t ask me that; I just do it. Maybe they’re [unintelligible 0:28:10] but I do it anyway. Three or four questions? I don't know. If I were to hire a handyman, and I’m too cheap to, I’d ask them what they’ve done before, possibly ask them for what is the best solution that you come up with for one of your customers? How did you help them out of a kind of sticky situation or bad situation? How did you approach that problem? That’s a very good question.

Now my pet peeves. I know you guys have emergencies and I try to be very responsive to emergencies. If you got a leaky pipe and I’m painting a wall, I’m going to put the paint brush down and go on to look at a leaky pipe. If you’re scheduling work, try to schedule either maintenance or other jobs or other projects in it, try to give me a couple of hour because the worst thing I can do is break up a day and go and do an hour’s worth of work if I have an hour’s worth of driving, and half an hour to do a setup.

It’s more cost effective and it could give me three or four things I could do instead of driving 40 miles to change a lightbulb. Make sure the tenant is ready and knows what to expect. I’ll communicate that to you that I’m going to replace a kitchen faucet, make sure there’s not two weeks’ worth of crusty dishes in the sink and the cabinet is piled full of cleaning supplies. Just help me out there because I run into that quite a bit.

I’m here to help you keep your investments and hopefully help you come up with some decent solutions on how to make them look better and not really cost you a ton of money.

[0:30:05]

Rich: We have about 1-1/2 minutes left. Does anybody have any questions about maybe a specific project that you might have that you might like to pick Joel’s brain about, materials, strategies, or anything like that that we can all learn from? Why even? Does anybody want to talk about marijuana or pit bulls?

Audience: [laughter]

Rich: Okay, yes. Joel still has a question.

Male Audience 10: Do you have experience with refinishing cast-iron bathtubs [unintelligible 0:30:38]?

Joel: I’ve done the prep work. I’m sorry. Refinishing cast-iron bathtubs? I’ve done the prep work for it basically the acid wash, the sanding, and all of it. As far as having some of this spray ready-to-do finish, I call in professionals to do that. Yes, sir?

Male Audience 11: I prefer a phone call versus a text message. I find that texting is very impersonal, and that you miss a lot in communication with the contractor and whoever is doing the work through a text message whereas if you speak to him in person, he knows exactly where you’re coming from and what you expect of the job.

Joel: Right.

Male Audience 11: Competency is a [unintelligible 0:31:30] subject for me. I was a former facility manager in a research and development company for 15 years and dealt with a bunch of all nationalities and people and all kinds of experiences and education and stuff, but when it came down to common sense, they just don't have it.

Joel: Right. You heard the question.

Male Audience 11: So it’s invaluable.

Joel: Yes, it’s funny. Common sense is not that common sense is not that common, and I think Rich is here to give me the old [unintelligible 0:31:56] but I’m going to leave my business cards up the table there if anybody is interested. I would suggest you call me because the email address on here it not active yet but thank you very much. I appreciate you guys having me.

Audience: [applause]

Rich: Yes.

[End 0:33:09]

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MassLandlords is a nonprofit dedicated to helping owners rent their property. Presenters are not necessarily vetted by MassLandlords. Although we try to offer the best possible advice, we recommend you consult an attorney or tax accountant before you alter your business processes.

Slides are available only for members in good standing who are logged in.

Click here to watch the latest MassLandlords Business Update.

This is part of our Statewide Rental Real Estate Networking and Training series.

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