Summary of "DIY House Hack Deal Analysis | Episode 25" on The David Greene Show
In Episode 25 of The David Greene Show, host David Greene sits down with Garrett Dion to dissect and analyze Garrett's recent real estate investment—a duplex in Westbrook, Maine. The episode offers valuable insights into the intricacies of house hacking, DIY renovations, and navigating the current real estate market's challenges.
1. Introduction
David Greene introduces the episode by emphasizing the importance of understanding real estate investments through real-life examples. He welcomes Garrett Dion, who shares his firsthand experience of purchasing and renovating a duplex. David humorously notes, “[Garrett] reached out to have me look at the deal before he bought it, but I was so slow...” (00:00).
2. Property Details at Purchase
Garrett Dion provides an overview of the property:
- Location: Westbrook, Maine, adjacent to Portland.
- Purchase Price: $450,000 (asking price).
- Type: Duplex with two units, each featuring two bedrooms and one bathroom.
- Condition: The duplex was outdated and required significant renovations, including outdated kitchens, old carpets, and general wear and tear.
Garrett explains his urgency in purchasing due to personal circumstances: “Me and my girlfriend had to be out of her apartment... so we needed to get something done pretty quick” (03:13).
3. Renovation Process
Garrett took a hands-on approach to renovating the duplex, undertaking approximately 90% of the work himself, which allowed him to keep renovation costs around $15,000.
a. Kitchen Remodel
- Initial State: Kitchens were outdated with old cabinets, countertops, and peeling backsplash.
- Renovations: Garrett gutted both kitchens, installing new cabinets, quartz countertops, sink, microwave, and dishwasher.
- Cost Efficiency: By opting for floating shelves instead of full cabinets on one side, Garrett saved approximately $1,400: “We saved at least fourteen hundred dollars” (17:38).
Notable Quote:
"I got completely new cabinets and sink, everything like that. Added a microwave and a dishwasher." - Garrett Dion (05:57)
b. Bathroom Remodel
- Initial State: Bathrooms had old fixtures, black toilet and vanity, and unpleasant odors.
- Renovations: Installed new shower, tub, toilet, vanity, quartz countertops, and updated lighting.
- Cost Breakdown: Approximately $1,600, covering the shower and tub ($700), vanity ($400), toilet ($200), and lighting fixtures (24:12).
Notable Quote:
"That was about $700. And then the vanity was like 400 something." - Garrett Dion (24:37)
c. Flooring and Painting
- Flooring: Replaced old carpet with LVP (Luxury Vinyl Plank) flooring, costing around $3,500 for materials.
- Painting: Painted walls, baseboards, and door frames, enhancing the property's aesthetic appeal.
Garrett emphasizes the value of DIY efforts: “That's pretty impressive that you have an entire bathroom remodel for two grand” (21:38).
4. Financial Overview
- Mortgage: Approximately $3,127 per month.
- Rental Income: One unit rented at $2,100 monthly.
- Out-of-Pocket Expense: Around $1,000 per month after rental income.
- Renovation Costs: Totaled $15,000, primarily due to Garrett’s DIY labor.
Notable Quote:
"So you went from renting to owning and paying half as much." - David Greene (36:40)
5. Labor Market Challenges
David and Garrett discuss the current labor shortage and inflated costs of hiring contractors:
- High Costs: Contractors are charging exorbitant rates, often quoting thousands for simple tasks.
- DIY Advantage: Garrett highlights the financial benefits of handling renovations personally, especially in a tight labor market.
- Recommendations: Building a network of reliable, cost-effective laborers is crucial. Garrett advises leveraging personal connections to find trustworthy individuals for renovation tasks.
Notable Quotes:
"If you can do work, if you can put in LVP, if you can do flooring, if you can install a shower insert, you don’t have to have a contractor's license." - David Greene (32:54)
"It's hard to find anyone that can go do this stuff for not absolutely ripping you off." - Garrett Dion (32:58)
6. Advice for Investors
Garrett shares practical tips for aspiring house hackers:
- Learn Essential Skills: Mastering basic renovation skills like flooring, painting, and plumbing can drastically reduce costs.
- Leverage Personal Relationships: Utilize connections within the trade to find affordable labor.
- Start Small: Begin with minor renovations and gradually take on more extensive projects as confidence and skills grow.
- Flexibility in Strategy: Not every property requires a full-scale renovation; sometimes, modest upgrades suffice to attract tenants and generate income.
Notable Quote:
"Learn, you know, even just one skill... it could save you a lot of money and, you know, get a couple buddies to help you on the weekend." - Garrett Dion (46:03)
7. Future Plans
Garrett outlines his strategy for scaling his real estate portfolio:
- Acquisition Goals: Aiming to purchase a new property annually with minimal down payments.
- Financial Strategy: Saving capital diligently, targeting properties priced between $450,000 and $550,000 to maintain manageable down payments.
- Renovation Approach: Balancing between DIY efforts and hiring affordable labor to maintain efficiency and reduce personal burnout.
Notable Quote:
"This is the second one. This past year I did the same thing... Now we're here and then once this year is up, hopefully we'll be in a good spot to get the next deal." - Garrett Dion (37:54)
8. Key Takeaways
- DIY Renovations Enhance ROI: Handling renovations personally can lead to significant savings and higher returns on investment.
- Navigating Labor Shortages: Building a network of reliable, cost-effective laborers is essential in the current market.
- Strategic Property Selection: Choosing properties that require manageable renovations ensures sustainability and reduces financial strain.
- Continuous Learning: Developing a diverse skill set in property management and renovations empowers investors to adapt and thrive, even in challenging economic climates.
Notable Quotes with Timestamps
- David Greene (00:00): “This is the show where we pull back the curtain and show it to you, too.”
- Garrett Dion (03:13): “I hopped on it, paid 450,000, which was asking price... we needed somewhere to live.”
- David Greene (07:46): “This is like a good looking person with horrible pictures that you actually have a shot at getting.”
- Garrett Dion (34:42): “It was a lot of work. So I think the next one we would like to be a little more turnkey.”
- David Greene (36:44): “You went from renting to owning and paying half as much.”
- Garrett Dion (43:41): “This really wasn't, you know, there wasn't many hiccups with this... didn’t surpass the budget that I had for myself.”
Conclusion
Episode 25 of The David Greene Show offers a comprehensive analysis of Garrett Dion's house hack deal, highlighting the benefits of DIY renovations, strategic financial planning, and adaptability in the face of a challenging labor market. Listeners gain actionable insights into building and scaling a real estate portfolio effectively, underscoring the importance of hands-on involvement and continuous skill development in achieving long-term investment success.
For more detailed discussions and future episodes, visit davidgreen24.com.
