First BRRRR questions (Major renovation, Asbestos, Financing)

[Travis Bretches]

Good morning everyone,

I’m evaluating a private family sale on a 1950s home in the Denver metro area as my first value-add project. The property has strong fundamentals (roof, HVAC, and water heater are in good shape) but it hasn’t been cosmetically updated since original build.

The plan would be a full renovation: kitchen, both baths, flooring, fixtures, and potentially some layout modification to bring it in line with nearby renovated comps.

I'm hoping to acquire with a VA loan (assuming appraisal and any lead-based paint concerns clear) and budget approximately $150k for renovation (plus contingency). After stabilization, I plan to refinance and house hack by renting bedrooms while I live in the property.

Target purchase price is $250–350k and ARV would be in the 550-650k range based on my initial evaluation of comps. My goal would be to owner occupy / house hack for 1-3 years and then transition the property to a rental (preferably long term).

I’d appreciate insight on a few points:

1. Asbestos & Layout Changes
Given the age, I’m assuming there is a high likelihood of asbestos (flooring, mastic, insulation, etc.). For those who’ve renovated similar vintage homes, how did asbestos impact your decision to modify floor plans? Did remediation materially change your budget or timeline?

2. Renovation Financing Structure
For value-add projects of this scale, do you prefer a single renovation loan with draws, or layering financing as work progresses? What has been most efficient from a cost-of-capital and timeline perspective?

3. Contractor Management
This would be my first major renovation. What are your best practices for:
– Structuring payment schedules
– Avoiding scope creep
– Vetting GCs vs hiring subs directly
– Keeping projects on schedule

4. Bedroom Configuration Strategy
Currently the home has 3 small bedrooms and no true primary suite. I’m considering:
– Combining two bedrooms to create a true primary suite (attached bath + closet)
– Adding egress windows to two basement rooms to bring total count to 4/2

Alternatively, I could keep the existing layout and maximize total bedroom count (potentially 5 smaller bedrooms).

For those who've invested in similar Denver-area properties, have you seen stronger ROI from maximizing bedroom count for rent-by-room strategy, or from creating a true primary suite to appeal to resale buyers?

I’m still refining comps and numbers, so I welcome any pushback on assumptions. Thanks in advance for your time.

[G. Brian Davis]

Hi @Travis Bretches. Asbestos can definitely add cost and delay, so build in a real contingency and avoid opening up more than you need. For financing and execution a clean structure with a solid GC you trust will save you more headaches than trying to piece things together. On layout, think about your exit. Rent by room can boost cash flow short term, but a functional layout that matches what buyers want will protect your resale and refinance. Overall, the deal looks promising on paper, just make sure your ARV and rehab numbers are conservative.