First BRRRR questions (Major renovation, Asbestos, Financing)

Denver, Colorado
BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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First BRRRR questions (Major renovation, Asbestos, Financing)

Travis Bretches
Member since 2021 · 4 posts · 4 votes

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.

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G. Brian DavisPro Member
Investor · Hatboro, PA · Member since 2016 · 3k+ posts · 886 votes
7mo

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.

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  • Spencer Hunt
    Member since 2026 · 17 posts · 5 votes
    7mo

    There are a few spots to be careful about. With a home that old, you should assume that there is asbestos in materials of the house. If you're planning on doing changes to the layout, that will likely increase your costs and timeline for the project so you may want a stronger contingency.

    Many buyers value a primary suit along with a functional floor plan. Adding more bedrooms could help with rental income but it won't necessarily mean you can resale at a higher amount. A good middle of the road approach could be making a primary suit and adding a bedroom or two in the basement to give yourself some flexibility.

    For financing and construction, keep things simple. Make sure the contractor agreement is detailed, ties payment to the progress of construction, and avoid making decisions on the spur of the moment. Make sure as well that the property will meet the VA loan requirements first, because if the renovations are major enough, they might make issues with the loan.

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  • G. Brian DavisPro Member
    Investor · Hatboro, PA · Member since 2016 · 3k+ posts · 886 votes
    7mo

    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.

    1Reply
  • Akua Sarpong
    Developer · Philadelphia · Member since 2026 · 4 posts · 6 votes
    7mo

    This is a solid setup for a first value add. Good bones on a 1950s home with cosmetic only work is the dream scenario honestly.

    Few thoughts from someone who's done multifamily rehabs:

    Asbestos - yeah assume it's there. Flooring and mastic especially. Get testing done before you commit to layout changes. Encapsulation is way cheaper than full abatement so if you can work around it (new flooring over old tile, leave walls intact where possible) do that. Full abatement can easily add 10-15K and a few weeks.

    Financing - at 150K rehab look into a renovation loan with draws vs paying out of pocket. Draws keep you disciplined because the lender sends an inspector before releasing funds, which is honestly helpful on a first project. Just have cash reserves for gaps between draws.

    Contractors - this is where first timers get burned

    1. Never pay more than 30% upfront. Structure payments around milestones not timelines. contractors are never on time

    2. Get a detailed scope of work BEFORE signing anything. Vague SOWs = scope creep = budget blown

    3. Track every single cost from day one. I was almost 20K over on my first project from stuff I wasn't tracking properly

    GC for your first one. Managing subs yourself sounds cheaper but the coordination will eat you alive

      Bedrooms - for house hack / rent by room, maximize bedroom count. Primary suite is a resale play and you're holding 1-3 years minimum. More bedrooms = more rent. The basement egress idea is smart, just check Denver code on ceiling height and window sizing requirements.

      Your numbers look reasonable though. Good luck 

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    • Tommy Reeves
      Investor · Baltimore, MD · Member since 2026 · 10 posts · 11 votes
      6mo

      Done 10 rehabs on old row houses in Baltimore, 1900s-1920s construction. Your 1950s place is newer than anything I've worked on but the surprises are the same once you start opening walls. Asbestos is one piece but you're also going to find outdated electrical, galvanized plumbing, and previous owners' DIY patches that make no sense. Budget the contingency and then add more to it.

      For the financing, get a loan with draws. I've used hard money with draw schedules on every project and the best part isn't even the capital, it's the accountability. Your lender sends an inspector before each draw release so your GC has to actually finish the milestone before they get paid. That's better protection against scope creep than any contract language you'll ever write.

      GC management is the whole game on a 150K rehab. My GC Andre has been with me since project #2, found him when I was still working as an electrician on job sites. Best GCs come from referrals from people who've actually used them on similar scope, not from Google. Pay structure I do is 10% deposit then draws tied to milestones, never ahead of the work. Fixed price contract, not time and materials. On a rehab this size the gap between a good GC and a bad one is 30-40K easy.

      And on the bedroom layout, keep all three and skip the primary suite conversion. More bedrooms means more rent and better resale. Put that money into kitchen and baths, that's where the appraisal value comes from.

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