Episode 77: The Renovation Lesson I Learned After My First Rentals

Most real estate investors focus on the numbers first — purchase price, rehab cost, rent, and cash flow.

But with my newest property, I’m realizing something different. The design decisions you make can actually determine the type of tenant you attract.

In this episode of The Ricky Ricardo Show, I walk through the renovation strategy for a property I currently have under contract and why this project is completely different from the first rental properties I bought.

My early rentals were turnkey investments where I had almost no say in the renovations. My flip project later taught me some tough lessons about contractors, construction quality, and what can happen when you’re not fully involved in the process.

Now with this deal, the goal is to turn the property into a mid-term rental for contractors, traveling professionals, and corporate tenants. That means the renovation strategy needs to focus on comfort, design, and the overall experience of living in the home.

I also share a personal challenge I’m working on — running 40 miles before my 40th birthday — and how that same mindset applies to real estate investing.

One project at a time.

🎥 Watch the full video episode on YouTube:
 youtube.com/@therickyricardoshow

📲 Instagram:
 @rickyricardoshow

About the show:
The Ricky Ricardo Show documents the real journey of building financial freedom through leverage, better decision-making, and real-world lessons — in real time.
Real estate is the current vehicle, but the principles apply far beyond it.

Transcript

SPEAKER_00 0:00

Most real estate investors look at a property and immediately start thinking about numbers purchase price, rehab cost, rent, cash flow. But something I'm realizing with this project is that the design decisions you make actually determine the type of tenant you attract. This week I want to walk you guys through this property that I'm under contract on and why the renovation strategy for this one is completely different from the first rentals I bought. This is the Ricky Ricardo Show. I am your host, Ricky Ricardo, and I'm just documenting my journey from beginner investor to hopefully financial freedom through real estate, the wins, the mistakes, the numbers, and everything in between and everything that's been going on. So a couple years ago, I bought my first property and I didn't do any designing to it. I had no say in what the property was going to look like. I trusted the team, the boots on the ground then, and I just wanted to get a property and didn't allow anything, any feedback of what I had to say or I didn't know what to say. Let's be completely honest. I did I didn't know what to share with them. Again, it was a turnkey property, but they had gotten inside and taken a look and basically said we didn't need to do anything. Then I got my second property, and same thing. It was renovations and rehab that needed to be done. All they did was tell me what needed to be done, how they were going to do it, and what was going to be the cost of it all. I also did not have a say in what that was going to look like. You know, they used the normal gray paint, the normal wood floor. Who knows what kind of flooring they use in terms of laminate, vinyl, tile. I have no idea. I was given pictures and cool. It was done. I wasn't completely excited about how the look came out, but they told me not to compare it to homes here in California because there is a different way of life in certain areas. It's a rental and tenants will be attracted to it because it'll be clean. And so I leaned in and agreed with it, and I got my first couple of properties with no say. I don't know how I feel about that. Actually, I don't like that. Um, because you can tell me that you're gonna spend $20,000, $30,000, and you know, kind of something similar happened with my flip. I had a little bit of say or they asked, um, but I gave them a lot of freedoms. I I gave them the option to do whatever they wanted, but look what happened. I actually went to the the flip in person and I kind of freaked out. I was like, whoa, what happened here? The pitchers say a lot of other things, but there in person, I was like, yeah, I would have never gone this route. I can only imagine if I went to my Indiana properties, it would probably probably be something similar. But you have to understand the strategy and what it is you're actually trying to get in terms of how you're gonna be frustrated or not, or what you're accepting in those scenarios. So, like I did with the flip, I knew I was trying to get top dollar, and I wasn't able to because of the renovation wasn't top dollar quality. But it's changing now. Like I told you guys before, I want to be involved. I want to make decisions, I want to trust the boots on the ground based off of other photos and other homes they have themselves or they've partaken in to actually make it look modern and up to date because this is a midterm rental. That's that's my first crack at this, is I want this to be a midterm rental. If the flip numbers work out, I'm not scared to say I will flip this thing. For some reason, if we get to the end of this and the price skyrockets and we're able to get a lot higher dollar per square foot, and the contracts aren't as great in terms of what I can get on the flip in instant money, you know, I'll let it go. I have no emotional tie to this. Yeah, I'd love to do a midterm rental, but for some reason, if it doesn't work out and a flip makes sense, then we'll be talking about how I did my first flip of 2026 and we'll go from there. But like I said, the the main part of this is to run it as a midterm rental, as a corporate rental, because I'm going to be having contractors in there. I'm going to have you know potential military families in there, nurses, or whoever. It's a corporate rental. So I want this place to look good. I want it to be modern. It's a very popular strategy these days. So I need to make sure that my home shows well and is comfortable and inviting. Just like when I or you, you know, stay in the Airbnb, for example, you want it to be really nice. If it's not, you're not going back. And a great example of that is when I went to New York in uh December, and then I had to go back to New York just recently that I shared with you guys. I actually stayed in the same place because it looked good, it was comfortable, and it was inviting me to come back. And so that's the kind of feeling I want my tenants that are gonna stay in the property to, you know, feel. And so I I want it to look really good. In the home, it's older, it's it's uh it's an older part of town, it's a very historic town in Alabama, and so there's wood paneling. I've shared all this on Instagram and I will continue to share, but it had wood ceilings. We pulled down the drop ceilings and identified wood ceilings, which was scary and cool. It only became cool because we were told it was actually in good condition and it could be refinished, sanded down, and made to look really good. So I'm actually excited. And we played with some AI, looked at some photos of what the potential could be with the rooms and those ceilings, and yeah, it's gonna look good. I think it's gonna look good. There's gonna be a southern charm to it in a modern feeling, and we're gonna update the kitchen. It looks really old. It's just, I mean, it looks like an appliance store. Looks like you're walking through Home Depot or Best Buy and there's just appliances thrown around. And, you know, we gotta remove the island right in the middle. We gotta change some cabinets, do some things, and basically just take down the wood paneling and put up some drywall, freshen up the space. Hopefully, everyone gets excited at what it's gonna look like. I'm excited based off of the photos and the end post-renovation goal that we are thinking we can turn this into. And so I kind of shared a couple photos on Instagram, and I will continue, like I said, to share those as we play with the renovations and actually as it goes through. But it's a dated home. It's got good bones, great bones, but it needs a modern update. We want to make sure you put, or I should say we put good things in there, fixtures and all that. We want to do a good job because I need this to appraise at a very high number if I want to bird this thing and get most of my money back. So I know I say bird, but that's basically renovate the home to get me to do a cash out refinance to take out majority of my money, or if not all of it, but at least the majority of it, so I can put back into my pockets and then use that money to invest in other properties, assuming it doesn't, you know, affect the terms of the loan to where I'm negative cash flow, or it really affects the amount of monies I'm getting each month. The numbers are pretty crazy. I've shared with you guys. So we'll we'll get there. Don't need to keep playing with the numbers because it's not uh factual, but midterm rentals, you're looking at, I mean, in comparison to my Indiana property, one month could be enough to cover a whole year of my Indiana rental. So it's there, it's possible. Uh doesn't mean it's always gonna happen. I mean, I'm sure there's gonna be months where there's vacancies, and so you got to play with all those numbers. But I'm excited to hopefully have kind of a cash cow. I'd love for it to be. And if it is, you know, I'll share with you guys the exact numbers, exactly what I'm getting each month from it as we get there. But like I said, rather than just playing with the numbers, I know that the homes right next to me make pretty good money. And so I'm excited. But until my property actually makes that money, it's hard for me to tell you guys hard numbers to go off of. So yeah, so all that to say is I want the wood paneling gone, right? I want the floors to be updated. I, you know, we're arguing back and forth, the team, about keeping the wood trim. So we'll put in the drywall and all that and actually see how it looks. But it might be kind of nice if, if especially if we have the wood ceilings, it could be a nice touch. Again, it's dated, so we don't want to completely remove the historic look of it, but we do want to modernize it quite a bit. And if you just look up modern southern homes or modern country homes, they look pretty cool. Uh, we're gonna do drywall replacement around the whole house, and we're gonna make those ceilings really nice. There's a room that's not considered a room because there's no closet, but it's full of wood, looks super dated, like some cabin. We're gonna take out all of that and you know, make it a nice office for the midterm rental. We're going to try and update the sunroom. We're just gonna try and do a rehaul of everything and make it make it look cool. You have to know your clientele. You have to know who your tenants are gonna be. You're not just renting a space, right? You're not just renting an Airbnb for the night. A midterm rental, you're you're trying to get someone to come in that needs a place to stay for more than 30 days. So they're gonna stay a month, they're gonna stay two months, three months, six months, twenty months. I mean, it's just a longer stay. It's not a long-term tenant. It's usually someone that's you know getting their uh monthly covered by their company, and they want to be able to put their employees into a home or their families and make them feel at home right away. So it's gonna be fully furnished. I want to make sure the beds, the furniture, the everything that's in there, you know, helps someone feel really at home. And I'm excited. I'll share those photos with you as soon as I get them. Renovations are underway. Like I said, I shared a few photos. If you're not following me on Instagram, please do. It's at Ricky Ricardo Show. If you're gonna be a new follower or you are a new follower, send me a DM. Send send a message, say hi. There's actually a link in the description of these episodes. You can send me a text. If for some reason you have an idea, some reason you want to talk about some feedback or whatever on this specific episode or future episodes or past, if you're not caught up completely, click that link, it'll send a text to my phone and we can communicate that way. It's a pretty cool feature. I also want to tell you guys, I'm doing a challenge as well. So as part of I always talk about real estate, right? But life is life. I'm trying to run 40 miles. Like, where is he going? Where is he going with this? So I'm trying to run 40 miles before my 40th birthday. So just want to touch on that real quick. I'm also, you know, starting to work out with the kid. We're trying to get involved with that, but why not choose a goal to a small goal to actually challenge myself to try and get so 40 miles before my birthday, I think when I started it, I had 50 days. So I did give myself a little bit of room because I am busy trying to squeeze in, you know, running a mile a day or multiple miles to get caught up. I don't know how that's gonna happen, but I have to find a way. And it's kind of cool because I'm realizing it's the same thing that can apply to real estate, same thing that can apply here. I can't just wake up and run 40 miles. You can't just wake up and run 40 miles. You have to do it mile by mile. Tying that into these investments into real estate, it's a long game. Again, still, I'm trying to make it as short as possible. I want to run as fast as I can, but in the end of the day, it is a long game. I'm trying to make this long game into a shorter game. I keep sharing that with you guys, but even with that, it's not a get-rich scheme. It's not a get-rich next day or same day. That's not the case. Could it happen? Maybe if you got the the best deal, I don't I don't know how, you know, because some of these multi-million dollar homes and agents are getting commissions, for example, and and it's not life-changing money to where they can quit and do anything like that. But one project at a time, that's it. I just wanted to tie that in there somehow. But the lesson I'm learning here from my first properties is have a say in what your property is gonna look like. Don't just let somebody else tell you everything that they're gonna do, and then you just give a thumbs up. Get involved because you have to think in a way that this tenant experience is actually gonna matter. Yeah, you can use your expertise, and if you don't trust their expertise, you know, maybe pay for a design, right? There's all kinds of online designers. You can use AI if you wanted to and have ways, but get involved. My first properties, like I said, if I stepped foot in them, I would not be excited. Uh, but one of the things I've realized during this journey is that every property teaches you something different. Every single property that I've had has helped me up to this point. First rentals taught me how to get started. That's it. The flip taught me a lot of lessons about construction and contractors, trust, design, monies, and how to react and respond to a lot of things if things go bad. This project is teaching me something new to turn a property into a place people actually want to live in. That's the goal of this one. That's what I'm wanting to do, and that's the lessons I'm trying to get out of this. I appreciate you guys tuning into the show. This is a real documented, real-time, real life journey that I'm experiencing and I'm sharing with you guys to let you guys know this is real and there's no fluff, there's none of that. So if you haven't already, please leave a review. Five stars if you can. Send me a text, like I said, and in there's a link in the description, and follow me on Instagram at Ricky Ricardo Show. I'm planning on doing some interviews here soon, probably with operators in midterm rentals, because I I want to learn more about that. And I'm sure you guys want to hear more examples regarding monies and how it all works out. So I'll be working on that for you guys. Other than that, enjoy your Monday. Have a great rest of rest of your week, and I'll talk to you on the next episode. Thanks. Bye bye.