MARKET & TRENDS
TRANSITIONING
Flipping Rentals
WHEN TRANSITION BECOMES A TIMELESS INVESTING STRATEGY
by Michael Zuber
O ne commonway to invest in real estate is through owning rental properties that can accumu- late in monthly cashflow. That was my goal when I started my “One Rental at a Time” journey 15 years ago. Back then, I had no oppor- tunity to expand my horizons and see how I could make a larger positive impact. I was a full-time employee who worked 60+ hours a week, travelled all over the world nearly every week and was raising our daughter. This insane schedule meant I had to focus on learning my market, managing my property manager, and finding the next rental unit to add to our portfolio. Thankfully after building a rental portfolio over a decade and a half, we have earned the freedom to grow our positive impact and see how we can help more and more families see the power of rental properties. My focus niche was rental properties and I never got into the fix-and-flip sector. However, I have found a way to take my market knowledge, extended team, and financial strength to turn slumlord properties into pride-of-owner- ship rentals. If you are wanting to dive into a different REI niche, explore an industry trend, or expand your horizons by simply pivoting within your focus, you can do that in the world of real estate! Here’s how I pivoted from rental property owner to flipper all while staying within my wheelhouse. First, buy the most disgusting, run-down properties that need significant love and attention, and purchase them with cash. Then, invest $30,000-$80,000 to trans- form the worst house on the block into a great rental property. Change everything from floor to roof — includ- ing windows, kitchen, bath, and more.
After fully remodeling the property in 8-10 weeks, fill the property with a quality tenant and then look to sell the remodeled property that is now occupied. Having successfully converted 40+ slumlord properties into pride-of-ownership rentals, I can tell you the effort is worth it. This twist on flipping properties is exciting and very different in my market as lots of people flip properties to owner occupants but few are flipping to landlords. The ability to flip to landlords means you can help turn neigh- borhoods around and recycle capital. For my first 15 years in real estate investing, I would never sell a rental property because I was so focused on building a portfolio that would meet our monthly needs. Now that I can flip a property or two a month, I can con- tinue to recycle our capital and help busy professionals get started on their own journey of building cashflow rental properties. Real estate investing started with learning our mar- ket, building a team, and finding deals. This focus has allowed us to go from buying cashflow rentals to flipping pride-of-ownership rentals. This transition was unexpect- ed and not planed, but it shows the power and flexibility you can achieve with real estate investing.
Michael Zuber worked in the Silicon Valley since graduating from Santa Clara University 20+ years ago. After wasting time and money in his 20s, he began investing buy and hold rental properties and never looked back. Michael grew his rental property portfolio from a single rental house to financial freedom in 15 years. Now that he no longer has a day job, he shares his story via his self-published book and YouTube Channel, both called One Rental at a Time.
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