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How Michigan couple makes thousands a month from real estate investing

When Jamie McCauley was a junior at Cornerstone University, his parents bought him and helped renovate a foreclosed home near the Grand Rapids, Michigan campus.

He lived there and managed the property during college, renting out rooms to seven other Cornerstone students to help pay his tuition. He also met his wife, Sarah McCauley, in that house.

His stint as a fledgling landlord foreshadowed the couple’s now-lucrative real estate ventures: 12 years later, they’re bringing in up to $11,000 a month renting out 11 renovated units in five properties throughout West Michigan, according to documents reviewed by CNBC Make It .

Jamie (33) and Sarah (32) also flip houses for themselves to live in. So far, they’ve bought three distressed properties, renovated them, lived in them for a few years and sold them at a profit before starting the whole process. over again.

Their most recently renovated home sold for $436,000 in February, netting them a $149,260 profit, Jamie says.

Those real estate ventures are not their only income streams. The McCauleys also restore and sell furniture and home decor, bringing in about $3,500 a month doing so. And they document their home flipping and renovation adventures on YouTube, where their channel and other social media accounts brought in $102,000 in revenue last year.

The mission of Jamie and Sarah’s YouTube account is to show viewers that there are several creative ways to earn money.

Jamie and Sarah McCauley

Until 2021, they also balanced a fourth one: their now-shuttered wedding photography business brought in $150,000 a year at its peak, Jamie says.

But the property business is particularly important to them, both financially and symbolically, they say.

“Investing in real estate was so powerful and important,” says Sarah. “It just created this life of freedom for us.”

Gain experience

When the McCauleys talk about freedom, they’re referring to schedule flexibility as much as financial power.

Neither works a typical 9-to-5: Jamie works about 30 hours a week, and Sarah works an additional 10, so they can spend more time with their two daughters.

Of their multiple income streams, the real estate investments give them the most bang for their buck. With all 11 renovations fully completed—a process that took about six years, Jamie says—they now spend just two hours a month maintaining the properties, and average $6,124 in monthly profit from it.

Becoming landlords was not their original intention. After Jamie graduated in 2011, his parents sold the house near the university. And when the couple married in 2012, they needed a place to live and ran their then fledgling photography business, fueled by Sarah’s visual communications degree and Jamie’s technical skills.

They found a house in desperate need of repairs and paid $48,000 for it. Their plan was to renovate it, and live in it for at least two years to avoid capital gains tax. The property is now worth $286,800, according to Zillow.

The couple handles all the renovations themselves, except for anything that requires a permit, Jamie says.

Jamie and Sarah McCauley

“It’s called the live flip strategy,” says Jamie. “The biggest reason [we started flipping houses] is because we couldn’t afford anything else.”

Since then they have also bought and flipped two houses that they did not live in. The more successful one cost about $210,000, including the renovations — but the couple was able to sell it in 2020 for $292,000, Jamie says.

High costs, high rewards

Realizing that they had a knack for flipping housing, the couple began tackling properties during the winters, when Michigan weddings were sparse.

In 2016, they bought a duplex in Grand Rapids for about $37,000 — “almost nothing,” says Jamie. But the house needed a new roof, furnace and plaster due to severe water damage.

They did almost all the work themselves over six months. Jamie estimates he spent between 40-60 hours a week getting the duplex up and running. The renovations cost about $43,000, more than the duplex’s purchase price, according to Jamie.

“We treat renovations like a job,” says Sarah. “It was a big part of our time.”

Today, the property is worth about $200,000, and the couple earns $2,200 a month from its tenants, Jamie estimates.

The success of the photography business allowed the McCauleys some trial and error.

They sunk money into renovating 10 rental properties in Muskegon, Michigan, about 40 miles north of Grand Rapids — but the area was a tough market, and Jamie says it was difficult to manage the properties from afar.

They quickly sold the properties and managed to record $30,000 in short-term profit, less than they had hoped to earn from the rent over time.

In 2015, the couple hired a property management company to handle the day-to-day maintenance of their units for 10% of the rental earnings. Jamie and Sarah spend an additional 40% of those earnings on services such as garbage collection, grounds maintenance and pest control.

This helps them spend almost no time checking in on the rent themselves, says Jamie: “Now that property is paid for, and it’s just passive income.”

Juggling three businesses

In 2019, the McCauleys added an element to their business: They started filming their rental projects and posting the videos weekly on YouTube.

After about a year, they reached 1,000 subscribers and 4,000 hours of watch time, making them eligible for Google AdSense – the Google feature that allows creators to monetize their YouTube videos with ads.

After a video titled “We Paid Our Mortgage by Flipping Furniture” went viral, brands like Skillshare, Beyond Paint, and HelloFresh began reaching out with partnership opportunities.

“Our wedding [photography] business kind of drove our rental business, and our rental income drove our YouTube business,” says Sarah.

The McCauleys say the YouTube business was their hardest venture yet: They treated it as a full-time job for a year without earning a dime, adding 40 hours a week to their combined workload.

But it was worth it, they say: The third income stream allowed them to close their photography business and spend more time with their family.

“We weren’t really sure where home design or flipping or photography or YouTube would lead us,” says Sarah. “But we knew if we put ourselves out there, it would create more opportunities.”

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