How a Michigan couple makes thousands every month investing in real estate

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

He lived there and managed the property while he was a student, renting rooms to seven other Cornerstone students to pay his tuition. It was also in this house that he met his wife, Sarah McCauley.

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

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

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

These real estate companies are not their only sources of income. The McCauleys also restore and sell furniture and home accessories, bringing in about $3,500 a month. And they document their homeland Flipping and renovating adventures on YouTube, where her 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 multiple creative ways to make money.

Jamie and Sarah McCauley

By 2021, they were also balancing a fourth: Their now-defunct wedding photography business was making $150,000 a year at its peak, says Jamie.

But the real estate business is particularly important to them 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 are referring to flexibility in time as well as financial power.

Both don’t work like 9am to 5pm: Jamie works about 30 hours a week and Sarah works another 10, so they have more time with her two daughters.

Of their diverse income streams, real estate investing offers 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, generating an average monthly profit of $6,124.

Becoming a landlord was not her 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 for their then fledgling photography business, fueled by Sarah’s degree in visual communications and Jamie’s technical skills.

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

The couple are doing all of their renovations themselves, except for anything that requires a permit, says Jamie.

Jamie and Sarah McCauley

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

They have also since bought and flipped two houses that they have not lived in. The more successful one cost about $210,000, including the renovations — but the couple managed to sell it for $292,000 in 2020, Jamie says.

High costs, high rewards

After realizing they had a knack for flipping apartments, the couple began venturing into real estate during 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, stove, and drywall because of severe water damage.

They did almost all of the work themselves in six months. Jamie estimates that he spent between 40 and 60 hours a week to get the duplex up and running. According to Jamie, the renovations cost about $43,000, more than the duplex’s purchase price.

“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 makes $2,200 a month from their renters, Jamie estimates.

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

They invested money renovating 10 rental homes in Muskegon, Michigan, about 40 miles north of Grand Rapids – but the area proved a tough market and Jamie says it’s difficult to manage the properties remotely.

They quickly sold the properties and managed to rake in a short-term profit of $30,000, less than what they had hoped for with the rents over time.

In 2015, the couple hired a property management company to do the day-to-day maintenance of their units for 10% of the rental income. Jamie and Sarah spend another 40% of that income on services like garbage collection, floor maintenance and pest control.

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

Three companies juggle

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

After about a year, they hit 1,000 subscribers and 4,000 hours of watch time, making them eligible for Google AdSense — Google’s feature that allows creators to monetize their YouTube videos with advertising.

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

“Our wedding [photography] Business has powered our rental business, and our rental income has powered our YouTube business,” says Sarah.

The McCauleys say the YouTube business has been their toughest endeavor yet: They treated it as a full-time job for a year without making a dime, adding 40 hours a week to their collective workload.

But the effort was worth it, they say: the third source of income allowed them to close their photography business and spend more time with their families.

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

Would you like to earn more and work less? to register for free CNBC Make It: Virtual Event Your Money on December 13th at 12pm ET to learn from money masters how to increase your earning power.

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