How Three Real Estate Investors Turned Weird Properties Into Rental Spots

Extreme Landlording: How These Property Owners Turned "Weird" Spaces Into Real Estate Gold

By Jane Kelly

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Most small property investors wouldn’t see much promise in an old church or a rundown mansion, these landlords thought differently—and now they’re cashing in.

The ability to think creatively about a rental property—and visualize its full potential for income generation from the outset—is a skill every savvy investor must possess. But when the property is a bit of an oddball, this creative foresight is even more essential.

Rental property investors Bill Syrios, Johnny Youssef and Howard Petersen have honed this skill in their careers as small property owners. When others saw a headache or a bad investment, these three saw dollar signs.

Bill Syrios: The Frat House Flipper

Body_Images_1_Frat-House_Extreme-LandlordingSyrios has been an owner and manager of student housing since the 1990s—primarily around the University of Oregon. “Property management is more intensive with student housing,” he says. “For one, you're tied to the school-year schedule. So, a large percentage of our properties come empty every year at the same time.”

This hasn’t stopped Syrios, though. Over the years, the small property owner has converted carports and dining rooms into bedrooms at several of his properties. One of his most unusual conversion projects is a former fraternity house, built on the University of Oregon campus in the mid-1950s, that had been converted to apartments.

“The owner before me tried to divide it up, but had only created about 20 bedrooms and left a lot of unused space,” says Syrios. “I took the whole thing down to the studs and redesigned it so it has 31 bedrooms. It now has 11 apartments, mostly three-bedrooms, but also some larger and smaller units, including a studio apartment. This has allowed me to significantly increase rental income.”

Johnny Youssef: The Mansion Maven

Body_Images_2_Mansion_Extreme-LandlordingYoussef has been investing in real estate for less than a decade, but during that time has turned some properties no one else wanted into desirable gems. One such property is a former mansion in midtown Kansas City, Missouri, that was built in the 1920s. The area—and mansion—had seen better times, but the neighborhood is on the upswing, so Youssef took a chance.

Giving the mansion a new life wasn't easy, however. “In the 1950s, this 4,200-square-foot home had been turned into an eight-plex," Youssef explains. "At some point, neighbors started demanding that the property be turned back into a single-family dwelling. But other homes in the area are about 1,500 square feet with three bedrooms and two baths, so investors had a tough time making that work.”

When Youssef assumed ownership of the property in 2013, he focused on remodeling the inside and adding other touches to restore some of the mansion's early 20th century charm. And as he worked on converting the property back to a single-family dwelling, he kept an alternative plan in focus, too.

“The upstairs can be used as a separate living area,” says Youssef. “It has its own entrance and a kitchenette.”

Youssef says he initially intended to sell the mansion—and may still do so in the future—but for now is happy to earn $30,000 in annual rental income from a large family that wanted to live in the area.

Howard Petersen: The Church Converter

Body_Images_3_Church_Extreme_LandlordingWhen a former Catholic church in Oregon, Illinois, hit the market in 1992, Peterson and his wife Donna leapt at the chance to buy. The local investors wanted to convert the church into a unique apartment property.

However, Peterson says their bank was not as enthusiastic initially. “They would not lend us any funds until remodeling was completed,” he says. “So, we purchased the property on a six-month contract.”

For those looking to convert old churches to apartments, Peterson advises they first make sure there is a market for that type of rental property in the community. If there is, it can be a sound investment.

“Religious properties are usually built very well. If they are of stone or brick construction, the maintenance can be minimal. Plus, many of these properties offer quite a bit of square feet to work with, making remodeling worth the time,” he says.

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About the Author:
Jane Irene Kelly
Jane Irene Kelly, who has two decades of professional writing, editing and reporting experience, writes about business and technology. Her previous roles include San Francisco bureau chief for Adweek magazine. Jane is a graduate of Syracuse University’s S.I. Newhouse School of Public Communications and resides in Pennsylvania.