If you are not already, I urge all my real estate peers to consider becoming a property investor. I started investing in real estate when I was 18 years old. I took my graduation party money and invested in my first duplex. For the last 20 years, real estate investing has been a lucrative and rewarding endeavor for me and my family.
And, with commercial assets under intense scrutiny these days, we’ve discovered an interesting way to take an existing structure, adapt it for a new use to maximize profits all while playing our part in helping the current, low income, housing crisis in our areas.
It’s this adaptive-use strategy that we have implemented over the last decade, converting motels to multifamily properties, and helping our nation’s veterans and low-income families find affordable housing. Many investors are focused on motels or residential properties as individual assets, but we don’t look at them with the same lens.
Converting roadside motels into community housing
We own and manage over 120 units in Michigan. With vacation rental sites like AirBnB and VRBO, motels are fighting for market share. We’ve been able to scoop up smaller, roadside motels that haven’t reached the same demand they had in their heyday. These rooms are easily converted into small efficiency apartments and are the perfect size for people transitioning in life or getting back on their feet.
As owners, we always update our properties and are known by the local community and government organizations as people who care for their tenants and reinvest in their properties.
Take the 20-unit roadside Joy Motel, for example. The first thing we did was change its name because it did not reflect our hard-earned reputation and future goals with the property. Then, we put in new siding, windows, landscaping and central air.
Over the years, we have built solid relationships with the staff at the Veterans Administration (VA) as well as other organizations like the Center for the Aging and Center for Housing for Seniors in our local area. We welcome all organizations to send their people to visit our properties to see how we can rent units to those in need of housing.
In addition to veterans and seniors, we also have a good percentage of our tenants who are getting a divorce and looking for a fresh start in life. Some people need a short-term place to stay. They know they need a room, but they don’t want to pay the fees associated with a nightly rate at a hotel or commit to a long-term lease.
It takes systems
We have systems in place to protect our clients and the properties, and it’s the primary reason we don’t always call them tenants. People who stay at our properties sign an extended stay motel agreement and typically pay on a week-to-week basis. Because of this, we don’t have to go through the typical eviction process. It is a gray area, but if they stayed on site for months (and depending on your state), Michigan does technically consider them a tenant.
We have a support team that includes a property manager, accountant and my partner (husband) who leads the maintenance team.
We go above and beyond for our clients. One gentleman, a veteran, ended up getting severely behind in rent because he lost his job due to COVID-19. Using our connections with the VA, and helping him manage the process and jump through the hoops, we got him the support he needed – and deserved. In fact, I’m happy to report that he is working again as a greeter at the local grocery store.
As a tech startup founder and app creator, I’m always looking for that next big thing. As a real estate investor, and niche adaptive reuse entrepreneur, it’s an area I’d recommend investors to consider not just for the income but also for the impact they will have on people’s lives, including veteran and low-income families.
Kim Gamez is with CENTURY 21 Affiliated & President of Gamez Properties LLC.