How Co-Living Nearly Quadrupled His Rental Income | Steven Borawski’s Real Estate Investing Strategy

Steven Borawski:

Sober living’s like that. I was like, “I’ll give it a try.” And we went from 650 for the whole building to 600 for those four bedrooms, basically quadrupling what the property was bringing in. And it was like—the craziest thing too, Scott, was I got 30 applications for those rooms. There were so many people that were like, “I need a decent, clean place to stay so I can work my job, I can get my feet through the door, save money.” So we’re looking to do it again.

Scott Bursey:

Welcome back to the Real Estate Pros Podcast, powered by Investor Fuel. I’m your host, Scott Bursey. Glad you’re with us. Today we’re pleased to be joined by Steven Borawski, a Northwest Ohio landlord with over 15 years in the game. Steven buys and manages small rentals, does much of the rehab work himself, and has built it all the while holding down a full-time job and raising a family. Through his site, 9to5landlord.com, he shares the honest numbers and the real day-to-day stories behind those rentals. And he also runs Northwest Ohio Landlords, a growing Facebook group of local landlords learning from each other. Listeners, get ready for a working landlord’s playbook: buying right, doing the work, and why his next chapter is co-living. Steven, welcome to the show.

Steven Borawski:

Thanks so much for having me, Scott. This is a great opportunity. Thank you.

Scott Bursey:

It’s awesome having you here. And to help our listeners get up to speed, please give us the ninety-second highlight reel, if you will, of how your career ignited and where you’re pouring your fuel now.

Steven Borawski:

So it started slow. We bought a house right after that whole financial crisis, and I had to move for work and we weren’t gonna be able to make our money back when we sold it. So I talked to my wife and I’m like, “Look, I read all these books on renting this place out. Can we rent it out?” And she’s like, “Okay, give it a try.” And from there we found a great tenant; she’s actually still with us over a decade later. From there, just one at a time here and there: bought a house, fixed it up, got it rented out, and just kept going.

Scott Bursey:

Thank you for going through that awesome highlight reel, Steven. You know what really caught my attention about you, Steven, was the name Nine to Five Landlord, because you never treated the day job like the enemy. So many people in this business talk about escaping the job as fast as they can, and you kept yours for over fifteen years and are currently working the nine-to-five, built your portfolio right alongside that. And I want to dig into how that job actually worked for you instead of against you. Taking that a step further: 15 years in, what’s the strength that’s carried your portfolio the furthest?

Steven Borawski:

So the biggest part, and probably most people know the most important thing about the nine-to-five, is it’s the paycheck, right? That’s why we do it. And if you’re good with your money, you save your ducats, put some extra aside, the idea is you can build up a nest egg so you can get those down payments, can purchase those properties in there. So the nice thing is, if something goes wrong in the portfolio, you still got your job, right? You’re still working. It is nice, eventually, to hopefully escape the nine-to-five. But the idea is that’s where most of my money came from for a very long time. And then over time, over those 15 years, actually the portfolio’s built up so much it actually makes more than my nine-to-five. And the nice part is that I can keep doing it, I can keep doing both, but eventually, if I get to that point, I can go, “Well, I’d really like to sleep in on Mondays.”

Scott Bursey:

Thanks for putting that on the table.

Steven Borawski:

Yeah.

Scott Bursey:

And talk to us, Steven, if you will: where does doing the rehab work yourself stop paying off?

Steven Borawski:

Actually, I’m right at that point, Scott, for you—good question there. For the first couple, it was nights and weekends. Honestly, I had more time than I had money, so I would buy these really rough houses for as cheap as I can possibly get them. And I grew up in a blue-collar factory family, and my dad would be like, “This is how you change out a light switch, son. This is how you fix the plumbing.” So just those skills growing up. But I built that portfolio to such a point where I’ve now, actually in the last year, had to hire a part-time handyman, because my kids are really active in sports and music. So it’s like: do I really want to miss that game on Friday night so I can rip out a bathroom?

But on the other hand, which is really nice now that they’re older, they love to swing a sledgehammer. I put on the mask, get them all protected so mom doesn’t freak out, but they love ripping out a bathroom with me. So we still do a lot of hands-on stuff. I think right at about fifteen, maybe a dozen properties, it’s to that point where it’s like, well, getting to be a little too much to do on my own.

Scott Bursey:

How do you decide what you’ll still pick up a hammer for?

Steven Borawski:

I still do a lot of the big-ticket items. So I think I’ve done probably about nine or ten bathrooms. Those are always the really expensive ones—they quote for 15 or 17,000, and I’m like, “I bet I can do that myself,” and I can. A lot of stuff I actually let go is painting. I hate paint and drywall; I am not that meticulous. But I like to do the higher-end things where I really can get the extra bang for my buck when I do that work. That and the demo—I love the demo. So getting to rip everything out and see it all clean and ready to start over.

Scott Bursey:

Thank you for breaking down your formula for us, Steven. And walk us through this one: why co-living, and why now for a landlord with your portfolio?

Steven Borawski:

So it all started: I was able to find a great deal, got owner financed, and it was this kind of commercial property. It was really designed out to be almost like a co-living, but the original idea was to look at sober living, because my wife is an addictions counselor. She decided to go for a master’s, and she couldn’t work full-time because she has a full-time job and helped me build out this sober living facility. So I’m like, “Okay, what do I do with this property?”

At the time it did have a tenant in there and they were paying around $650, and the rent hadn’t gone up in a really long time and all those things. So I worked with the tenant, let them know they need to move out. And I was like—I saw this thing on YouTube where they rent out the rooms and they make a lot of money. I’m like, “I wonder if I could, because sober living’s like that.” I was like, “I’ll give it a try.” And we went from 650 for the whole building to 600 for those four bedrooms, basically quadrupling what the property was bringing in. And it was like—the craziest thing too, Scott, was I got 30 applications for those rooms. There were so many people that were like, “I need a decent, clean place to stay so I can work my job, I can get my feet through the door, save money,” you know. So we’re looking to do it again.

Scott Bursey:

Wondering: what does a co-living conversion cost compared to a standard rental rehab?

Steven Borawski:

One of the big things is you have to think about: instead of one or two people using a bathroom or the kitchen, now you got four people using the bathroom and kitchen. So durability, durability, durability. When you’re looking at the fixtures, if you can get the commercial-grade stove, commercial-grade sinks, toilets, all that kind of good stuff. We use a lot of commercial carpeting, so the carpet squares go down—they’re two-by-two, they go down great. If there’s a problem, somebody ruins one, you pop it up, you slap another down.

So really being mindful of the quality of the finishes. You don’t have to do high-end, but you have to do durability, so that also means it costs more. So it’s not as cheap as just putting down some vinyl floor, because it gets scratched up and the hallways are getting used constantly, that kind of good stuff. You gotta almost maybe take the opportunity of looking at a hotel, right? Hotels are excellent examples of what you need to build out there, and those aren’t cheap.

Scott Bursey:

Thanks for sharing how that works. Talk to us about this: what’s the biggest risk facing small landlords in Northwest Ohio today?

Steven Borawski:

I think one of the biggest risks is the current economics in the community. We don’t have a giant player like an Intel or Google. We have factories, lots of factories; a lot of people working at Walmart and stuff like that. So understanding what’s coming in—we’ve been lucky enough to have a lot more interest in manufacturing in the area, but we’ve also had a couple big manufacturers go out.

So being aware of that, and to that end, knowing where your tenants work when you’re screening. Asking a question, you’re like, “He works at that factory. I just saw in the news, my gosh. Hey, maybe I reach out to him and say, ‘Hey, I heard…'” And then luckily he’s working somewhere else already. So a couple of those times have happened. So just being aware of where the community’s headed, where the economics, where the manufacturing is happening in your area.

Scott Bursey:

Let’s stay on that path for just a moment, Steven. How are you positioning your rentals to stay ahead of the curve? Are you looking to stay in that market or perhaps expand out of that market? What’s your strategy?

Steven Borawski:

So our kind of strategy moving forward is looking at more co-living. We’ve had a lot of just word of mouth. A lot of the individuals that live there, they’ll be like, “Hey, do you have anywhere else? I have a friend,” or, “I know this guy has co-living,” and I’ll just have people reach out to me. I’m like, “I don’t have anything available right now.”

So I think a lot of times we’ve focused on building big, nice houses. There’s a lot of people out here, especially in my area, who just need a comfortable place to live. And eventually we would like to do a little bit more scale, more commercial-size buildings. But right now it’s serving the community individuals that just need a comfortable, safe place to lay their head so they can work their job and save up their money.

Scott Bursey:

Would the next big move be buy-and-convert an existing house or build from the ground up?

Steven Borawski:

Right now we’re doing a buy-and-convert. In our area, we have these nice, big, huge houses that do have four and five bedrooms. They also have a lot of dining room areas and they’ll have living rooms and family rooms. Those have some potential to look at. The biggest issues that we always keep in mind is the number of bathrooms and the amount of parking—that is always key when we look at these houses. You cannot have one bathroom if you’re gonna have more; the least you need is two, three is fantastic. And you can’t really have that kind of traditional one driveway where everyone parks in, so you got to keep your eye open for the ones that either have on-street or side parking and make sure those bathrooms are at least two or three.

Scott Bursey:

Thank you for bringing us up to speed on that. Steven, what does your professional network look like right now? And when it comes to relationships and networking, what has made the biggest difference for you?

Steven Borawski:

Now I’m isolated compared to someone that lives in a big metropolitan area that actually has a pre-existing investor network, so I’m building my own. That starts with that Facebook group—just reaching out to people who list their properties on Facebook and saying, “Hey, I got this group over here. You wanna come? We could talk, we could share our ideas, we could say who’s the best plumber and don’t use that roofer, use this roofer,” that kind of good stuff. So that’s actually been really important, and I’ve actually made some good connections and some friends through there. We chat back and forth and commiserate, but also celebrate the wins. That’s an important part of the network.

Scott Bursey:

Thank you for giving us a peek inside your circle there. And that’s really fascinating, 9to5landlord.com. Steven, let’s dive deep. If a listener is working a full-time job, has some savings put aside, and wants to buy their first rental in the next 12 months, let’s say, what’s the first move that you would tell them to make?

Steven Borawski:

The first move I made was I rented out the house I already owned. So a lot of times you can look at—maybe you don’t want to move, but maybe you’re like, “Hey, if I can…” And this is what we did: we fixed up the house, made it nice. I had to move for work and decided to rent it. A lot of people look for a multifamily: “Can I live in one side and rent out the other side?” It’s almost like a cheat code to getting to be a landlord, those little steps.

And a lot of times in your community, even if it’s small like where I’m at, you can see other landlords, right? You know who has some rentals; maybe they post up some signs here or put it up for rent. And you could ask. That’s what I do: I reach out to landlords and I talk to them all the time. I’m like, “Hey, join my group. Hey, are you interested in an offer? I’d love to have that property.” You’d be surprised.

But making those connections early on, and also starting with the house you own, or maybe can you live there and rent out part of it? A kid’s friend, he didn’t go to college, he just got a factory job. He’s like, “I want to get in this real estate thing.” And he was thinking about buying a house. I was like, “Why don’t you just rent out the rooms?” He’s like, “What?” I’m like, “You only need one bedroom. If you get a three-bedroom house and you rent them for five hundred bucks, that’s a thousand bucks in your pocket every month.” And he’s like, “That’s almost my mortgage.” I’m like, “Yeah, buddy.”

So those small little steps—and trust me, over 15 years, if you do one step a year, that’s fifteen properties and you end up doing what I’m doing. So one at a time.

Scott Bursey:

Thank you for that context right there, Steven. And you really have given us some excellent insight on your local market, especially Northwest Ohio. But is there any additional words or a golden nugget or two that you’d like to leave with our listeners here today?

Steven Borawski:

I think an important part is having a plan, and just doing one or two things each week to move that plan forward. So when I started the landlords group, I’m like, “I’m gonna just start a landlord group. We’ll see what happens.” Well, nobody came. I was like, “Well, maybe next week I’ll invite a couple of people.” I saw them listing their property on Facebook; I’ll go, “Hey, why don’t you join?” And they did.

Same thing with buying a property. Every couple days I’ll check the MLS, I’ll check Zillow, I’ll check here, I’ll be like, “Wait a minute, that one looks good.” So just being consistent. It doesn’t have to be big, flashy stuff. You don’t have to buy a house in cash or buy a giant apartment building. You just make those connections, keep an eye on your market, look for deals. Maybe it takes months. I’m patient. That’s why I only buy one or two a year. I look for the premium of the crop when it comes to a good deal. I’m like, “I gotta buy that. That’s so good.”

So just take your time. Always make a move on it. Don’t get stuck just reading books; take those steps. That’s an important part.

Scott Bursey:

The power of fundamentals.

Steven Borawski:

Mm-hmm.

Scott Bursey:

Excellent. Steven, for those of our listeners that want to keep this conversation moving, stay in your lane, collaborate with you perhaps on future deals, what’s the best way for them to plug into your pipeline and reach you directly?

Steven Borawski:

Sure. I’m Steve at Great Homes Ohio—that’s my company. You can send me an email: steve@greathomesohio.com. If you’re in the Ohio area or you just were like, “I want to invest in this Ohio area,” Northwest Ohio Landlords group—we’re right there on Facebook. I’m constantly chatting about stuff, so ask to join, I’ll let you in and be like, “Hey, send me a message.” So love to connect.

Scott Bursey:

Steven, thank you so much for joining us today on the Real Estate Pros Podcast.

Steven Borawski:

Thanks so much for having me.

Scott Bursey:

It’s been a blast, my friend. And to our listeners, we appreciate you. If you received value from today’s episode, please subscribe. We’ll be filling your tanks with the lineup of elite guests, just like Steven Borawski, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.