In this YouTube presentation, Cheryl Kelmar (Speaker B) walks through a series of personal real‑estate projects that illustrate how creating rental‑capable units within existing homes can generate essential cash flow. She describes a two‑story house in Issaquah where a simple interior door, a washer/dryer in a hall closet, a modest kitchen, and a staircase to an upper deck turned the property into a profitable rental. She then explains her move to Santa Cruz County, motivated by family considerations, and how that relocation opened new opportunities for similar conversions. Throughout, she emphasizes that without the ability to rent out portions of a home, she would not have been able to sustain ownership over the years, underscoring the financial necessity of rental capability. The talk blends practical renovation details with personal narrative, offering both actionable guidance and contextual motivation for homeowners considering rental conversions.
He says, but we can't farm it into peace. I say, how to— I know nothing, nothing. I know nothing, nothing.
So the rental capability in Issaquah is another example of a 2-story house where all I have to do is put a door on between upstairs and down. Install a washer and dryer inside the hall closet, put in a kitchen, a little kitchenette, bar-size kitchen downstairs, and then put stairs on the upper deck. And I have a great little rental. And, you know, just again, without rental capability, I couldn't have owned all these years. So then this— it looks like I've moved around a lot, and I didn't intend that, but I came down to Santa Cruz County, and I landed in Santa Cruz County because I thought it's between Santa Barbara and Santa Cruz, because my son's father lives in Woodland Hills.
And—
but I thought, unlike Santa Barbara, it has career possibilities. So, I landed in Santa Cruz, and this is actually in Scotts Valley. And this house has a converted garage. Can we go back to the previous one, please? So, you can see where my— that's my car. And from the door right by the car, you might not be able to see, To your right— is that right? Anyways, is the main house, and it was where we lived most of the time. And then the other part of the house is a rental, a garage, converted garage with 2 bedrooms, a kitchenette, bathroom, and it was divided by the laundry room. Next slide. So here's a picture of my side of the house. It was actually a fixer-upper, and this house was a disaster. And sometimes I think that when I'm out and about, I'll run into a realtor and I'll have— not have nice things to say. And I think realtors need more training. This house I bought from a real estate agent, and he didn't need more training to do what he did. It was a disaster, what things that were not disclosed. Closed. I mean, even the heater, the duct out of your bathroom that's supposed to take toxic smells out of your house didn't even go to the roof, as an example. But I have another example I'll show in a couple slides. So if you could go on. So this is a picture of the yard, and the blue object that you see at a distance is the door to the bathroom of the rental unit, and there's a white fence a fence— sorry, I don't have a pointer. I'm in a virtual studio. I can't point. But there's a fence behind one of the little boys standing out. One's Ryan and his friend. I put a fence up so that in the backyard— we actually had separate yards as well, so I put up a little fence so that they had their privacy and I had my privacy. And again, I rented to a couple, and they had 3 boys where Ryan was kind of right in the middle. Which was really nice for Ryan when he's the only child. And I had a built-in friendship. I mean, we ended up developing a friendship, and it worked out really nice, because I had— Ryan had a friend to play with, and I got some rental income, which really helped. If we could go to the next screen, please. And this was an extra little building that was on the property. You could go to the next, which I converted to a two-way office. So I had about 6 people working back there. I'm an entrepreneur, so I live feast or famine. So I guess this was during a good time. I had 6 people working for me back there. So next slide. And this is a couple that lived with us, Rachel and Mark, really nice people, and we had a friendship, and again, it was really nice for the kids. So it worked out really good. Next slide, please. But I was going to tell you, I try to give hints while I'm talking to maybe educate on anything, use what occurred to me to help you if I can. So in this particular house, the buzzword in looking for real estate, and my realtor didn't know, even though I felt like she should have, and the real estate agent I bought this house from painted the basement. This house had a little bit of a basement. Basement to it. And I guess this house was built on a riverbed or river creek. That's what it used to be like 20, 30 years before these houses were built. And I didn't know, and what I didn't know, especially important, was that there was no drainage on the property at all. So this basement had, of course, my pillars holding up part of my house, and the realtor painted the basement. So I didn't know. So it was a big mess. We had to— if you could go to the next slide. We had to tear up the whole yard, and it was a mess. It was like clay. It was like quicksand. The tractor came in there, tractor got stuck. We had to get a truck to pull the tractor out, and it was like, ugh, just a mess. So when you're looking at property, make sure you have drainage. Go to the street and make sure you have a little water duct or whatever it's called that's bringing water off your property. So, but I bought this from a realtor, and my realtor didn't know. It seems like when I haven't had a realtor, and I recommend personally, I wouldn't use a realtor anymore in buying property. I would do it all myself and use an attorney, because I think realtors need more training. I think they'd need a lot more training on very complex issues, especially because they charge, what, $50,000, 5% of a million? So I, I So anyway, that's all I'll say about that. So next slide. That's some dry rot. Next slide. And Santa Cruz is really a great place to live as well. One of the nice things about Santa Cruz is within 45 minutes you can get to Monterey. You could get to San Jose. Los Gatos is 30 minutes away. Hour and a half, you can bring it— get to San Francisco. San Francisco. Really nice. But the things that— it was difficult to ride your bike all the way across through Santa Cruz and get around and other things. So like any place, I guess you have your pros and cons. But this is Brian and Henry Cowell. It's a place we hung out at a lot. And I had two dogs. Actually, I didn't have— that's Ryan with Lancelot and Roxy. Next slide. And here's Lancelot and Roxy. Swimming in the river. Lancelot was a puppy and Roxy got the stick first. But okay, next slide. So then my next house, um, I wish I were the kind of person who fixed up all these houses and made tons of money as well, but usually I fix them up because I'm terrible. I like to get stuff done, and so I'll make myself goals. I gotta get it done. And sometimes I look back, think, well, probably It would have been okay if I didn't do all of my things on my list, but anyways. So this is Felton property in the Santa Cruz Mountains. And again, it's a beautiful home. Actually, that very unusual beautiful home had high ceilings, all redwood. If we go to the next slide, it was really weird though because it had 5 doors, 5 entrances, 5 different ways you could get into the house, so the alarm system was fairly expensive because I felt like I was more comfortable with that being a single mom living on 3 acres. Next slide. Next one. So this is a picture of the side view of this house when I bought it. And again, I look for rental capability. You can see on the picture there's a 1-car garage. You could probably even bring this full screen. And then next to it is a slider door., and then another door and another window. So on this house, I took out the garage, and I was on 3 acres, a private road, I didn't think anyone would care. So, and drywall, basically just put drywall and a floor down in there. And then the adjoining room, you could probably bring this full screen, you guys. The adjoining room looked like they were growing marijuana. And we dropped in a bathroom. And a little kitchenette for like $10 grand, $15 grand. And next to it, which you can't see— can you guys bring this full screen? My guys must go to sleep back there sometimes. Hello? Well, anyways, so there it is. So, and then next to it is— we had to put in its own sub pump. That was a challenge on this property. 'cause they put the sub pump in, and then we kept having all these problems with the toilet running right. And then it turned out sub pumps really need to be placed really, really low in the ground. They didn't put it far enough down. So that was how I created rental capability in Felton. And I never lived in the bottom. And actually, in the Scotts Valley pictures, I don't know if I could go back, but the previous home in the rental converted garage. I have some pictures of the converted unit as well. And during 2001, when I got laid off, Ryan and I lived in the converted garage and rented out the whole house, and it saved me. Again, I couldn't have lived without rental capability. So this is my rental capability at Felton. And next slide, please. A beautiful property.
