Real estate investor plays role in making properties liveable

Wichita’s Mike Heldstab is an example of a real estate investor who doesn’t merely flip houses to make his profits and rent prices skyrocket. He buys and rehabs damaged and poorly maintained homes that an average buyer may not be able to buy and fix themselves, then rents them at affordable rates.

In the process of rehabbing houses, Heldstab is contributing to the supply of livable housing in the area. Homebuilding collapsed following the Great Recession and never returned to previous peaks.

The investing game doesn’t come without risks, though.

“For a lot of us, like myself, the margin of profit is lower now than it was five years ago,” he says.

A Redfin report found that in March 2023, approximately one in seven homes sold for less than what the investor paid for it.

Still, Heldstab doesn’t raise rents, “probably even as much as I should,” he adds. That’s why a number of his tenants have been with him for over a decade.

“It’s tough for anyone to be able to afford those things (costs for tenants) when their incomes maybe haven’t gone up,” he says.

Heldstab says if each neighborhood were analyzed according to average rent prices, “I would bet that almost every one of them (his properties) is double-digit percentage below market rents.”

He has invested in about 100 properties since he began in 2013, nearly a year after graduating from Kansas State University.

“I thought I could figure it out because I’d seen all the TV shows about how easy it is to flip a house – and I learned that it’s not that easy,” Heldstab says.

He spent lots of hours doing the work himself. At the time, after his day job ended, he would work until midnight every night on a house – a schedule that remained like that for four or five years.

One property took ten months to finish. It was a fire-damaged duplex that needed extensive attention.

That property posed a big challenge, but navigating the housing market during COVID-19 – especially the pandemic’s first several months – required even greater thought and skill. The pace of the market ramped up so rapidly that it began to feed on itself.

“We saw a very low supply of houses and lots of demand, and then it was a little bit of a domino effect,” he says “People would see their neighbors selling their houses for way more money than they thought their house might be worth in their neighborhood. So it just kept going one after another, and then naturally, the price continued to go up higher and higher.”

For three months, Heldstab had to operate while only receiving half of some of his tenants’ rents.

“It was a little bit of a scary time, operating on less money each month than what your bills were,” he says.

That’s why when rental assistance checks landed in tenants’ mailboxes, it saved landlords like Heldstab.

“We understood – it was out of their control. There was no way of paying rent, so we worked with our tenants and put plans together,” he says.

Victoria Baca has been one of Heldstab’s tenants for four years. She says during the pandemic, Heldstab or his wife were willing to drop by and bring whatever they needed.

“He treats us just as if we’re his family,” she says.

According to Baca, Heldstab also sends out Christmas cards every year.

“Just little things that mean a lot – that we’re not just money going in his pocket every month.”

She says Heldstab keeps his word on getting stuff done. “All I have to do is send a text to him when something goes wrong,” she says.

Once, Heldstab eliminated a decade-long tenant’s rent for a few months after they had a death in the family, and he worked with the community to support the family’s funeral costs.

“It just makes it much different when you’re not, you know, the guy pulling up only when it’s time to collect rent,” Heldstab says.

Loren Amelunke, a student at Wichita State University, is the Summer 2024 semester intern for the Wichita Journalism Collaborative.

Correction: A caption in a previous version of this story in print and online incorrectly described the relationship between the two photos of fireplaces. They are separate units that look similar, not the same room before and after renovation.

A version of this article appears in the Summer 2024 issue of The Journal , a publication of the Kansas Leadership Center. To learn more about KLC, visit http://kansasleadershipcenter.org . Order your copy of the magazine at the KLC Store or subscribe to the print edition.

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