All Forum Posts by: John Morgan

There are DSCR lenders that will do loans as low as 50k. I did a couple DSCR loans in September with purchase prices of 75k and 70k. I even put these loans in my personal name vs my LLC.

Vacancies within a few years crush profits. I look for lifers and want people who will stay for at least a decade. I keep them in well under market rent and treat them well. I look at my tenants as if they’re my partners. I take care of them and they’ll pay off my mortgages and pay me good monthly cashflow.

Chasing people around for late rent. lol. But I make an extra 8k/year with late fees so it’s not that big of a deal to get rent a couple weeks late every month with some people.

@Damani Tilton

I work full time and self manage 29 SFR in two states. I find it easy but my portfolio isn't nearly as big as others who self manage 50-100. I use apartments.com for leases and collecting rent with most of mine. I text handymen to go fix properties when they break. I don't do any work myself. I save about 40k/year to self manage and take a few texts a month when things break or rent is late. Doesn't take much of my time and worth the savings. And with that 40k/year I save by not having a PM, I can buy another rental with the $. lol

@Diana Reinfeld

I only use listing agents when I buy. I’ve bought 31 properties using the listing agents vs my own. It’s so much easier to deal with and negotiate directly with them. Plus my offers look 3% cheaper since the seller is out only 3% in most cases. I find the listing agents give me good intel on the situation and buyer’s motivation. I leverage my offers according to that. I come in with low ball offers right away if I like the properties with a short time line for the sellers to accept or reject. I usually have other properties I’ll make offers on if they don’t give me an answer within a few hours of my offers. I put the sense of urgency in my offer and it’s worked out great for me in the last 10 years since I’ve been investing. All my deals turned out to be great, no regrets! So I wouldn’t rule out using the listing agent to get a better feel for the situation and make your offer look attractive since less commission is being paid.

@Kyle Badger

I got into real estate 10 years ago by pulling equity out of our primary. First I did a HELOC and bought a couple houses for cash from the HELOC in a two year time period, using savings and 401k loans. That was dumb, because my ROI off my two paid off houses was like 5 or 6% after all my expenses. Lol. I was a Dave Ramsey guy at the time, until I read Rich Dad. Then I decided to do cash out refis on those paid off rentals and my primary to scale up. I'm a fan of using equity just sitting there doing nothing for me to leveraging it to scale up. I was able to buy 15 rental houses from recycling equity with cash out refis. It felt like I was buying good cash flowing rentals for free since I wasn't using any of our own money out of pocket to buy more and more properties. My wife wouldn't let me use our savings to buy rentals so I had to get creative. This is how I somehow ended up with 29 SFR after 10 years with this hobby. So yes, I would do a cash out refi or HELOC on your primary to buy rentals. Nothing wrong with paying cash for properties, but I would recommend paying cash with the intention of pulling the cash back out with a cash out refi later on to buy more and more properties with the cash. I bought 15 houses with cash then pulled out the equity later to use to buy more and more. I was able to get really good deals paying cash for homes and taking most of them "as is" with tenants in place. Then do cash out refis later to grab my cash back to buy more and more. Then kept repeating. It a good way to scale up fast and ramp up your monthly cashflow. Good luck!

@Aidan Daly

I like both ok cashflow and good appreciation. I've got 18 in the Dallas area that only cashflow around $200-$400/month when I first buy them, but the appreciation upside is pretty good. So I prefer this strategy. I also have 11 SFR out of state that have good cashflow but weak appreciation. So I dabble in both and happy so far.

@Jordan Blanton

I would tap into that equity and do a cash out refi on your paid off property if you haven’t hit your financial goal yet. I’ve done cash outs on 5 paid off properties and used that cash to scale up and buy many more properties to ramp up my cash flow much more than it was with paid off properties. It feels like buying houses for free since all the new properties didn’t cost me a penny out of pocket. Then my cash flow multiplied after I got the new houses.

@Ying Tang

I’ve bought 25 rental houses this way with tenants in place with leases. I would go for it. Walk it first and talk to the tenants when you stop by to ask them what’s wrong with the house. lol. And how long they would like to stay if you keep them beyond the lease. Also ask the listing agent why they are selling it to help leverage your price. I only use the listing agents when I buy for this reason. They represent the seller first and foremost, but they always tell me good intel on the seller and I use that to my advantage when I make an offer. Especially the ones going through a divorce or are really motivated to sell it asap. I get great deals this way because the buyer has to honor their lease and that limits them to sell only to buy n hold investors. Flippers can’t buy the properties because they want to flip it right away. Families can’t buy them either. So I buy them at a steep discount because the seller is desperate and has no one else to sell to. And almost all of mine were rented out well under market rent so the sellers were really screwed because not many people want to buy rentals with low cash flow. I’ll take these “base hits” because they will be money makers for me over time as I raise rent. I do upgrade things while I raise rent over time and the tenants all appreciate it. I tell them all they can stay forever. But I’ll need to bring up rent due to my mortgage being much higher than the last owner. They all understand and most stay with me for many years. Keeping tenants happy with very low turnovers is my goal. I want them all to stay for a years/decades.