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All Forum Posts by: John Morgan

John Morgan has started 34 posts and replied 2229 times.

Post: Getting discouraged. Everything is going wrong at once.

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,252
  • Votes 2,734
Originally posted by @George Tucker:

@Ryan Rush.

Question for all:

What is a reasonable reserve level, and what factors should be considered?

Thanks

5k per property should do it  

Post: Anyone Doing Long Distance Short Term Rental Successfully?

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,252
  • Votes 2,734
Originally posted by @Ken Latchers:
"I don’t have the time to deal with it, reservations, guests, maintenance etc." 

this is 2019. If you know what you're doing, you can automate much of that a lot cheaper than 35%. They make 35%, you make 10%.it isn't worth it. 


Originally posted by @John Morgan:

My first investment property I bought 4 years ago is a STR two bedroom cabin in Branson, MO. I pay a management company 35% to do it all. They wire money into each month and I don't hear from them or do anything. I make only 10% on my investment, but it's easy money and we fly out there once or twice a year to visit it. They take great care of it and it does well. I don't have the time to deal with it, reservations, guests, maintenance etc. Occasionally there is a problem and somebody is needed on a moments notice. Those are phone calls I don't need to deal with living out of state.

My wife HATES when I spend time away from her and the family dealing with our rentals. I hire out everything except managing my 6 local SFR. Those are easy to manage. When something breaks, I text someone to go fix it right away. Done. However, managing our out of state nightly rental takes more than a text or two and not worth the stress in my marriage to have to keep dealing with little and big issues that come up. Last month I had a leaky roof that was leaking in two different areas on my wood floors the day my guest arrived..on a Sunday. And more rain was in the forecast for several days! My management company got someone to come deal with it right away. I had squirrels get up into the attack two separate times and chew electrical wires causing the power to go out..a day before Thanksgiving one time. That's a phone call not worth my marriage suffering over. I've had other random issues come up on holidays or weekends late at night with guests. Some of us are ok with making only 10-15% on our return with zero hassles. I realize I could make a buck more by dealing with all the headaches managing an out of state STR with technology, but my marriage and time with my family is worth more than that :)

Post: Anyone Doing Long Distance Short Term Rental Successfully?

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,252
  • Votes 2,734
Originally posted by @Account Closed:
Originally posted by @John Morgan:

My first investment property I bought 4 years ago is a STR two bedroom cabin in Branson, MO. I pay a management company 35% to do it all. They wire money into each month and I don't hear from them or do anything. I make only 10% on my investment, but it's easy money and we fly out there once or twice a year to visit it. They take great care of it and it does well. I don't have the time to deal with it, reservations, guests, maintenance etc. Occasionally there is a problem and somebody is needed on a moments notice. Those are phone calls I don't need to deal with living out of state.

Great area.  May we know the management company you use?

I use Sunset Nightly Rentals. They do a fantastic job marketing it and taking care of my guests. It's worth the 30 or 35% fee they charge. STRs are so much more demanding. I'm not about to take on that task managing it from out of state. I have 6 STRs near me in Texas that I manage myself which is easy. But managing a STR our if state? No thanks!

Post: Getting discouraged. Everything is going wrong at once.

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,252
  • Votes 2,734
Originally posted by @Anthony Wick:

@John Morgan

How does that happen? $70k on 7 units? I’ll need context here. Crappy places with delayed maintenance? Surely 4 or 5 hvac systems didn’t crap out at once. How does this happen?

Yes, four HVACs went out  Well only 3, and a property I had just bought only had window units. I upgraded that place with a new HVAC system. My insurance company said it needed a new roof. Since I had to put in a new roof, I decided to fix the foundation. It needed new siding and windows so did that as well. The list goes on. Fortunately I was able to raise the rent from $600/month on it to $1,400/month after repairs. I also had  three properties with foundation issues at the same time too. Those were about 5k each.  Most of this happened all last July. Then two or three months later the rehab on the house I wasn’t expecting to fix up so soon happened. I pray that 70k worth of unexpected costs doesn’t come up for a while!

Post: Anyone Doing Long Distance Short Term Rental Successfully?

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,252
  • Votes 2,734

@Aldo Balatti

I ended up buying another STR in the same area as my first one since it was such an easy investment with the management company doing everything for me keeping it occupied 15-20 days/month most of the year. However, I was worried about an economic downturn and the uncertainty of visitors during bad times, so I sold one of them. I've only been in the STR game for less than 5 years. I would be curious to see how people have done on their STRs during bad times.


After selling one of my cabins, I decided to get into SFRs. I figured during bad times, I could probably still find someone to rent out my homes..even if I have to drop the rent 10-15% to keep them from being vacant. Not sure how much traffic my STR will get with a slow economy.

Post: Seller financing: setup, taxes, and contingencies?

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,252
  • Votes 2,734

Following this discussion. I'm seeing tons of owner financed properties listed on the MLS. No bank loans or cash purchases..just owner financed loans with these properties about 10k over market rate. I've got a couple properties paid off that I wouldn't mind doing that with. I don't know if it's worth it or how to go about it. They are older properties that are slowly falling apart. I wouldn't mind being the bank and let someone else take care of all the maintenance problems.

Post: Foundation issue with clients first deal

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,252
  • Votes 2,734

@Jonathan Bombaci

I had to repair four of my property’s foundations last year. The clay soil in Texas was the cause. Almost all older homes have issues with this. The average cost was 4K per house.

Post: What credit score, if any, do you require when screening tenants?

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,252
  • Votes 2,734

@Aaron DiCaprio

My tenants with scores below 600 seem to be lifers in my properties. They won’t ever be able to afford a house and are living pay check to pay check. These are my best tenants that seem to never want to leave. So I’m happy with these types of people. My tenants with high credit scores and higher paying jobs don’t stay as long. They end up staying only a year or two until they can afford a house to buy. And I hate turning over a property to rent out again.

Post: Anyone Doing Long Distance Short Term Rental Successfully?

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,252
  • Votes 2,734

My first investment property I bought 4 years ago is a STR two bedroom cabin in Branson, MO. I pay a management company 35% to do it all. They wire money into each month and I don't hear from them or do anything. I make only 10% on my investment, but it's easy money and we fly out there once or twice a year to visit it. They take great care of it and it does well. I don't have the time to deal with it, reservations, guests, maintenance etc. Occasionally there is a problem and somebody is needed on a moments notice. Those are phone calls I don't need to deal with living out of state.

Post: Getting discouraged. Everything is going wrong at once.

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,252
  • Votes 2,734
Originally posted by @Ryan Rush:

@John Morgan. Sorry to hear that. It’s hard. We will make it though. I will probably sell a few of mine off to pay off a lot of the debt and build it back up a little slower. I’ll let you know how it’s going. What’s your plan?

I’m in it for the long haul. I’ve been picking up some overtime at work to help pay for it and build up my cash reserves. I’ll probably not grow as fast until I can save up more cash reserves in case I need it.