All Forum Posts by: John Morgan

@Katie Beth

I would raise rent on the next one that comes up. If they bail, then sell that property and go a different strategy. I would do that on all your properties that have leases coming up. Raise the rent 5% or more and see what happens. If they stay, then there's your cash flow. I have a few that break even after all my expenses. They will cash flow good in 12 years when they're all paid off. But I'm tempted to dump a couple if they don't perform better than this. I'm now trying the BRRRR strategy. So far so good! I may do that from now on vs paying close to market value on deals that are hard to come by in a sellers market. Good luck!

@Amy W.

I’m a little different about late payments. Two out of my seven tenants pay late. No big deal. They pay me late usually around the 10th of the month. I only charge a $50 late fee. But that’s an extra $600/year in my pocket to let it slide a little. I just tell myself I get that money on the 10th. I’ll take the extra 50 bucks. It’s not like I’m living off my rental income. Sure my mortgage companies take money out of my bank account on the first. But when I got all my loans, my very first mortgage note wasn’t due until a month later. So I look at it like I’ve got a whole free month on all these properties anyway. Don’t sweat the little stuff. So I don’t worry about it at all. And happy to keep these tenants.

@Jackson Andrews

I've bought three SFR with tenants in place. I've had to evict two out of three of them within two years. I now prefer to purchase without tenants.

@Robert Smith

Rent is due by the 5th for me. But if holidays or weekends fall around it, I’m fine bumping it up a day or two. No big deal. My tenants appreciate it and an extra day or two never killed me. They’ve all turned out to be great tenants so I don’t sweat an extra day or two. I rarely charge them my $50 late fee.

I can’t find any deals in B class Neigborhoods that’ll get me 1%. I’ve had to go to C class hoods to get 1% or better. Maybe I’m looking in the wrong areas!

@Cody Scholberg

I just did this last week and it worked out great. I purchased my first rental investment four years ago for 135k with cash. I just did a cash out refi on it. The bank I just used gave me a loan for 75% of the appraised value (appraised at 195k and they gave me 140k cash). The loan is a 15 year fixed at 4.125% with 1.9 points. Not bad, not great for an investment loan. The process was easy and quick. I took the cash and made a low cash offer to buy another SFR and closed on it last week. I'm putting 25k into the rehab and planning on doing a cash out refi with the same bank soon. It should appraise for 200k and my bank said they'd do another loan for around 145-150k after it's rented out and showing income. So yes, the BRRRR method works and having cash on hand to make low offers helps getting some good deals.

I paid 135k cash for my first property 4 years ago. I took out $ from Roth IRAs, savings and a HELOC. But it got me in the game. I just did a cash out refi on it for 140k. It appraised at 195k. Bought a property in bad shape last week with the cash and putting 25k into the rehab. It should appraise for 200k when it's all done next month and I'll repeat the process. I'll do a cash out refi and buy another one..and fix it up. It's a slow process, but works. And keeps the wife somewhat happy since I'm not going crazy with flips.

@Matthew Nixon

Consider a buy and hold strategy with some base hits instead of swinging for the fences with flips that are difficult to do in a competitive environment. My wife wigs about throwing a lot of $ into my real estate hobby. However, once I get them rented out and making a few hundred bucks per door she's happy again. But whenever I buy a new one, she gets silent again then occasionally lobs out negative comments about this kind of investing. But the BRRR method has slowly worked and I've acquired 7 properties over the last 4 years that cash flow about $3,500/month. Not great, but not bad. Once they're paid off after these 15 year loans (on 5 of them) cash flow will be about 9k/month. I keep telling her that, but all she sees is that I just dropped 4K on a new HVAC system or another foundation repair. lol.

@Christopher Liffner

Keep us posted on this. I would just ask the inspector what he needs. Don’t volunteer anything more than you need. And don’t offer him to come inside. Maybe he just needs a permit for something on the outside and you can get someone to help you out with that. Maybe he won’t ask about anything going on inside and be fine with just a siding or window permit. Good luck and thanks for sharing. There are a lot of people in your same exact boat so don’t feel bad. And we can all learn from this and the great responses posted to your question.

@Greg Golden

So I was making a 10% ROI on my rental I paid 130k cash for in 2015. Not great, not bad. I'm surrounded by Dave Ramsey people so when I first got into real estate investing I thought paying all cash was the way to go. Since then, I've taken out four 15 year loans and leveraged a bit on my other rentals so I could buy more. I bought one for cash last year because I was told I'm leveraging too much by my Ramsey people. Haha!

You asked my return on this new property I bought with my cash out refi. By the time I pay for my cash out refi loan of 146k at 4.125%, taxes and insurance, I’m only making $200/month. But...I gained a new property (worth 200k) for no extra cost and someone else is paying off that new mortgage. Easy work! My goal is 10 rentals that generate a total of 14k/month after they’re all paid off. 

My lender is out of Charlotte, NC. I highly recommend them and suggest you get a loan estimate from at least a couple lenders to compare all the costs added up. PM me for his contact info. We’re not allowed to post that info on this public forum for some reason.

I plan on doing a cash out refi on this new property with him in the next 6 months since they are so quick and competitive with their rates and costs. For me, making cash offers on properties is the way to go. I’m able to get properties much cheaper because sellers like the guarantee of cash. Then I plan on repeating after I get my new properties fixed up, rented out and appraised.