All Forum Posts by: John Morgan

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. 

@Matt Stevi

I listen to his podcasts all the time. Haven’t read that book you’re talking about though. However; he does tout network marketing and the skills it gives you. He used to sell door to door years ago and talks about the thick skin he gained from the rejection he dealt with.

Network marketing is big and makes sense in the 21 century. It’s not for everyone though. But the system works if you have a good product and can hassle a little.

@Greg Golden

I just did this last week and it worked out great. Paid cash for my first property I bought for 130k four years ago. Did a cash out refi on it. They gave me an investment loan for 146k loan (property appraised at 195k) for a 15 year at 4.125%. Three days after I got the cash from this loan, I closed and paid cash for a new property. I plan on remodeling this new property and getting it appraised soon. Then do another cash out refi on this property. And repeat the process. My rent on the new house will pay for my loan and gives me a little positive cash flow. So I basically gain a new house by just moving money around. And I can write off the mortgage interest which is nice. I’ll probably do a few more. Let me know if you want a loan terms quote from the lender I use. They work with investors and were great to work with. They will give you back 75% of the appraised value for a loan.

@Rob Grooms

I only have 7 SFRs and do it all by hand in a separate folder for each property. I just jot down the expense and throw the receipt in there. Then add up all my expenses at the end of the year. It’s easy and takes two seconds. Maybe I’m old school, but it works for me!

@Debbie W.

You will combine the income from all your rentals together. So if one is losing money it will bring your total income down which will help. I have a couple losers and don’t want to let them go. At least they help bring my total rental income to a negative number every year. So I’ve never owed any taxes on my rentals so far.

And yes, if you’re income level is less than 150k then you can write your rental income losses off on your total income tax which is nice.