All Forum Posts by: John Morgan

I look at real estate like the stock market. It’s impossible to time it..no matter how much all the experts on here act like they know. But if you dollar cost average real estate over the years, you’ll be just fine. So I slowly buy properties in good times or bad. It all works out over time. I know a few people who said real estate was way over priced in 2015 and they were waiting on the sidelines for the next recession to buy. I’m glad I didn’t listen to their advice to wait back then! I kept slowly buying and all my property values have sky rocketed.

@Aaron Wade Nice work. Keep buying more is my advice. I started buying SFHs four years ago. I now have 6 buy and hold properties. I’m lazy and would rather spend my time and life with my family..not running around trying to make an extra buck in real estate. Two of my properties had tenants in place cash flowing about $250/month so I didn’t have to lift a finger. That was so nice. My last property needed a lot of rehab work..which has been a hassle. Sure I’ll be cash flowing a lot more when it’s all said and done, but if I could do it over again I would have rather bought a turn key property instead of this cheap deal. I try and keep things simple and maximize my time with my family. Cash flowing from day one with a turn key property will most likely be more than enough for some of us. And your family will thank you.

@Garmeon Y. I’ve done this twice before..just texting. They sent me their paycheck via email, then I had one brief phone conversation and I was good to go. They are my two best tenants and I’d do it again. My worst tenant was one I met with face to face. She was dressed professionally, very personable, drove a nice new car, had a masters degree, and even had her nanny with her. Her back ground checks came out good. She volunteered at places, worked with special needs kids, the whole nine yards. That one cost me over 6k due evicting her and damage to the house. So I’m fine with not meeting someone face to face because I’ve been burned by being deceived by people who seemed to be the perfect fit.

@Andres Aguero $500/month positive cash flow sounds a little optimistic, unless you pay cash for them or put down a monster down payment. I’m cash flowing about $500 on one of my SFHs, but I put 60% down on it. And paid cash for another one which cash flows about $1,500/month. Another one I just bought cash flows about $1,000/month but I paid 95k cash for that one. My three other properties are cheaper homes worth about 150k each and cash flow about $300/month. I put 20% down and have 15 year mortgages. You can probably do better than what I found, but I don’t come across many people finding great deals that cash flow $500/month with only 20% down. I do find that you get a much better return on your investments with cheaper homes vs the nicer more expensive ones. Demand is huge for them and my tenants all seem to be lifers that won’t ever move up or afford to buy a home. They all seem pay check to paycheck kind of people. The yards aren’t as nice, but that’s ok with me. It’s not a beauty contest with my rentals in those types of neighborhoods. All I care about is having long term happy tenants who pay me on time and watching that mortgage dwindle away over the years! Good luck with your RE adventure. And I hope you find some great deals.

Great discussion and info everyone! Just curious, has anyone been audited? If so, what was your experience like? I’ve only been a landlord for 4 years and haven’t heard of anyone I know getting audited.

@Chris DeMello I would propose that offer to him. But in reality all he wants I’m guessing is cash so he can bail on that thing sooner than later. Your honest offer sounds like you’ve spent a lot of time and effort trying to make it work for both of you. Therefore, I bet he respects your situation and would be more likely to play ball with you than some other low baller looking to get rich off his property. When you offer him 240k cash after this proposal, I bet he jumps at that. Less headaches for him and a quick transaction with someone he now respects. Don’t go a penny higher than 240k though. He’ll probably try and milk another 5-10k out of you. Good luck!

@Kyle Hern I listed two of my properties on Zillow for rent before I closed and owned the properties. They post pictures and your description of the property for free on Zillow and other sister sites Zillow works with like Trulia. My phone rang non stop with both of there properties the day I listed them (a couple weeks before closing). I made appointments with prospective tenants the second I closed and received the keys. Both tenants moved in the next day and it saved me from turning on all the utilities under my name. And I didn’t have any tedious cleaning or yard work to do. It was very seamless thanks to Zillow!

@Mike Abbate I would lower rent $100/month and get someone in sooner than later. And hope you find someone for the long haul. Raise it $100/month next year when they renew.

@Jose Ortega A good buddy of mine loaded up on a couple dozen properties before the last housing bubble. Each home was netting him only about $150/month. When the housing recession hit, most of his tenants bailed on him when their leases were up to move to much cheaper properties. He had to either lower his rent a few hundred a month to at least have someone paying something or let them sit vacant with no income. He slowly got foreclosed on almost all of them and learned a hard lesson. So for me, I like some equity in them in case I need to lower my rent a few hundred a month to compete with other buy and hold investors who bought their homes for a lot less than I did. Assume we have another recession and you might need to lower your rent $200-$300/month. If you can survive off that, you’re probably safe. If not, you’re gambling too much in this game.

@Nelly R. I’m a buy and hold investor like you and feel your pain. I went through the same thing you did. I crunched all the numbers on properties I researched on Zillow and wanted to go look at them ASAP. However, by the time it worked out with my realtor to go look, the times weren’t good or they got snapped up before I could even look. So I ended up slowly buying 5 SFHs over the last couple years on my own without a realtor. As soon as I saw a good deal I would contact the listing agent like @Cody L suggested. I told them I didn’t have an agent. By doing this, they saw dollar signs because they would get all the commission if they represented me too. They would want me to go see it right away! Then I could feel out how desperate the seller was and what kind of offer it would take from me to snag a deal. Once I made my offer with the seller’s agent, I had a feeling that agent strongly encouraged the seller to make a deal with me. It was a win win situation for me and the seller’s agent. Works like a charm almost every time!