All Forum Posts by: John Morgan

@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!

I just bought a completely dilapidated SFH with a section 8 tenant living in it for a dirt cheap price. I was shocked how people could live like they did. And it was completely infested with cockroaches and mice. Completely disgusting. I was planning on fixing just the basics. However, the pest control guy said the tenant would have to move out and the place completely bombed a few times over a week or two to kill the cockroaches. My tenant doesn’t want to move out and is completely content with all the cockroaches. They even spill out of her refrigerator onto the floor when you open the door. I’ve never seen anything like this. But some people don’t seem to care. As a landlord, I can’t lower my standard like this. I’m evicting her and having it completely gutted out and finding a new section 8 tenant. It’s costing me 45k-55k for this rehab, but I don’t think I could live with myself charging good money for a complete nasty dump.

I would cash out. School loans are bad debt. Take the money and run. Then get back into real estate when you have cash.

@Tim Kaminski

I paid off my HELOC within a year by putting all my cash flow and extra savings into it. I didn't contribute anything to my retirement during this time. I considered this my retirement account.

Thanks for all the responses. I do all my taxes with turbo tax. Now that I have six properties it’s getting a little time consuming. Has anyone been audited? Hopefully I’m organized enough to show all my records if I ever get audited. 

I have a couple tenants in dIfferent propertIes who pay me rent in cash. I’ve had them do work on the properties for free rent without any documentation. Is this a problem? I also pay them to do work on my other rentals for credit off their rent. They are handymen/construction workers and have been a life saver dealing with just about any maIntenance problem that comes up. But my bookkeeping is a little weak. I assume I can just claim less rent collected from them, but not able to write off their labor for the work? Also if I pay someone over $600 for work, do I need a 1099 on them if I claim their work as a tax write off?

Ha ha! Gotta love some people who are all in on real estate or the stock market. I’ve done very well in the stock market over the last 23 years since I’ve been investing. I like that it take only a couple clicks to make some major changes and It‘s not time consuming at all. I also like my run in real estate. It takes a lot more time in real estate to make changes. And time is what it’s all about for me. Less hassles and less time is where I prioritize my lIfe and investments. So I’ll stick with 60-70% of my investments in the stock market thank you. But I’m enjoying the passive income from my rentals at the same time while I wait to retire :)