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All Forum Posts by: John Morgan

John Morgan has started 34 posts and replied 2223 times.

Post: My Triplex is Gross - Am I A Slumlord?

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,246
  • Votes 2,729
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.

Post: What would you do? Help!

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,246
  • Votes 2,729
I would cash out. School loans are bad debt. Take the money and run. Then get back into real estate when you have cash.

Post: HELOC Investment Strategies

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,246
  • Votes 2,729

@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.

Post: Tax question for rental

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,246
  • Votes 2,729

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. 

Post: Tax question for rental

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,246
  • Votes 2,729
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?

Post: Why you should NEVER invest in stocks over real estate...

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,246
  • Votes 2,729

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 :)

Post: Starting Out - Spouse NOT on board. What do I do? HELP!

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,246
  • Votes 2,729
@Kevin Christensen I’ve been with my wife for 23 years. She was on board with our first rental In 2015 because it was a nightly rental in Branson, Missouri that we could enjoy using with the kids for free on vacations. I started seeing dollar signs in real estate and bought another property 8 months later that was in foreclosure. No matter how much I showed her the value and numbers in real estate, she wasn’t on board. Especially when we had to spend $ on them for typical upkeep. I got hooked and started buying more after I refinanced our prImary home to free up cash. This caused major stress on our marriage even though all six of our properties were cash flowing about 2k/month. All she saw was that they were maintance pigs and took my time. Even a 3 minute phone call with a tenant over a minor maintenance problem drove her nuts. She was definitely not on board with my new hobby. So here’s what I did to keep the peace. I bought her stuff for the house so she could enjoy things immediately and knew not all of our hard earned money was going to our properties. I bought her a new dishwasher and fridge. I bought her a really nice backyard patio with a fire pit and grill. She still didn’t seem to be on board with my rentals, so I bought her a new car. And I’m cheap. I’m that person who takes peanut butter sandwichs to work to save $ on eating out. I’ve never driven a car worth more than $1,000. I’ve always saved money to invest vs wasted it on materialistic things. By spending more money on my wife and kids after diving into the real estate market has saved my marriage. And I don’t do any maintenance work on them. I text someone to go do it and pay them the going rate. If your wife sees you prioritizing family time over rentals, she’ll warm up to the idea when you show her the numbers coming in over time. Don’t discount her opposition to this. I did and regret it. She kept telling me “This isn’t normal. I didn’t grow up like this where my parents bought a bunch of houses. I don’t feel comfortable taking on all this debt and spending large amounts of money fixing these properties.” I would recommend going slow. Maybe one property a year. I bought 4 in one year and really upset her by doing this. Slow down and respect her feelings. If she wants more “things” and family time, then honor that the best way you can.

Post: HELOC Investment Strategies

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,246
  • Votes 2,729
@Tim Kaminski I used a couple HELOCS to buy my first two properties 4 years ago and recommend it. I scrounged up cash and combined it with my HELOC money to pay cash for these two properties. I paid off the HELOCs within a year and a half and was cash flowing good coin. I sold one after 18 months and 1031d it to buy a 225k SFH and cash flow $450/month off it now. HELOCs opened some doors for me to get started. Cash offers got me these deals. Without a HELOC I wouldn’t have gotten these deals.

Post: Single family or multi family starting out?

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,246
  • Votes 2,729
@Alex Lupo I started 4 years ago with a SFH. I added 5 more properties since then. And find all my tenants seem to be “lifers” in my properties. I stayed away from multi family units due to potential higher turnover rates. My tenants are lower income people with rent in the $1,300/month range and tell me they don’t want to ever move again.

Post: What is the best uses for a credit card?

John Morgan
Posted
  • Rental Property Investor
  • Grand Prairie, TX
  • Posts 2,246
  • Votes 2,729
@Alec McGinn I use them to my advantage and have an 800 credit score which seems to keep lenders happy. I pay off my balance every month and enjoy the 2% cash back or hotel points for free travel. I just opened a new account that gives me up to 15k balance with zero interest for a year. I’m doing a rehab and might need to carry a balance for a few months until I get it my cash reserves up. It’s free loans basically if you use them right. And they pay you to use them! A win win.