All Forum Posts by: John Morgan

Quote from @Sean O'Keefe:

Quote from @John Morgan:

Can you self manage to save you all the headaches? I self manage 8 SFR out of state and it's easy. If something breaks, I just text someone to go out and fix the issue. It's pretty easy to do.

@John Morgan has a point. 
@John Morgan what PM software do you use to self-manage properties? 

I just sort of wing it. I did put two of my tenants who are always late and don’t pay me late fees on apartments.com so they’re collecting the late fee for me if they don’t pay by the 5th. And I feel like I’m not chasing them around for rent. I email them leases and collect money on any free cash app of their choice. 

Can you self manage to save you all the headaches? I self manage 8 SFR out of state and it's easy. If something breaks, I just text someone to go out and fix the issue. It's pretty easy to do.

I'm one of those investors that had a goal of 10k/month cash flow. lol. I was clueless when I started 9 years ago and didn't really have any strategies. I just kept recycling the equity to scale up without using any of my own money. It took me 6 years to hit 10k/month net cash flow. Much faster than I thought. I'm at 17k/month now with 27 SFR. Some of us just sort of wing it and ok with cash flowing in random ways without a plan. If I see a deal, I find ways to borrow money and snag it. I'm usually taking out 0% interest for a year credit card loans or 401k loans to find the cash. Then pay them off with the cash flow. Pretty simple strategy, but it works for me. RE definitely isn't rocket science and anyone can get very wealthy off it if they just give themselves 5-10 years. My "base hits" are paying off finally. They definitely weren't home runs for at least the first 3-5 years. lol. Patience is key!

It’s a way for people to flex. And it’s annoying. Door counts mean nothing to me.

That’s on the tenant. Send him the bill. If he doesn’t pay then raise rent an extra $100. This is another reason why I do month to month leases.

I love DSCR loans. Have done 5 of them. However, it all comes down to what the appraisal says market rent will be as a LTR not MTR. So if market rent supports the mortgage then you're set.

I’ve bought 9 houses from wholesalers and got great deals. The sellers seemed happy to get a price they agreed to and I’m happy getting the properties at a price that works for me. I don’t have a problem with wholesalers making a quick easy buck off the whole thing.

@Lane Mcdonald

Oh, and one more thing when you want to compare returns with the stock market vs RE returns. Your cash on cash returns with RE might only be 7-10% at first which isn't exciting at all compared to the SM. However, the power of leverage will make you very wealthy in only 10 years or less when you factor in your monthly cash flow, principal pay down of your mortgage and 5% appreciation. For example, a "base hit" single family house I bought off the MLS 6 years ago cost me 100k. Rent at the time was $1000/month and I was making only about $250/month net after all my expenses at the time. I put 20% down (20k) and owed 80k on it. 6 years later I only owe 48k on it and rent is now $1800/month. I now net about $850/month and the house is still appreciating 5%/year. When you factor in my cash flow ($850/month), principal pay down on my mortgage (which is about $380/month now), 5% appreciation on the house ($875/month now) it equals 25k/year. And my initial down payment was only 20k! That's a 125% return on my initial 20k every year. And this is just one example of an average deal I've found. I bought most of mine off the MLS and don't hustle like many people on here do. I buy n hold single family homes in C+ hoods in the Dallas area where demand is high. My point is, don't just look at your boring initial 7-10% cash on cash return when you buy RE. There's more to it. And after 3-5 years I tap equity in many of my properties to scale up with no out of pocket cash by doing cash out refis. I've bought 14 houses by doing this. And again, this all started by taking out 62k from our Roth IRAs and doing five 401k loans over the last 9 years since I started investing in RE that have no tax penalties. So keep that in mind when comparing the SM returns to RE. And when we have the next recession, rent money keeps coming in because people need a place to live. There's no guarantee the SM will have these huge returns every year we've been seeing lately. And I target working class hoods in C+ class areas where rentals are in biggest demand in good times and bad.

@Lane Mcdonald

I’m a fan of Roth IRAs and 401ks only putting in the minimum match to get the free company money. And I’ve used both my 401k and Roth to create infinite returns and generational wealth with real estate in the 9 years I’ve been investing. Here’s how I did it.

I initially took out 62k (tax free) from our Roth IRAs. You can pull out the principal you’ve put in them over the years tax free, just not the earnings. This got us in the game with very little of our $ to get started. Since then, I’ve paid myself back with the rental cash flow. And I’ve taken out five 401k loans up to 50k to buy properties. I pay myself back with the cash flow and repeat. My net cash flow from my rentals is now 17k/month after all my expenses. I’m losing out on the opportunity costs if I would have left my money in these retirement accounts is what the critics tell me for tapping into my retirement funds and borrowing from them. But I now own over 5 million in real estate with about 50% equity by using my retirement funds. I don’t think the 62k I borrowed from our Roths and 401k loans would be worth 2.5 million if I would have left it in there. Plus I have 17k/month in mailbox money coming in which allowed my wife to retire 15 years early. And it’s all tax free income on the side due to all the real estate write offs. I’m a fan of leveraging your way to wealth and my retirement accounts were a way for me to do it since I was broke when I started investing in RE 9 years ago and was only making 40k/year. People still tell me I should never touch my retirement account $ to buy RE, but I disagree. Good luck!

@Drew McLoughlin

I’m in the Dallas area too and it’s simple to do. File at the JP once your 3 days is up. You’ll get a court date in about 3 weeks. Your tenant may end up paying you so you can always drop the case. If not, show up and explain to the judge how you gave them their 3 day pay or quit notice and how much they owe you. If they’re not out within a week of winning in court, then you file for the writ of possession a week later.