All Forum Posts by: John Morgan

@Ngozi Iwunze

I self manage 10 SFR out of state and it's easy. I list them for rent on Zillow and have a handyman or someone out there show them the house and change the locks when they move in. I use apartments.com for my leases and to collect rent. It's free and they DocuSign the leases over email. Ask around town for handymen and have them do it all. I cash app or zelle people to run over to my rentals to deal with things that break. I find it pretty easy to do. Don't over think it. Good luck!

If you’re not claiming your home as a rental for write offs then I wouldn’t 1099 anyone. Just keep the cash and keep quiet.

Good luck finding any cashflow these days in A or B class areas. lol. You'll be lucky to break even with 25% down. But you'll be fine with appreciation over time. If you have a good W2 and don't need any cashflow now, then you'll be fine. Just know that when the economy tanks every 8 years or so historically, class A and B rentals get hammered with higher vacancies. That's why I focus on working class C+ class hoods in areas with not so good school districts or crime a little higher etc, but close to downtowns and freeways. These rentals are always in highest demand in good times and bad. Times are good now, but you never know when the economy will fall out and people lose jobs etc. Make sure your rentals will be in high demand areas with a price point that will attract renters when the economy tanks. I'm investing in the Dallas area and Arkansas with 29 SFR. Appreciation in TX is good but low cashflow. And the cashflow in small towns in Arkansas is pretty good, but low appreciation.

I’ve gotten most of my loans in TX with 20% down. But I’ve been putting 25-30% down the last 4 or 5 years due to low cash flow with only 20% down. And most lenders give you a much better rate with an extra 5-10% down I’ve found.

I'm in Texas and keep seeing my expenses go up between $150-$225/month from year to year. It's hard to pass on a $200 increase to my tenants every year who can barely afford their rent as is and living paycheck to paycheck. So I eat at least half the cost usually because market rent is only going up around only $100- $50/month year to year in the cheap areas I invest in. So yes, a lot of landlords are having to pay out of pocket these increases every year or risk having a vacancy. And so many investors jumped in the game the last 5 years so there is currently an over supply of rentals in many areas with a lot rentals on the market sitting vacant. I can absorb these high insurance and property tax increases in my portfolio because I have 29 SFR. My profits are still good enough. But those who only have a handful of rentals that are only making $300/month or whatever are getting crushed and probably wonder if they'd be better off investing their $ in something else.

I'd put 3% down and get an FHA loan and live in it for a year while house hacking. Rent out rooms to others to make it affordable or profitable. Save up $ and repeat this every year and keep scaling.

I started with only 25k in savings exactly 10 years ago and now have 29 SFR with 3.2 million in equity cash flowing 19k/month profit. Give yourself a decade or so and you'll be set for life. Good luck!

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Quote from @Sam Andrews:

Quote from @John Morgan:

I self manage 10 SFR out of state and it's easy. I also self manage 19 SFR within a 30 min driving distance to me.

@John Morgan How or what techniques are you using to self-manage 10 SFR OOS? Please do tell.

I just wing it. I do my leases and some payments for free with apartments.com. I asked locals for references for handymen. I use Zillow or word of mouth when I have vacancies. I’ve only had 4 vacancies, but found 3 great tenants from my current tenants asking if they knew of anyone needing a place. And listed one house on Zillow. I found a new renter within 4 hours. I cash app my handymen and it’s worked out great. Don’t over think it. Oh, and I keep people in all my rentals under market rent so I rarely have turnovers. I’ve got 29 SFR and this has been my strategy along with investing in C to C+ class hoods. Most of my tenants stay for many years. Turnovers crush profits. Be a good landlord and your tenants will take care of you is what I’ve found. 

I self manage 10 SFR out of state and it's easy. I also self manage 19 SFR within a 30 min driving distance to me.

I would wait until you have more equity and do a cash out refi when the interest rates lower at least 1% or more. Might be a few years but consider doing a cash out refi while you refi and pull some equity out to use as a down payment on another rental or two. That’s what I do and how I’ve grown my portfolio with no out of pocket $.