All Forum Posts by: John Morgan

I’ve got 6 tenants that pay me in two payments every month. One guy pays me every Friday. lol. This is why most of these people are life time renters, they can’t manage their money and live their lives paycheck to paycheck. I survive and they are happy.

My wife absolutely hated real estate once I bought my 3rd or 4th rental house. I begged her for me to get rental #5. Then promised her my 10th rental would be my last. Then more deals fell in my lap. I was buying and holding 2 houses a year for the first 5 or 6 years. She went nuts on me for doing it anyway without her being on board. I wanted to create generational wealth, have a hedge against inflation with my $ and diversify my wealth, vs being 100% in the stock market. It was so bad, the kids would even tell me to stop buying rentals because they would hear her complain to me every time I bought a new house.

Fast forward to now, 10 years since we bought our first rental. She retired 3 years ago due to the mailbox money being well above her income which was 65k/year. The real estate profit is around 240k/year now. I bought her a couple brand new cars in the last 5 years to keep her happy. And to show her that real estate isn't so bad and allows us to have more time off to do whatever we want and not worry about finances ever again. And I just bought her a 350k condo in AZ for us to enjoy on getaways and not rent out. She's on board now, but she still demands me to quit buying. lol. I told her I'm done. 29 SFR is enough. This was my journey with getting my wife on board. It wasn't easy and I'm not sure she ever was on board. But she now sees the rewards of buying and holding rentals after 10 years.

My advice is to spend money on her along the way. Don’t vomit her with real estate shop talk if she’s not really into it. Keep the conversations about RE minimal unless she initiates it. And when you have major cap ex issues that come up, keep some of it or all of it on the down low. Spending money on cap ex still freaks out my wife. It’s just part of the business so I don’t even flinch. But it stresses her out. Good luck! And hopefully she teams up with you and gets into it. If my wife was more on board with RE investing, I think I could be making two or three times the cash flow. But I’m cool with what I have and now a happy wife, so I’ll stop buying rentals and stay away from Zillow. lol

I self manage 29 SFR and it's easy. I have a full time W2 and find managing rentals doesn't take up much of my time. Maybe 2 hours a month at the most? And 10 houses are out of state. If something breaks, they text me. I text someone to go fixes it and cash app them the $. Done. My rentals are under market rent so people stay with me for many years saving me a ton of $ on turnovers. I list them on Zillow for free and usually find new tenants within 48 hours.

@Laura Simmons

Nobody will know or care. Especially if he’s living there.

Most degrees are worthless. Real estate is easy and anyone can do it. Don’t need a degree. Save your money for your first deal. Just have a steady W2 so you can get loans at first.

Quote from @Herminia Salinas:

Quote from @John Morgan:

@Paige Gardner

DFW is a great area to invest in. Lots of growth and appreciation potential. I’m a fan of C+ class areas.

Hello John,, 

Question, how do you determine which are C+, or even B class neighborhoods? 
On that note, what is your draw to C+?

I’d say C+ are working class hoods. Yards aren’t kept up as nice. Many homes look like rentals in the area. Below average school districts which saves me on property taxes. Less turnovers because my tenants aren’t moving there for the schools. A and B class neighborhoods have better schools which comes with higher property taxes and higher turnovers. These folks have higher paying jobs and many only need a rental for a year or two. Turnovers every 3 or 4 years crush profits. Almost all of my tenants are lifers. They won’t be able to qualify or afford to by a home. I’ll keep them in around $150 under market rent and hope they stay for decades. lol 

@Justin Fantazier

2.9% is basically free money due to inflation. Take your 50k and get a 15-30% return on it unless you’ve hit your financial goals. The dumbest thing I’ve ever done was paying off my first two rentals and trying to pay off my primary. I was a Dave Ramsey guy and that probably cost me millions. Since then I’ve been leveraging my way to generational wealth with “good debt.” And my rental cash flow went from only $1500/month to 19k/month profit by taking on more loans and harvesting the equity in some of my properties including my primary. I’ve hit my goal now so I’m not taking out anymore loans. I’m able to pay cash for some houses occasionally when my savings builds up. But don’t pay things off until you hit your financial goal. You’ll scale up 10x’s faster by using loans. And this allowed us to retire a decade or more sooner.

@Zoe Brennan

I started investing in RE exactly 10 years ago and only had 25k in savings. I was clueless and didn't know what I was doing, but was determined to make 10k/month profit off RE. It was a slow process for me, but I finally hit that 10k/month goal after 6 years. I kept throwing all my RE profits back into the next deal or paying off a short term loan. I have a W2 and can survive off it, so I never really needed my RE profits to spend on myself. After a few years, things pick up and it's easier to acquire more and more properties. Especially when your equity builds up. I pulled equity out of some properties to use to buy more and more properties since I never had much cash sitting around. I focus on buying and holding SFR. A boring slow strategy, but over time my "base hits" have started to produce some runs. My profits now are 19k/month (not counting vacancies or things breaking).

If I were you in today's environment, I'd house hack with 5% down. Live in it for a year or so then repeat and put down 5% for your next house hack. I have 3 SFR I rent by the room and they are more profitable than my LTR because I'm able to charge $750-$1175/month per room. These are in the Fort Worth area. There is a huge demand for single people needing a cheap room to rent. I actually have three couples sharing rooms that have their own private bathrooms. They are fine sharing the kitchen and common areas with others. It's cheap for them compared to getting their own place and very profitable for me. And if you can get 0% interest for a year credit cards or 401k loans, you can really multiply your properties over time by using cheap money. That's been my strategy, but I'm sure there are better and faster ways to scale up. Good luck!

I don't think there were that many mom n pop investors in SFR back then. Maybe a few people had their old house as a rental? I assume because the profit wasn't that good and hard to get loans. Now anyone with a pulse can get a DSCR loan if the property cash flows. And everyone is into buying rentals as a good investment that creates generational wealth while more and more people will be life time renters.

@Paige Gardner

DFW is a great area to invest in. Lots of growth and appreciation potential. I’m a fan of C+ class areas.