Exponentially Grow Real Estate Portfolio | Morris Invest Live

Exponentially Grow Real Estate Portfolio | Morris Invest Live


Hello, everyone. Welcome in to our
live session today. I’m Clayton Morris. I’m Natalie Morris. I had to point so
she remembers to– Oh, now I’m allowed to talk. OK. She’s allowed to talk. So today, we’re going
to talk about how to grow your portfolio,
your rental portfolio, and how to leverage the
properties you currently have and to create exponential growth
in your real estate portfolio. If you don’t know us,
I’m Clayton Morris. She’s Natalie Morris. We created Morris Invest, which
is a large turnkey real estate company a number of years ago,
about five, six years ago. We started buying rental
properties ourselves, started rehabbing
them in the midwest. Those are our favorite markets. And we started putting
tenants in there. We started building
a great team. And over the years, it just
grew and grew and grew. And now we have we have
clients all over the world who buy properties through us. So we help them do that. So– And our brand is really
about helping other families and other people who are
interested in building generational wealth go along
on the journey with us. So early disclaimer– we’re
not financial advisers. We are real estate investors
who help other people to get motivated
and get organized and really start on
their own journey to build legacy wealth
inside of their families. So hopefully, you’ll join us and
go along on the journey with us and learn from what we
attempt to learn and learn from our mistakes and maybe
don’t make those mistakes and grow your family and
enjoy financial freedom. And so both on this Facebook
channel as well, we’ve got tons of great posted
videos and resources for you. So like our page. If you haven’t already
liked our page, click like and become a
member of our Facebook page here because we post
a lot of great stuff regularly on this channel– a lot of great blog posts and a
lot of great resources for you to take action and become
a real estate investor. We also have a great way
for you to learn more about real estate investing. We’ve got a great podcast called
the “Investing in Real Estate” podcast. We do have that. And [INAUDIBLE] where
Clayton tells we what to do, tells me what not to say. No, that’s not true. This is what it’s really
like when you’re married and you’re building
financial freedom. You work together. Sometimes you’ll work seamlessly
and sometimes you don’t. So that podcast is “Investing
in Real Estate” podcast. Go ahead and subscribe if
you’re not a subscriber. And our YouTube channel– we’ve
got a great YouTube channel. It’s where we publish a video
three times a week over there. And disclaimer, it is a
snow day here right now on the east coast. Kids are home. Yeah, we thought we’d
have the kids at school. But we scheduled this– I don’t know if
you can see that. But it’s a snow day. It’s not big time snow. –stuck inside with
all of our children. Yeah, so if you hear
the little feet, the little pitter
patter of little feet– The little– mommy, I
can’t find that Lego piece. So we put that disclaimer
out there ahead of time. So we will open
it up to questions here in a little bit,
Q&A. But first, we’d love to hear where everyone’s
watching from right now. We got a bunch of live
people on here right now. So just type in the chat. And– Is this our live number here? That’s our live number there. So over here, we
have the chat window. So go ahead and tell
us where you’re from. And hit the Like
button, by the way, and pound the Like
button as well, which you can do right
here on the live video. So again, we are
going to be talking about how to grow
your portfolio today and leveraging what
you currently have. Hello from Oregon. Nate– thanks so much, Nate. Welcome from Oregon. Hello from New Jersey. Hello from New
Jersey this morning. Let us know where you’re
form Palm Springs– Phillip, great to see you. From California–
California in the house. That’s where she’s from. Represent. Arizona. Hey, Kevin. All right, and Arizona. Great guys down
there in Arizona. Great to see you guys. And some thumbs–
give us some likes. We appreciate it. So let’s kind of more
broadly start out about why– I mean, the benefit of
real estate investing and why you would want
to exponentially grow your portfolio. What would be the benefit
of that one rental property turning it into 20
rental properties? Right, I think when you buy
your first rental property, it feels so exhilarating. And then when you get your first
check, you’re like, awesome. And then you feel
like, now what? There’s always this sort of
moment where you’re like, OK, I’m making somewhere between
$500, $1,000 a month. That feels great. I can’t retire on that. Now right? And you realize you’ve spent
a good chunk of your cash on buying that that real estate
investment and you want more. And so this is now where
the wealthy learned this trick called leveraging. So they learned to take
what they do own in order to buy other things. Right, so one of
the first questions you’re probably asking
yourself is, well, where do I find a great market? So we asked ahead of time
a lot of great questions here on our Facebook page. We asked these
questions early on. And so a lot of people
wrote in with some questions to get kickstarted here. So we’ll kind of
kickstart with that. Good place to start– how do
you find a great rental market? Well, OK, a couple
of key indicators. Employment– I want to make sure
that the job base is diverse, that there are– it’s not just a one trick
pony, not just one power plant. And that power plant goes out
of business and then everyone loses a job and no one
wants to rent and things just– crap hits the
fan, so to speak. So where I like to rent– there are a number
of different places. So in Michigan where
we rent, there are– we’ve got Ford. We’ve got schools. You’ve got some
hospitals nearby. So you’ve got multiple
jobs that are available. And they don’t tend to
go away in the recession. That’s another big thing is
that the jobs that I like to look for, the neighborhoods
that we like to rent in, are in those C
class neighborhoods, blue collar tenants that even
in a recession tend to say. You’ve got nurses. You’ve got postal
employees who rent from us, factory employees. And those people tend to keep
their jobs in a recession. And that is the case in
the 2008, 2009 downturn. Those people kept their jobs. It was the people who were
making $200,000 a year who ended up losing their jobs. Those are the people that
ended up being really hurt. And it’s not the people
that are actually building the pieces
at the factory and driving the milk
in the milk truck that end up losing their job. And what I do
sometimes when we’re researching a specific
suburb of an area like a suburb of Detroit or
a suburb of Raleigh, North Carolina, one
silly little tip is to look at the city
name on Wikipedia because Wikipedia will
give you demographics of, for instance, how many families
live in that town with kids. What’s the average age? How many married people
live in that town? That’s really a good sense of
whether or not it’s, you know, you renting to single people
or you’re renting to students or you’re renting to families. And we really– our hope
is to rent more to families because there’s some
instability there. Single people tend to move. College students move a lot. So you want– that’s our
goal is to find– so we’re looking at the demographics. Like I said, Wikipedia
has a lot of that stuff. Like, what are the jobs that
are common in that area? It’s pretty easy to do
that kind of searching. But I want to warn you, though. You can get bogged down
in this data paralysis and it can keep you
from taking action. For instance, we invest
heavily in Indianapolis. And in Indianapolis, for
instance, there are– if you look at
crime statistics, it may be, oh, there’s
a lot of crime. Actually, if you break
it down, crime statistics are broken down by zip code. And as any Sheriff
will tell you, it’s a terrible way to
measure crime because that’s based on the postal service. The zip codes are based
on postal service, not for areas where you
would see pockets of crime. So in Indianapolis
where we invest, I don’t worry about crime. Yes, some of the crime might
bleed in from a few miles away and it might affect our
zip code in the data, but that is actually
not reflected in the neighborhoods
that we’re located in. But if you’re just a
keyboard cowboy hanging out doing data analysis
all the time, you’re never going
to take action. For instance, you might not
ever invest in Indianapolis even though the vacancy
rate is super low. That’s something else
you want to look at. And the crime data actually
in the neighborhood we invest is actually low. But the web sites don’t
necessarily reflect that. So you got to be really
careful about when you’re looking at
those types of things to not be thrown off course. Another thing that’s important– Also, yeah, Rent-O-Meter
is a good way to– you put in the zip code
of where you’re looking. And you’ll get a sense of–
if the rents are really low in a certain place– like
$200, $300 for a one bedroom apartment– that’s
not a very good sign. We’re looking for
rents in the, you know, 600, 700, 800s,
1,000 even better. So you want to sort look at
what’s the average rent for one or two bedroom apartment
or house or condo or a duplex in that area and
that will give you a good sense as well. Another thing you
want to look at is construction and
what’s being built in those particular towns. There’s a great piece in
the denverchannel.com web site just yesterday about
single family homes in some of the bigger urban areas
are actually the best way to invest right now. Those are our bread and butter. We like buying single
family homes and duplexes. Those are our favorite
properties to purchase. And one of the reasons is
that builders aren’t building those types of houses, those
two bedroom, one bath, three bedroom, one bath houses,
those starter homes. Millennials are
skipping starter homes. They’re not buying them. So you know what? Builders aren’t building them. But guess what? People still need to rent that
and people love to rent them. They love to be
near the downtown. So for instance, in
Indianapolis, our properties are located close
to the downtown. So you’ve got all the shopping. You’ve got all movie theaters,
restaurants et cetera. You’ve got the factories where
a lot of people will work. You’ve got Eli Lilly. You’ve got the hospitals. You’ve got the
convention center. So those benefits of having
not a lot of construction and a demand for rental
properties in some of the inner cities,
that’s why we love being near those urban hubs. So you know, that’s just
something to keep in mind. Also, I will say that– someone had asked
the question here about we have two renovated
properties recently in Indiana and they’re vacant. Can you reassure us
that there should be demand in February and March? Absolutely. In fact, you know,
November into December and the beginning of
January is probably the slowest time to get a rental
or to get your property rented. And if you’ve got a great
property, you want to– and especially if you’ve
got them free and clear, just sit and wait. Wait for a month or two to get
through that holiday period. Why? Because you end up getting– I don’t want to
say a lower class– yes, you probably get a
lower class of tenant. If someone needs to
move before Christmas, chances are that person probably
has an eviction on their record and they are not likely
going to be the tenant you want in your property. So yes, you could have– if you
had a bad property management company, they could fill it
and fill it with a bad tenant. But guess what? That tenant might not pay
and be out in February. So right in February,
March, and April– that is the best time of
the year to get tenants in your rental properties. Why? Why? Tax returns. Oh. Tax returns. That’s what I was thinking. Yeah, so tax returns– Exactly what I was thinking. And a lot of our
tenants would love to prepay many, many months
on their tax returns. So they get their tax
return check back. They want to prepay
four five, six, months. And we literally
will– and our markets will run out of properties
to fill for tenants, which means we get to go through
and pick the cream of the crop. So if you just have
a little patience, then you get a tenant who
wants to stay for years. So it’s like, if you can
just wait that extra month and you’re not carrying
a mortgage on it, you’ve got free and clear,
wait for the right tenant to get in the property and
you’re going to be golden. We’ve got a vacancy on one
of our properties right now. We told them wait. Wait until February. Wait until this time of year. Actually, two of our
properties are vacant. Well, two. One in North Carolina– Oh, right, right, right. No, but that one’s under
construction still. Oh, right, right. But still, it’s vacant, right? But we have to put in
an AC unit right now. And then one in
Indianapolis is vacant. Wait until February when you
can get a good tenant in there. And I rely heavily on
our property manager. So a lot of times, they’ll
say, we’ve got this applicant but they either
have this or that. Like, our property
managers really take a close look at the
income that the applicants are telling us. They look at their credit. They look at their– maybe if they have a
criminal background. They do background checks. And a lot of times, our
property manager will say, this person qualifies but
there’s this thing and– or this person
doesn’t quite qualify but thinks that they
can make the rent if they move in with their
boyfriend kind of thing. And you know, the fear
in me is always like, just get them in because
then we’ll have some money. But I can always tell that
my property manager is trying to talk me out of it but
I get to make the final say. So usually, I try and see– because they can’t
tell me, like, don’t rent to this
person because of this. But they’re giving–
they can say, we don’t think this
person can make the rent. So either you can
lower the rent or– and they’re usually trying
to give me that gray area. Don’t rush it. If you don’t have to
rush it, don’t rush it. Wait for a quality time. And before, we have done that. Like, just get anyone in. And that hasn’t
worked well for us. So you know, your
property manager will make it crystal
clear when you’ve got someone to give the
thumbs up or the thumbs down. We did that on a
property in Pennsylvania. We were sort of– it was like a mistake
property we bought years ago. It was like– you
know, I don’t want to go through the
whole story right now, but it was sort of like– it’s
actually turned out great now. Yeah. But then I did it all wrong. It’s caused many heartache. Yeah, a little– anyway,
we were sort of like, are we going to get
this property rented? Are we going to
get– oh, you know, I think I made this mistake. And the seller was like, oh
yeah, it rents for like $800 and we never were able
to rent it for that and– We didn’t do our homework. I couldn’t stand this lady. She was always bugging me. Like, you know, oh my goodness. So anyway, we got it rented
and then like a month later, the person moved out. She left all her furniture. –all kinds of trash. She left her furniture. –we had to pay for
it to be cleaned out. It’s not like– Yeah, and the seller– it was ridiculous. And like, it was even
before it was in our name. So the seller
wouldn’t clear it out because she’s like,
I’m an old lady. I can’t do it. And so it cost us an
extra $500 to clear out. Why are we telling
this horrible story? Well, I was just saying the
point of rushing, putting a tenant in property. OK, right, yes. Yeah. All right. There was two people in that
property that left us trash, actually– the tenant from when it
was sold and then the next. And then we were so desperate
to get someone in there that our property manager
is like, I don’t think you should– you know, well,
there’s these people. Let’s see. And we’re like, that’s fine. Just get them in. Get them in. And then they left us trash too. It was like an Ikea big
entertainment center that we knew that, like,
if we put on the street, it would just break. It was– like, we couldn’t– and
you get a fine if you just put it out on the street. It was horrible. Yeah. So anyway, point is, don’t rush
it when it comes to tenants. Get a good tent in
there that you know will probably end up staying
for a number of years. That’s what you want to go for. So– OK, so– Let’s go to this question. All right, so again, if
you’re just joining us, we are talking about
growing your portfolio. And that first question was, how
to find a great market in order to expand your portfolio? So this next question– OK, if you’re using
your property equity for the down payment on
your next investment, how does the bank feel
on 100% loan to value? Banks don’t like that. They don’t want to loan
you 100% loan to value. In fact, you know, the
only way you can really do that these days are VA loans
or any of those hardship loans. Well, a VA loan is
not a hardship loan, but it’s like a specialty loan. Right. Sometimes a credit
union through– but even they– it’s
rare that you’re going to do 100% loan to value. Even the private lenders
that we have worked with want 20% equity down. So yeah, I wouldn’t do that. And then you’re financing–
you’re putting a debt service on 100% of the value. That’s tough. Those are tough to do. I don’t know who– I don’t know who would do that. I haven’t seen–
you know, you got to have some skin in the game. You really– I think,
you know, the only way you can get 100% debt
service on a property is if you’re
really, really using private, private money,
as in, like, your mom or your uncle or your buddy. Right. So– Next question– how can you
keep building your portfolio? Well, there are a
number of different ways to keep building your portfolio. First, I would say you
need to start with a goal that you want. What is the financial goal? What is the lifestyle
that you want for you and your husband,
you and your wife? Where do you see
yourselves in five years? And so I would start with that
question first rather than just artificially thinking I
want to build my portfolio. What goal– But sometimes more is just more. Right? Right. You’re not you’re not building
more just to have more. You’re working backwards from
your freedom number, which we’ve talked about
so many times. Right, so how can you keep
building your portfolio? Well, a number of things. So let’s start with
the premise that you’ve got one property free
and clear, right? That to me– well, maybe
that’s not the right question because if you keep
building your portfolio, a portfolio me is at least
two properties, maybe. I don’t know. We can make all
sorts of assumptions. We’re talking about in
general how we build. And we sort of rushed
the concept of leverage. So let’s not make a scenario. Let’s just talk
about the theory. So leverage is one way. So let’s talk about leverage. So now let’s say you’ve got
one property free and clear. Let’s say the property
is worth $50,000 and you’re able to find– you’re able to get– there’s
a couple of different ways. Maybe a home equity
line of credit on that first rental property
that you own free and clear– so you own. It’s $50,000. You can get a home equity line
of credit usually for up to 75% of the value of that. So what’s 75% of 15,000? Do you see my calculator
floating around over here? Hang on one second. Where is my little calculator? My calculator that
I use all the time. 37 five OK, so $37,500. . The bank would give
you a line of credit on that particular property. Now what I love about home
equity lines of credit is that it’s not
a one time check. They’re not just handing you
a checkbook or a one time cash loan payment of $37,000. As in the case of a
cash out refinance, which we’ll get to in a second. But you’re getting that
HELOC, that home equity line of credit. Now you can reuse
it multiple times. So you can take that 37 five
and purchase another property free and clear. Now that next property is
technically free and clear. Right. Right? Now you’ve got two
properties free and clear. But you’ve got a home
equity line of credit that’s now maxed out at 37,500. The reason that I
like this strategy is that it’s not
amortized interest in the case of your
home mortgage, rate? It is– it’s not amortized,
meaning it’s simple interest, just like a credit
card would be. Just like your credit card,
it would be simple interest, meaning that the
interest accrues monthly. So if you make small little
micro-payments per month on your home equity
line of credit, it’s as if the interest
doesn’t really accrue. So at the end of
the year, you’ll look at the interest on
your home equity line that you’ve taken out and
you’ll be like whoa, $40? 50– $100? $200? That’s what I spent on
interest this year on my home? Because you were making, like,
weekly little payments back. Versus an amortized
mortgage that you might get a 30 year fixed
or a 15 year fixed rate mortgage with your
bank, you’re going to end up having a
higher rate of interest. You’re going to end up paying
almost twice what you probably put into it. Right. Right? Yeah. And so I mean,
that’s just one way is a bank product called a
home equity line of credit. But you know, we’ve talked
many times about private money. You can pool investors and find
private money in order to– and then you set your
own terms, right? Not just what the bank
says, but you know– and I talked about using
your uncle or your friend or whatever. And that sounds funny,
but really, there are a ton of people who do that. We always recommend Susan
Lassiter-Lyons’ course, getting the money, because
she really shows you how to find people
in your life who are interested in
your investment if you’re just the one
who manages and puts a debt service on it. And that’s worked great
for a lot of our investors. So there are a lot of
ways to skin a cat. You know, you just
have to really open your eyes to the fact that
you can be very creative when it comes to money. And we’ve talked
many times about how we thought we just would
own our personal property and then we would go
to the bank and see how we can invest in the
next one and the next one and the next one. And we really have used– we don’t really use
the bank for that. We use the bank for home
equity line of credit. We use the bank to have
big accounts for our LLCs. But other than that, we
don’t use the bank much for investment. We use some private
money lenders for that and we use cash. Yeah, I mean, if you’ve
got a primary mortgage, it’s a killer way of using
the equity in your own home not to buy a boat,
not to buy a car, but to use that home equity
line from your primary house. That’s what we’ve done. Honestly, that’s
probably our best way of exploding our
portfolio is using– And the 401(k) loan. Right, so every year, we’ll do
a 401(k) loan, which you can do. So there’s two ways you can
take money out of a 401(k). One is a hardship, which
is an actual withdrawal, and you’re going to
get penalized from it. The other way is a
loan to yourself, a 401(k) loan to yourself. It’s your own money. Almost all 401(k)
providers make it very, very simple to do this. Fidelity is ours. I know Wells Fargo– like, your
mom bought a rental property through us. She did it that way
through Wells Fargo. And you set the terms. You pay it back
yourself with interest. So this is actually
a way for you to increase your 401(k)
value because you are paying the
interest to yourself and the interest is
over and above the limit that you’re allowed to put. So say you’re only allowed,
what is it, 16,500? 16,500 a year. You’re only allowed
to contribute 16,500. But if you put that 16,500
and you take a loan out, the interest you put
back in it doesn’t count against your 16,500. So you can go above and
beyond, maybe upwards of 18,000 or 19,000 a
year in your 401(k). And so these are many tricks. There’s many ways. You just have to make
yourself familiar with the various products
that you can use from the bank and then make yourself
familiar with the various tools that other investors use, like
private money and whatnot. There are so many other tools– for instance, checkbook use
of your IRA, checkbook use of a 401(k) so you can set
up your own individual, self-directed 401(k). Right, that’s another way. You know, it’s like
another killer strategy. It’s just a matter of– you have to think of
money not as something you do according to the bank
and the bank says the rules. You have to think of
investment as something that you can play
on your own terms. And really, that was a great
lesson for us that once we started to think more creatively
about wealth building, it ended up being something
that we felt like we could be in charge of rather than just
check my 401(k) and hope that whoever is elected
president won’t plummet or– that kind of stuff is– that’s not empowered investing. Right, that’s fear
based investing. Lois writes us, can you get a
HELOC on a property in an LLC? And Mark, we’ll get to
your question in a second here about having a hard
time pulling money out of the equity in a property. First of all, it depends. You can probably find a lender
that will do a home equity line on a property in an LLC. Most of the more
traditional routes, though, would require
you to do what’s known as a quick claim deed– so deeding it over to your name. Now, it’s not a sale. So that means it’s
not a taxable event. But you’re deeding
it over to yourself. Then you could go
through that process, get the home equity
line of credit, and then flip it right
back into your LLC again. So there are ways
to do that and be creative about having to kind
of convert that to get your home equity line. And some you might
even actually find that people will do a
commercial line of credit. So you can do that as well. Mark asks the question
of how do you– That’s a good question. What, Mark’s question? Lois’ question. Oh yeah. Good question, Lois. They’re all good
questions, but– Yeah. Mark has an investment
property in Florida paid off but he’s having a hard
time pulling out equity because it’s an
investment property. Well, I’d shop that around. I mean, what are
they telling you? Mark, just post here in the chat
out what they’re telling you, why they’re telling you
you’re having a hard– you know, what is the response
that they’re giving you? Maybe we can address that a
little bit later in the show here. I mean, we were able to get
a home equity line of credit on a second home. Yeah, and on an investment– The terms are– that’s rental property. The terms are different, but– Yeah, they’re not
going to give you– it’s not going to be
80% loan to value. It will typically be 75% loan
to value of the property. But typically if it’s
rented and it’s rehabbed and it’s up and running, I mean,
you’re going to be good to go. I mean, I don’t see why
that should be an issue, but again, I’d love to
hear your thoughts here. Philip asks a good
question here. Even if the HELOC
drop is interest only, an interest only home
equity line of credit. So there’s two different
versions of home equity lines of credit that Phillip’s asking
about– an interest only– Or an amortized. –or an amortized version. Which one do we have? We have an interest only one
because we try and pay it back within a certain amount
of time before it changes. So what we do is we use it– well, this is a
different strategy because I’m talking about
using it to pay down the value of your home. Let me think about this. You’ve stumped me a
little bit because what we try to do is change
the value of equity that we have in our home so
that we’re able to renegotiate the home equity line of credit. But if you’re using
it for an investment, I guess you would want
to amortize it right? Because you want to pay
it back because you’re not assuming that the value in
your home is going to change. Right. All right, you made me
think through that one. Hey, Ted is here as well. Hey, Ted. Welcome, welcome, welcome. So Natalie writes, my husband
is changing jobs and needs to close his previous 401(k). What might be his best
option to potentially use it to finish an efficiency
that we have in our home to rent out? We’d like to use the rental
income from the efficiency apartment about one to
two years to purchase another personal home and rent
out our current house entirely. OK, you want to use
the 401(k) for this. I would say– You can roll it into a Roth. I would say– well, I mean,
checkbook use of your 401(k). You know, we recently
had a podcast episode with Dmitriy Fomichenko. I would check that episode of
our podcast, the “Investing in Real Estate” podcast. I would reach out to Dmitriy. He’s fantastic and he
does the self-directed. He sets it all up with I think
his company Sense Financial. And what they’ll
do is they’ll talk with you about the checkbook
control of your 401(k). And it’s really powerful because
it lets you invest it however you want to to purchase
rental properties, to do what you need to do to
finish that property off. So that’s what I
would look into. Check with Dmitriy
and see what’s the best product for you. But check– That’s a good little trick. Yeah, checkbook control of your
401(k) is a killer strategy. Hm. So good. So we have some
other questions here. Let’s do this one,
the pocket listing. Can Moris Invest help me acquire
20 to 25 properties per year? Yes, absolutely. We move with the pace
of our investors. I see a lot of our
investors in here today. Ted, Kevin– we’ve got a bunch
of other investors in here as well. So absolutely, we can help you
grow based on your own growth rate and how you are
looking to acquire. We can absolutely help you. Because let us reassure you
that our acquisitions team– that we’re working really hard. They’re working
it like Lady Gaga. That’s right. What’s the next question? OK, if you’re buying a
house through a realtor, do they have access
to pocket listings or other houses that may
not be available on the MLS? So what’s a pocket missing? A pocket listing is when
someone in your brokerage is representing
the seller and they don’t put that house on the
open multiple listing service. They then either
sell it to someone because they know
another buyer who they think is a good
match or maybe someone else within the
brokerage has a buyer. So they never actually
list it because all sales happen on behalf of the broker. All real estate agents
inside that same brokerage all report to the broker. Everything happens on
behalf of the broker. So a pocket listing is
like, the broker is up here but one real estate
agent has the seller and another one has the buyer. And they match them. So they all– that all happens
under the same brokerage. And it never hits the MLS. Now, you’re not
supposed to do that. And if you do it, you
have to get your seller to sign something that
says, I agree that you don’t put this on the MLS. And the reason you’re
not supposed to do that is because you’re a fiduciary. I am a licensed
real estate agent and we were warned against this
really heavily in real estate school because you have a
judiciary duty to your client to get the highest
and best value. And so if you never put
it on the open market, you’re never going to get
the highest and best value. But sometimes– I actually
sold my condo in a pocket deal because I was OK
with the amount that had been offered from someone
else and I understood it. And I was OK with it. And also– But sometimes–
you interrupted me. Go ahead. I was going to say also
pocket listings sometimes, though, are– they’re very temporary. Very often, a realtor
will have a listing that they just got
and it’s probably not in great condition. I mean, let’s be honest. Typically, a pocket
deal is a deal that comes in and needs some work. It’s a desperate
situation and a realtor might have it temporarily
before they’re going to put it on the MLS. And the realtor might
say, I’m telling you. We put this on the MLS, you’re
going to– and a lot of people don’t want it out on the MLS. Or they don’t want to wait. Right. Or they think, you know– like I said, the terms may
be if you understand it as the seller, what’s
happening, and you understand these people are
offering this, we think that this is the best
it can do and you as a seller agree, fine. That’s OK. The problem with a pocket
listing is a lot of times, the seller may not understand
it and they may not understand what they’re signing. And if they come back
to you as the agent and say you never marketed this
and I didn’t understand it, you could be in some
deep doodoo as the agent. So a lot of times, that’s
not the best way to find– and really, that’s not the
best way to find good deals. That’s not for investors. Well, I mean, I disagree. I mean, it is for investors. I mean, that’s the
point of it, right? So that realtor may
have a pocket deal and he’s going to say
to that seller, look, I have a network of
investors that I work with. That means that you’re
not going to have people traipsing through your house. We’re not going to have to put
a lockbox on the front of it. We’re not going to
have to do open houses. I’ve got a network
of investors who will jump on this because it needs– I’m going to be honest
with you, Sally. This house needs a lot of rehab. And so somebody like me– OK, I’m thinking of– Yeah, somebody like me would
swoop in, say I’m going to pay. I’m going to pay cash. I’m going to buy that house. It needs $40,000 worth of work. And that’s my best
offer because I need to know where my numbers are. And if that seller is
motivated and that realtor paired us together, it’s
a win-win for everyone. Then they don’t have
to do open houses. They don’t have to put it
out publicly on web sites. They don’t have to have
people driving by her house, you know, peeking in windows. So there are some
benefits to it. They just need to
do it above board. Right, and you have to think
about how the broker is now going to get the commission
for the buyer and the seller. And so are they going to be able
to represent both sides fairly? And so you have to– for a pocket deal, you have
to make sure that you’re crystal clear on the price. And what I’m trying to say
just because they have such an attitude about it
in real estate school is it’s maybe not
great for if you’re selling your own property. But if you’re looking
for deals and you don’t want a house that’s been
bid up on the open market, obviously it’s great for buyers. Right, so have those
connections with your property– I’m sorry, with a local
realtor that you’re building that relationship with. And if– it’s a two way street. So if a realtor knows that
you’re a real deal investor– you know, the people
that we work with know that if someone
brings me a deal, we’re going to buy
it because it’s going to need
$30,000 worth of work and we’re going to
do the work on it. We’re not tire kickers. Right. You know, we’re not there just
to feel good about real estate. We’re going to take action on
this property or we’re not. And we have money to back it
up to do it and take action. So you need to build that
relationship with the realtor if you’re going to
go down that route and finding properties yourself
and rehabbing them yourself. Develop that relationship
because if a realtor is going to start sending you
properties and taking time to pull properties out of
their files to send to you and then you ignore their emails
and you don’t respond to them, they’re going to quickly
stop working with you. So even if you just send
a response like, hey John, the first property you
sent me doesn’t work. The numbers don’t match. Here’s where I need
to be on my numbers. Here’s what I’m looking for. Oh, OK, great. Then they send
you a new property and it’s closer to what
you’re looking for. Let them know that
feedback so you can develop that relationship. Otherwise, you’re wasting
that realtor’s time. And the realtor may know
their seller really well and know this seller
needs out fast, right? So it doesn’t serve this seller
to have a six month contract period. It serves this seller to
have a quick cash close. And in which case, they are
honoring their fiduciary duty to do right by their client. OK, here’s another question. How do you manage your
property manager– building a strong
relationship there? Well, you don’t manage
a property manager, like a good property manager. A good property manager
manages your property and it depends on the type
of lifestyle you want. Like, we don’t like to– personally, at Morris invest,
if you come to work with us, there’s a level of trust. We are going to do our
job, renovate the property and work with our
property management teams to get the property rented. If you are sort of a– I don’t want to say a
high maintenance person. I mean, you’re like really– you always want to be
on the phone every day finding out how your
property’s doing. You’re driving by the
property every day. Well, you have to really take
to heart the fact that this is– what we’re promoting here is
a lifestyle of passive income. And the key word
here is passive. And so when you buy
a house to live in, clearly you want the
inspector inside your house, like, running the water and,
you know, looking at the floor. And Clayton always jokes that,
you, know when we buy a house, he needs to be there
with the inspector because I’ll go in and
be like, it’s fine. So you know, like, oh,
you missed something. It’s fine because– You’re talking about
primary residence. When we buy our primary
residence, right? But when you buy a
house for investment, you want the inspector
there to tell you, are the bones of the house good
so that you can build on it? And what else? Like, there’s a great piece in
the Susan Lassiter-Lyons course where she had this inspector
come for an investment and he was, like, picking
through the floors with like a fine tooth comb. And she’s like, get out of here! I want you to tell me,
are the bones good? Is the roof good? Because I can build from there. I know what I’m capable of– She owns 500 properties. And she’s like, get out! She basically kicked
this investor– Well, because– –telling them about the
condition of the carpet. And she’s like, I’m
redoing the carpet. Like, this is what
I need to know. So you need to– why are you sighing at me? Well, no, because
we were talking about property managers. But you were going down– why am I even here? We were talking about
property managers. Like, how do you manage
a property manager? My point is, you’re not
managing a property manager. Right, no, the point that
I’m trying to make is that– No, I’d just love to hear– I quit. I would love to hear
how you come back to– You were just talking
about how people shouldn’t be high maintenance. Right, I’m saying for a
property management perspective. Like, your property manager
who is managing your property and getting it
rented and tenanted, doing criminal background
checks and making sure that it’s rented and
taken care of– right. And if there’s a
maintenance request– My point is, you’re not fussing
about the curtains with them. Like, hey, you did that, like,
little you know, like, thing. They’re going to–
you know, you’re going to have trust that they’re
taking care of these high level things. Right, so you shouldn’t have
to– my answer to that is you shouldn’t have to manage
your property manager. They should be handling
this themselves and you should put your faith in
a good property management team that you’re going to collect
rent checks on a regular basis. But you really need to
be honest with yourself. Like, if you’re like the type
of person that Natalie’s talking about where you like to fuss
over the cords on the blinds and you love to know the
paint color and you love to be in there doing all
that stuff, you’re– Then you’re watching too much
of those real estate shows. And you’re also increasing
the anxiety of the team that you’re working with. Like, let them do their job
and put your trust in them to do their job. Or if you’re not comfortable
with that property management team because they
haven’t rented it, it’s vacant for six months– I talked to an investor the
other day out of Memphis and he’s got a property that
has been vacant for five months. Now, five or six
months, something was stolen off of his
electrical box on his property. So I would have conversations
with that property management team and find out,
did you make– you know, why was that
property– why was there an eviction in that property? Because they had an eviction
on this particular tenant. Person didn’t pay
for five months and then squatted
in the property. Well, OK, what did your
screening process look like? You know, that’s a
good question to ask. And so you want to
find out, you know, do they do a criminal
background check like the ones that we work with do? How do they verify employment
with their current employer? Do they check with
previous landlords to make sure they pay on
time so you don’t get someone with an eviction
on their record? Look, you’re going
to have a bad tenant. It’s going to happen. If you’ve got a portfolio
of 30 properties, you’re going to have an
eviction at some point. It’s going to happen. So you know, you don’t want
to think that it’s always going to be roses. But you’ve got to just build
that into your thought process that this is business
and it’s going to happen and you’re dealing
with human beings. And it’s part of the process. Right. Although I thought recently
about how they can, you know– because sometimes there are
things that I feel like I’m– there are things you
need in your– like, we’ve talked about your
Dropbox of organization. Like, you need your contract
with your property manager. What are they responsible for? What do you pay them? Et cetera. You need the property
manager to send you the lease once it’s all signed
and done with the tenant that’s in there. You need to keep track
of your insurance, all of that kind of stuff. And so I’ve recently
thought about setting myself reminders because we
have around 30 properties now and that’s hard for
me to keep in my mind. Like, did they send me that
contract for that new tenant? And you know– so I’m
thinking about how I can organize that better
and set myself reminders. Because you do need to– they can’t– They’re not your
employee in that way. Right, you know, they’re
going to send you that stuff and they’ll keep it
on their end and they should be able to have
it for you if you ask. Like, hey, I lost that lease. Can you resend it? But you need to have it
too because your insurance agent, when it comes time to
re-up those properties, they’re going to say, is this
property still rented? The insurance underwriters,
some of the underwriters want to see the contract. So you should have that handy. So it is important
to be organized. And what is– you probably
don’t know the episode number. We have a whole episode
number about how to keep organized in the
investing in real estate podcast because I
think it’s really– I’ll look it up. Yeah, because that was around
the beginning of the year where we talked about
how to make sure that you’re super organized. Those things are really
important to have your systems in place. Yeah, and another thing
that’s important too with your property
management team is that when you’re getting a property
management team together– let me– hold on,
I’ll pull it up here. It was– How to organize your
investments, episode 100. So– oh, episode
100 of our podcast, investing in real estate on how
to organize your real estate investments. So check that out. We went through strategies
on how to do all that. Can you walk through the process
of pulling a property out of an LLC to take a HELOC
out to buy another one and then putting
it back in the LLC? Sure, Let Me just
finish this thought on the property
management, Philip, and I’ll get to that
question in a second. When you’re talking with
property management companies, sometimes you will find out
that the way that they sell themselves to you is important. Listen to how they
sell themselves to you. If they want to talk to
you about the software that they use, the
bells and whistles of the software that they
use, and how they will market your property and how you can
go online and kind of check the status of certain
things, that’s great. I would be more
interested to know what they’re focused on internally. And the property
management teams that we work with in
Michigan, in North Carolina and Indianapolis, their
main focus is they don’t really care
about the software. That’s not their main focus. What they care about is
cash flow and making sure they’re putting a proper
tenant in the property. And they also have team members
who will go out and make sure that even during
the holidays when tenants may want to spend
more money on their gifts than they do their rent that
they’re knocking on the door, making sure that that that
rent payment is coming in– very important. It’s nice to have software. I care about the software. You care about the
software, but do you also care when your property
is vacant for six months because they spent
money on software and they didn’t spend money
on focusing on the cash flow and getting the
properties rented? That’s what I care about. So you know, those
are the things you want to make sure
that you’re focused on. I mean, I like to see that
my receipts are automated. We had one new property
manager recently that sent us like
a big statement. And I was like, where’s
the statement, you guys? And they’re like, oh,
it’s coming in the mail. I’m like, in the mail? Like, get out. I don’t want it in the mail. That’s how they
do it down south. It came in the mail and
it had literal receipts that the contractor
had written out. Like, you want me to keep this? OK. So I have to now put it
in a folder in a file. And I’m just not used to that. I like to see those
things digitally. Like, scan me that
receipt and send it. I don’t need the actual– you
know how I feel about receipts [INAUDIBLE] it all and– But there’s no cookie
cutter solution. I guess what Natalie
is saying too is there’s no cookie
cutter solution. There’s no one size fits all. I have– it’s my prerogative
to like it the way I like it. No, no, what I’m
saying, even just the organization of our rental
properties in our portfolio of stuff, you know, there are– there’s no one way. Like you just said, you’re
trying to figure out the best way to organize. Right, and when this property
manager– they were like, this is the way we
work for things. So in this market,
we’ve been testing out a few different
property managers. And I’m like, I don’t
like it this way. I don’t want a receipt
for screws or whatever. If I need that, I will
ask you and I’m going to– like the way I usually get it
from my other property managers is just like, we
hired this plumber. Here’s the receipt
attached to the– it just goes in my Dropbox. I never have to touch it. So it’s just one more thing
for me to have to look through. And I’m like, what is this? Phillip– I like it the way I like it. So Phillip asked the
question, can you walk through the process
of pulling a property out of an LLC to take a he
lock out to buy another one and then put it back in the LLC? A title person does that. Yeah, a title– Your title person or a lawyer. It depends on your state. So it depends on– lawyers
will handle closings in certain states. And for instance,
you’re in Florida. The title company will handle
your closings in Florida. In North Carolina, a lawyer
will handle closings. In Indiana, a title company
will handle closings. And they can assist you in
structuring that and pulling those things out. But you can talk to a
real estate attorney. It usually costs about
$100 for them to prepare. And then you have to get
it notarized, the deed. And then you send it right back. We’re transferring
some of our properties from one LLC to another. And the county that
we’re doing that in is making us pay a
transfer tax for that. So there could be some
other costs involved depending where you do it. The one we were talking
about in Pennsylvania is going to be a little bit
more expensive than others. So make sure you talk to your
lawyer and figure that out. Right, right. So good question, Phillip. Hope that answers that. And a few more questions
here we’ll get to and we’ll wrap it up. If you need more– oh,
sorry, paying off mortgage versus purchasing
a rental property. Good question. This is the ultimate–
you know, should you pay off a mortgage versus
purchasing a rental property? Now I would assume
what that person means is with this question,
your personal mortgage. And my personal answer
on that is it depends. Good one. Good, because it
really does depend. I mean, it really
depends on do you have leverage in that property? Do you have equity? How much is your payment? For instance, let’s just say
you have a mortgage that’s like $4,000 a month. And you bought a house
for like $1 million or something crazy, right? And does it make sense for you
to focus all your time, energy, and attention on paying off
your $1 million mortgage or would it be better
for you to take the cash that you have coming
into your life and buying a $40,000
rental property and then another $40,000 rental property? And then very
soon, those numbers are– you’ve got 10
properties, 15 properties. And that cash from
those rental properties covers your mortgage payment. So you can create
that passive income that’s now covering the million
dollar home that you bought. And then you can focus your
attention on taking that cash and just drilling it right into
your primary mortgage you want. A lot of times, you
have to remember that the primary
mortgage is probably your most desirable product
that you’ve got financially because it’s got a low
interest rate most likely. And that’s just something you
can kind of let burn and churn because you’ve agreed
to those terms. And you do want to
play the interest game. We talk a lot about
paying it down. And you want to do
that slowly but surely and beat the interest game. But if you think you can do
better in a rental market where you’re making 11%,
12%, 13% back on your money, you don’t want to wait to
get started building up your investment when you’ve got
your primary home that, again, it’s a pretty good
product, most likely. Here’s another question. How did you choose
your first property and then how did you move on
to your second and your third? I chose my first property
by flying in and meeting with a distressed realtor. Well, he wasn’t distressed. –he was, like,
commenting on forums. Like, he was looking
to work with investors. Yeah, in Michigan,
he specialized in sort of foreclosures
and short sales. And that was his specialty so. I contacted him, flew in,
and ended up looking at like, I don’t know, a
lot of properties. But at the end of the day, I
didn’t even need to go there. Well, I did, I guess,
because I didn’t have a team. So at the time, I was
sort of still setting up my team, my contracting
team, all of those pieces. I didn’t have any of that. So when I was
starting, I was just kind of trying to piece
all this together. And I overpaid for
the properties. I paid too much. You know, I paid more
than I should have. Not by that much, though. This guy did right by you. He actually was used to
working with investors. I guess I spent too
much on the rehab. I over-upgraded. I shouldn’t have– did,
like, hardwood floors. You know, I think I went
above and beyond on the rehab when I probably didn’t need to. Yeah, we used a
friend’s brother. And he’s a great
contractor, but– That’s how we– But I ended up, like,
over-upgrading the kitchen. I actually put in appliances
and I didn’t need to do that. Most of our properties, we
don’t even provide appliances and I put in all
brand new appliances and washer and dryer. And so learning curves, right? And then– He did a really
good job, but he– I don’t think he
had a team, did he? No, he did it solo. Yeah, he might
have subcontracted out the floor redoing. But other than that, you know. And then from there,
we started to see it. We saw that the cash
flow was coming in. And for us, it was a no brainer. It was like, OK. I guess it’s the mental thing. Once you see that first
rent check come in, and it’s like, OK, now
I see how it works. Right, that first
rent check comes in. And there’s no parade. You know, there’s not
like kids running around with balloons going, you
got your first check! It’s kind of like, this is
what the smart investors know. This is how it works. You start getting rent
checks in a rental property if it’s done properly. And so rent checks
started showing up. And we said, well, let’s
start replicating that. Yeah. Let’s buy a second. That’s good. Let’s buy a third. Let’s buy a fourth. And we started to build that. That’s how we came up with the
freedom number and so forth. So one thing I would suggest is
here in the link in this video, if you’re interested in sort
of expanding and taking action on your rental portfolio
and getting funding, we actually just
started a new process getting business lines of
credit with 0% interest. And it basically uses
business credit cards. So it’s not against
your personal credit. And we just started going
through this process and it’s been fantastic so far. On my web site, on
morrisinvest.com/funding– so the link is right
here in this post, morrisinvest.com/funding. Go there. Check it out and get
on the phone with them and see if it’s a fit for you. But I think you can
be approved for up to like 50, up to like
$250,000 to $300,000, which could let you pick up
six, seven rental properties. But you just have
to get really used to understanding
the terms of money. There are so many
different ways to get money and you have to just know,
like, what’s the terms? What’s the time limit,
the interest rate? You know, is it amortized? Like, just get really used to
evaluating financial products because that will serve you not
only in your investment life, but also in your
personal life too. Right, right. So like I said, there
are lots of ways. And then finally, last question. HELOC versus a cash
out refinance– well, we’ve talked about
the home equity line of credit, which we love. A cash out
refinance– basically, they’re going to look at
the value of your property and they’re going to give
you a lump payment based on the equity in the property
and the value of that property. I don’t know, I’m a bigger
fan of the home equity line of credit if you can get it. And the refinance is
an expensive product, though, because a lot of times,
they charge you about $5,000 to do that. To do the cash out refinance. To do the– yeah. And then they add that to
the value of your loan. So say you owe $1,000 and you– $100,000 and you’re refinancing
and it costs $5,000 to do it. Your new loan balance is
$105,000 because they just added that to the value. They don’t always,
but it tends to be a pretty expensive product. So– There you go. Yeah, look into that. Some people are desperate. Some banks are desperate
to do it for you now. So they might do it for cheaper. But I can’t– they’re going
to get their money out of you in some form or fashion. Whereas the home
equity line of credit, they intend to make their
money on interest rates. And we have paid– the bank that we use charge
us $70 for that closing. Like, literally, we
bring a check for $70 to do that, which is great. Love it. Love the home equity
line of credit. Raheem is in the building. All right, Raheem. Welcome. Thank you so much. Here in this building? In this building. He got here the
last second, but you can watch the replay if you– I don’t think he did because
we still got a snow storm. Raheem, are you in the building? We still got the snowstorm. It’s not letting up. We’ve got about 10
inches right now outside and the kids are
off school today. So yeah. So we got to get
out shoveling soon. Well, some of us do. While you’re sitting
back with the baby, I’ll be out shoveling. Raheem– I think Raheem has just
getting started taking action in real estate investing. And I’m so thrilled. I know he’s been over I think
on our YouTube channel checking out our YouTube videos. We publish our
videos three times a week over on our
YouTube channel. We’ve got some great
content over there that we’ve been trying to– basically, any
question that kind of comes in, I’ll try to
build a video around it and try to answer it
as deeply as possible and try to build, like, an
encyclopedia for real estate investors to kind of go out
there and take action and get started. And I know Raheem,
you also I think did the freedom cheat sheet. I saw your response to that. So thank you so much for doing
that, and hopefully that helped you get your head
around taking action in real estate investing. Work. Thanks, guys. Any questions you have
you can continue here in the comment thread. We will jump into the comment
thread throughout the day and answer them. And we’ll see you back here. We’re going to try to do these
pretty regularly now, right? Are you asking or telling me? I always have to twist her arm. Because really, he’s telling me. Even though– like, she’ll
put stuff in my calendar. And it’s like, you know
you’ve got this dance class with your little girl. You’ve got to take her there. You’ve got to go to this
doctor’s appointment. This is insane. This is the one thing I put
in her calendar, you know, every week. And she’s like, I
didn’t know about that. I didn’t know about that. So anyway– All right, have a
good one, everybody. Love you all. Go out there, take action, and
become a real estate investor. We’ll see you next
time, everyone. Have a good one.

54 thoughts on “Exponentially Grow Real Estate Portfolio | Morris Invest Live

  1. NY!

  2. Aww I missed this.

  3. Hi Clayton, it was a great podcast. Tell me please are you guys also offer owner finance or any other way of creative financing when dealing with your byers? thanks in advance. Alex.

  4. how can I get the business credit card in Texas???

  5. Just bought a 11 unit complex!

  6. Being an out-of-state investor, do you ever have to fly out to the properties you own to handle any problems or business issues? I feel that if this is the case it would make me reconsider investing in my backyard even if it is lower ROI than say, the midwest.

  7. What property management company do you use in Indiana?

  8. Saurel Lafume from Haines city florida

  9. love to hear your thoughts on real estate prices and investing in Canada. The market here is crazy hot… hard to find properties that cash flow.

  10. I have collected several 401ks at different jobs over the years. Is the $50k limit the total I can borrow from all my 401ks per year or could I borrow $50k each from 3 different 401ks?

  11. why do they invest for other people instead of buying the houses themselfs?

  12. Thank you so much, Morris Invest. You guys have inspired me so much so I started the "business line credit" process on 4/3/17. Looking forward to the result. Again thank you, for being who you are

  13. you guys ROCK!!! I'm going to call you right damn now.

  14. Hello… How many units do you currently hold? And how many have you sold in any given year?

    Thank you

  15. why not just get a heloc on all the properties. it seems like a better snowball effect than the cash out refi. is there a limit on how many helps you can do?

  16. You guys are so passive aggressive to each other. lol! But Great content, enjoyed the vid. I'm a new subscriber out here in California and had pretty much given up on the concept that rental property investments made sense for anyone except the wealthy. (I.e, 2 bedroom home goes for $200k or more in my area). This is interesting to think about. Been exploring the Dallas area craigslist and thinking about how to make this work. Thanks so much for opening my eyes

  17. You are helping lives. I appreciate your work.

  18. What's your advice on taking a zero interest line of business credit? How does your lender make money off that?

  19. b

  20. A light bulb just went off. I have 2 propertied I own free and clear. And I havebeen racking my brain on how to get funds to get more. I am going to look into the heloc route.

  21. hey can you make a video on section 8 housing

  22. Appreciate the conflicting points of view on pocket sales halfway through. My main takeaway is make sure everyone involved signs off if you are doing one and that they understand what they are signing.

  23. How do you notify folks of a live video coming up? I'd prefer not to use facebook. Do you send that out in your email blasts? I don't want to miss the latest & greatest. Would love to interact & send my questions lives.

  24. Can you get these HELOC's etc if your credit is bad? I am paying off a Chapter 13 bankruptcy.

  25. Oh, you're married? I thought she was your daughter.

  26. You guys are funny.

  27. Does one need to make a new LLC for each investment property you own?

  28. Nobody is moving during Christmas when all the money is tied up in gifts and traveling.

  29. Can I talk to you Clayton? Last time I booked a call I talked to one of your clueless employees.

  30. I am a potentially new investor. I am researching how to do this legally and with profit for my family. I need to know if I use a HELOC. The money from rent goes where? I understand that I have to put my paycheck into the HELOC. Pay myself, put 40% for taxes and potentially being empty, but what else?

  31. Where do you sell rental properties can I get a link? Also what is your ball park sale price?

  32. You should be full disclosure with these people about the 401k loan…. Unless they already don't pay taxes due to enough, proper right offs, saying that you're paying yourself interest is a myth. Simply put, you put $ into a 401k(pre tax) then you take a loan, when you pay it back(to yourself) whatever the percentage is for your plan rules say 4%, it's payed back with after tax dollars….. say 20%…..(and that's generous)
    loan payback dollars taxed at, 20%… 4% interest dollars also taxed at 20%before it goes back to the 401k.
    I know, I know, you say but if i got a loan, i would have to pay it back with interest to the bank with after tax dollars you say…..
    Here's the kicker! When you take the money out in retirement(or next time cause it's such a good deal) .. Guess what, you get to take it out again, only this time is after tax, use the same number… 20%. You put it in pre-tax, took it out and payed taxes on the money you're putting back to replace the loan plus interest that you'll be taxed on when taken out again…..
    That my friend its just telling the government that you aren't being taxed enough…..Double taxation my friends!
    I just feel that people shouldn't just rush to borrow from the 401k unless it's truly for investing….. Something that could reduce their tax liabilities.
    No harm intended here…. Just saying.

  33. Hey Clayton what states do you invest in besides Indiana? Great videos.

  34. Byron Illinois

  35. I really don’t like that they try to convince us not to get 30 years fixed loan. And the reason because his company wants cash only offer to buy his property is very misleading . I would say if you can get 39 year fixed mortgage now. Do it!

  36. How easy is it to get a HELOC or Refi on a LLC owned property?

  37. Great channel! Question: You mentioned one of your tenants left an entertainment unit and some trash behind that you had to dispose of, which cost you money. Do you take that cost out from your tenant's security deposit?

  38. Feb 2018 from Atlanta suburbs…

  39. 18:10 is where the core topic actually starts

  40. What ethnicity is your wife? Looks half Asian.

  41. I can't believe Nat said "and whatnot" at 23:30. DUH!

  42. Hi guyz

  43. No idea why we have to listen for 10 minutes of crap at the beginning of every video

  44. Hi Clayton, as always I love your You tubes with all of the informative information.
    Just so you know, your links below the video do not work. In regards to the source you support for business funding; I see there is a cost of 9%. Plus the $3499(not sure exact no.). What is the 9% for and I did not see it listed but I know that there is also a fee to have the credit card amount transferred from Credit card to cash which is 3% for each transactions. Why so many fees?

  45. Hi Clayton, thanks I really enjoyed this you tube with all the information.  I am working on a deal in Va. right now for one of my investment groups and it is a 6 unit apartment building.  Can you recommend a good insurance company to use or a agent with good competitive rates.  I am definitely interested in working with you on turnkey and will do so once I have wrapped up this apartment building.  Tracy

  46. Great video
    I have a question.
    Is having a property manager worth the 10% fee plus a months rent to find the tenant?
    How many doors would you have before hiring a management co.?
    I have one rental now and about to get a dueplex putting me at 3 doors and will keep expanding from there.
    Im just wondering if you would recommend doing it once on your own to learn what to expect. or just start with a management team and focus on finding the deals and Rehabing and financing?

  47. From Fl looking to get into buying rentals and I'm loving you channel. You guys are awesome

  48. Where do you get a HELOC on a 2nd property or a property in an LLC?

  49. Does the homeowners insurance company charge the same price on a home if its used for rentals or for your personal residence? How does converting a home into a multi-unit effect the insurance cost? What about adding small outside buildings (sheds)?

  50. Hi Morris invest, I been following you in your video thank you for sharing. At this time I have started three moths ago one of the I bought it using a conventional loan and the second one using my Credit Card. I’m getting the 15 % ROÍ. I want to get 5 properties in 3 years. What would you do as the next step?

    Thank you so much
    Freedom is my target:)

  51. You say you dont need to manage your property management team, but my understanding is there are a lot of property management companies out there who will take advantage of you. They bill you for and say they fixed things that dont actually need fixing etc. So in that way you need to manage them. Wouldn't you agree? How do you recomend hanging those issues?

  52. I have a consult scheduled for next Monday. A question about HELOC; say you own two 50k properties, can you take out a combined 80k HELOC?

  53. You are brilliant!

  54. Do you know your math? Real Estate can't be grown exponentially in reality. It only grow exponentially in pyramid scheme.

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