How to Find Cheap Houses to Buy

we all get over there okay all right how to find off market cheap properties so that you can rent them out and start to produce cashflow that's today's episode let's dive into it hey everyone I'm Clayton Morris long time real estate investor and investing in real estate for a very long time and build up enough passive income and find cash flow in order to achieve financial freedom and now when I help you do the same thing so if you are watching this show today that's what today is all about and we're gonna talk about finding those off market properties finding those deals that allow us to create some nice little equity position but really get that cash flow going and that's what today's show is all about so grab a piece of paper and a pen I'm gonna walk you through some very specific ways that I have over the years found some great off market properties so let's dive into it okay then we're gonna open this up to Q&A a little bit later in the show so stick around for that but what I want to talk about first is the most obvious way so we all kind of start with working with a realtor okay that is the most obvious way no I don't have anything against Realtors I love Realtors my wife's a realtor my dad is a realtor I know a lot of Realtors and I'm sure we have a lot of Realtors who are watching this show listening to this show as well now the problem with Realtors is that they very often just focus on the expensive retail property that's the one that you can get the really nice photos of you can get those 360-degree you know photography drones or whatever they put inside the house you can have like a nice little walkthrough you can have a drone fly over the house you can stage the house with a nice kitchen table and flowers and paintings on the wall Realtors love to be able to show houses like that and sell properties retail to a retail buyer okay but that's not what we want now if you're gonna work with a realtor which is I'm saying first stop on this on this train here okay first stop on this train is to find maybe a realtor who you can work with in your area to bring you great properties now this takes a lot of work because like I said most Realtors don't work with investors they don't want to have anything to do with us as an and it's not because they don't like us it's because they don't know what they're talking about and if they don't know the difference between an investor market and a retail market they're clearly focused on the retail market those Saturday and Sunday showings where they put balloons out on a sign and the house looks perfect it's immaculate that's what they're focused on okay and they work with a retail buyer it is hard to find a realtor that understands investors now when I was doing some you know a lot of wholesaling and flips in New Jersey over a decade ago I would what I did was I went to a realtor database okay which you can find there's plenty of them out there and I I think it was like three thousand realtors in my area and guess what I did I started calling them picking up the phone and calling as many of them as possible and I put together a little script now you might want to copy this script right here hey and insert your own name don't use Clayton hey it's Clayton I live in the area and was interested in buying some rental properties in the area I'm an investor looking to acquire properties for my portfolio do you work with investors on a regular basis as an agent or do you mostly focus on the retail market so you're gonna find out right away in that first question well you know where that Realtors head is that are they focused on the retail buyer with balloons on a weekend weekend showing great if that's their bag great and you'll be able to quickly tell if they're kind of desperate too right because they might say to you something like yeah I mostly do retail but I would really like to work with investors okay that's great and maybe they can bring you some great properties but currently they don't know your space at all now the problem with working with someone like that who is eager like that it's great it might be a great guy might be a great woman but they're gonna start sending you properties that just are not fit for you they're gonna be overpriced they're gonna be properties that are probably currently listed on the Multiple Listing Service they're probably all over Zillow they're overpriced right if a property is sitting on Zillow or one of these websites right one of these retail websites then I don't buy it okay that means it's probably going to be priced too high it's probably going to be priced out of you market for becoming an investor those properties that sit on the Multiple Listing Service are there for a reason okay investors will snap up great properties before they ever hit that service now that's not to say I don't buy stuff off the Multiple Listing Service I certainly do but you've got to find the right deals okay the stuff that I buy off the Multiple Listing Service needs value so when I'm working with a realtor I want them to bring me properties that I can add value to them okay so when you're talking to these Realtors that you're making these connections with maybe at the local meetups in your town talk to them about properties that you can add value to if the property after you've repaired it is worth $70,000 and you can get it for thirty or forty thousand dollars and you're gonna put twenty into it twenty five thousand dollars of rehab into the property then you're gonna be at or a little bit below the market value and you're gonna have a little bit of equity which is not why I invest but you're not gonna be paying twenty thousand more than the market often times what you'll notice is when properties are sitting on the Multiple Listing Service that Realtors use let's say it's an as is sale okay and it needs $20,000 worth of work and it's worth seventy and they're selling it for 69 or they're selling it for seventy but it's worth seventy and you still need to put twenty thousand dollars worth of work into it new windows furnace water heater roof all of that that's ridiculous so that's typically the type of a property that you're gonna get from a realtor now why did I bring up Realtors as the first stop on this train well because there are Realtors who will work with investors these are the gems okay now I work with a few Realtors in different markets and they are great because they understand investors they understand that they're not ashamed to show me this crappy property that you know needs thirty thousand dollars worth of work into it I'm not scared off by that so the properties that I just bought last week I have to do work on them before they ever go out to our investors at Morris and vasiliy they're not going to get that property I'm gonna do the work on it right we're gonna put the team on it to con tractors to go in and actually do the work now I'm paying way less for that property so if you can find Realtors that can provide you off market properties that are that need value-added to those properties that's a gem ok another little caveat here about working with Realtors write this down write this down when you get on the phone with Realtors ask them if they occasionally come across what are known as pocket listings now I've gotten a lot of great deals from pocket listings what are pocket listings well this could be a person that has inherited a property it's a piece of garbage they don't know what to do with it they call up the local real estate office they say look my mom passed away we inherited this property it's a disaster I don't want to list it you know for showings on a weekend because it needs a ton of work can you guys do you have anybody that could would want to buy this property internally you know at the real estate office and Realtors will get those deals a lot now what do I mean by pocket well they kind of have them in their pocket they're not listed on the Multiple Listing Service they're not out there publicly basically they kind of shop them around in the office and very often they're gonna have investors they're gonna snap that property up they know they're gonna have to put 40k of work into it that is a pocket listing it's never made itself to the Multiple Listing Service I found great deals over the years I just had someone bring me a four-plex that was a pocket listing the guy didn't want to put it out there publicly there are a lot of reasons why a person would not want to put their house out there publicly all over Zillow and the Multiple Listing Service in those places because number one maybe they don't want someone walking through their house they don't want showings they live across the country and they can't arrange for showings they they have a child we actually had an example of a person who had an autistic child and they didn't want people coming to the house so they just gave it to the real estate office as a pocket listing they never put it out publicly no showings no balloons no walkthroughs there's a lot of reasons why people wouldn't want to list their house publicly so again first stop Realtors okay find a gem of a realtor in an area where you want to invest and then try to work with them okay now they're only gonna be able to provide you properties they're not going to have all of the extra things contractors property management all those other pieces that's on you but the first stop is working with Realtors if you can and find a good one all right next up is a strategy that I've used for years I've spent oh boy I probably spent hundreds of thousands of dollars on direct mail now I don't know how many of you watching listening right now I've ever gotten a piece of mail from someone sent to them usually it's a wholesaler who has no intention of actually buying your house they don't have the money but they're sending you a letter in the mail okay they're sending you a piece of mail that says I am an investor I buy houses I would like to buy your house okay now if you're an investor you've probably received these letters and as an investor those are not the necessarily the people that I would want to target right because you know the game and you're not gonna sell me an under priced house right because you're smart you're an investor so what I want to target with direct mail is I want to go to a website called list source that's the website that we use and you want to pull up different criteria for the areas that you want to invest in so let's say San Diego is where you want to invest I think you'd be crazy to do it but there are people to do it a friend of my spends hundreds of thousands of dollars a year doing direct mail in San Diego because he's a wholesaler and he lives there so this is his business and he will target people with high equity in the property so in list source you can look for as criteria people that basically have full ownership of their property they have a hundred percent equity in their property that could be they've owned it for fifty years it's been handed down to their children and the children don't want it because they live across the country there are any number of reasons why someone doesn't want a house okay there's a lot of people that get into this investing game they're like why would anyone want to sell their house for a discount really don't ever ask that question it's a ridiculously dumb question think about it think about how many people you know just in your circle of influence who would maybe have a you know a life-altering situation that they have to sell their house quickly motivation comes in all different forms and fashions you might have to move across the world for something in a pinch because your boss needs you to do it and you need to fire sale your house you may have inherited a property the very first property I ever bought was off market it was by a family that inherited the property next door to me in Orlando Florida I lived in a one-bedroom condo on a golf course the woman who lived next door to me lived in a two-bedroom condo on the Golf Course she smoked she lived there for 30 years and she passed away I never saw her but they the family was embarrassed by the house it was covered in nicotine all over the walls the cabinets had nicotine all over the cabinets it smelled wreaked of smoke and they didn't want to list that with a realtor because the realtor told doesn't understand investing told them look you're gonna have to spend fifteen twenty thousand just to get this house up to up to speed before I'll show it you know and so they didn't want to do that so it was really kind of held as a pocket listing I live next door I saw them I said you know what I'll buy it so I went in spent my nights over there ripping out drywall paint in cabinets putting in you know new carpeting I've cleaned out the furnace it looked like a brand new place when I was done with it then I did all the work myself that was my first experience buying this sort of off-market property but again coming back to the motivation this person didn't want to keep that house they didn't want people doing showings cuz it just was frankly it was crummy was covered in nicotine it was nasty so there's a lot of reasons why someone wouldn't want to sell their house you know publicly like that or have showings so just when you're that question pops into your head get rid of it because houses like this are bought and sold all day long perhaps you're finding when you're sending out this direct mail via list source you're finding that you know you have a tired landlord so maybe this person owns five rental properties they made the mistake of managing them themselves so they had to deal with tenants their whole lives which I'll never do right I have a property management company but tired landlords I bought so many properties from tired landlords that just kind of you know we're in their 70s and they're just kind of sick of it right they made their money they made their cash flow they they just decided you know what I'm just gonna sell the properties now so and you know what they get your piece of Direct Mail the mail and they're like you know what I've been thinking about selling these things and I'm gonna give this Clayton a call and that's what happens so if you send out you know 200 pieces of mail expect you know to have one or two deals as a result of it honestly finding people with equity and their properties sending them postcards and letting them know that you're interested in buying their house so now if you actually are a cash buyer and you're gonna buy their house it's way more powerful than being a wholesaler who's then gonna sort of just assign that contract to somebody else but remember that using that off market strategy to find properties and using Direct Mail as a killer way to do it another way to do it is there for sale by owner section I've done a lot of deals in the state of New Jersey over the years just in the for sale by owners section of Craigslist you can go on Craigslist and there's gonna be a lot of investors in there so you have to sift through it but are you just start cold calling people making phone calls calling people trying to find deals if you're like a dog with a bone like I was when I wanted to create passive income and when I wanted to become a real estate investor I would make like a hundred phone calls a day I didn't care you know I was just on the phone non-stop finding deals my first two or three my first three deals that I ever did were from Craigslist in the for sale by owner section people list their house they they're embarrassed by it the one house I went by it needed it needed about seventy five thousand dollars worth of work it was an old house and it was like a hoarder house you know where they have like newspaper stacked everywhere and it was a total mess just had a dumpster we're gonna use a dumpster fill up the entire dumpster to trash out the house now you can understand why that person would be probably motivated to sell their house and not call up a realtor you imagine a realtor walking over with us like you know a nice suit and tie and a clipboard like oh my god this is the house I'm a realtor I I'm not gonna be able to sell this house I'm not gonna do an open house here you know there's no way so there's all kinds of motivation for that so the first sale by owner section that's where I found that particular property again these are some great strategies for finding off market properties like I say once the property hits the internet and it's on one of those websites then it's going to be over priced too many people have had their hand in it okay too many people have already maybe tried to add value to the property they've done the renovations they've or they haven't done the renovations but there's too many people making money off of it and when you know if a realtor is listing a property that means a realtor is also getting paid in the process so the the benefit of finding these off market properties is is enormous for you as an investor one of the ways again the tired landlord solution because of our Direct Mail because of just how big we are as a company we'll have people who bring us deals so like the package of ten properties that we're buying you know we know we have to put in about thirty thousand dollars worth of work into each of the ten properties so we're able to command a lower price on picking up that to those ten houses because we have to put a furnace and water heater that one needs a roof those that one needs windows that one needs new cabinets all of these little cookie cutter pieces because we've gotten larger we're able to code you know command those prices another killer strategy for you I'm sure many of you drive around your neighborhood on a regular basis and you see a vacant house okay I love vacant houses vacant houses to me have become you know that was always one of my favorite things to do and it was when I new jersey and flipping houses I loved finding these houses I would literally find a vacant house and I would then look up on the public recorders office find out who owns it it's easy right and then just send that person a letter typically they're out of state out of market there's all sorts of different services that will let you even you know track them down if you wanted to go that route but a great strategy is to simply send that house a letter when you send that house a letter it will be forwarded on to the owner of that house and very often it's someone who just left the house go they couldn't afford to pay the taxes so that's common in like the state of New Jersey for instance one of my best deals I ever did was a property where I made forty three thousand dollars on this house flipping this house I found this house it had high grass and it was in a great and it was in a pretty good good neighborhood that I would frequent and I just put out a piece of paper like a sticky note wrote hi I'm plate and I'm interested in buying your house and here's my phone number slapped it right on the door wouldn't you know it I get a phone call the next day from the the guy who who inherited the property he had stopped by to pick up some mail he called me and said you know yeah I've been thinking about getting rid of this house I don't wanna I don't have the money to put into it again motivation so what did I do made a deal and we ended up doing a fantastic deal on that house so there you go there are some key ways to find off market properties it does it's not rocket science but there are people out there who constantly are looking to sell their properties and their investors who constantly want to buy them now this is the first stop on this train okay it's finding the deals you can also work with you know you work at you work with companies like mine where we will then you know put in contractors and actually do the work on the house and then set it up with a proper property management company so that it's managed properly so if you're living remotely that's certainly something hard to do in areas where the cash flow and the ROI is high but if you're you know you you might live in an area where there might be a great neighborhood that you would want to target so these are some areas you can even just start small and try to do some of these strategy even on a small level maybe sending out some mail maybe kind of looking up for vacant houses what's known as driving for dollars around your neighborhoods and finding these things and just seeing you know what's the status you'll find that the neighbors will also know the vacant houses you can knock on the neighbor's door and say what's going on here at this house how long has it been vacant Oh she moved out two years ago or sadly she passed away last year and the family doesn't know what to do with the house oh do you have their phone number and that's how you make a deal happen you know so there you go some off-market ways to find properties I hope you found this useful now I'm gonna open up to some question and answer I hope we get some good stuff going on today Oh Lindsey wants to know hey can we do a recap for late comers by the way you can watch this show you can if you missed it live you can watch the replay we'll be able to play it but yeah just mentioning recapping here working with Realtors finding a realtor in your area that you want to invest in that Stan's investors okay that understands the value of finding like an off-market property or ones that need value adds to it meaning you're gonna put twenty or thirty thousand dollars worth of work into the property on your own you're gonna hire your own contractor you're gonna go through all those things it's hard to find a realtor that can do that but I'm sure they're out there and I've certainly found them over the years so try to pair up with a realtor next thing is sending out some direct mail you can go to list source calm you can punch in all sorts of criteria for neighborhoods you can blast out and spend a few thousand dollars on some direct mail to find an off-market property that's what my company does we spent a lot of money on direct mail to find those little gems that were able to to renovate and get up to speed and place a tenant in there for our clients we do a lot of that we also have once you sort of start making those connections in real estate meetups and so forth people are gonna start bringing deals to you and that's that's a fantastic strategy because you don't have to spend much money at all right then they can bring deals to you another thing is that for sale by owner section on Craigslist or other websites look for you know you have to sift through a lot of investors because a lot of people are just selling their crap on there that I would stay away from but you can certainly find some gems from actual homeowners who just want to you know let go of a property that they have another strategy is vacant houses driving for dollars like looking for properties in neighborhoods where you can tell that they're not lived in right there's newspapers piled up there's a lot of notices tucked in the door there's high grass there's snow that hasn't been shoveled key indicators of a vacant house certainly in New Jersey I would drive around during the winter I'd be out there in snow storms and you can see houses I remember driving down to was it Linden New Jersey Linden New Jersey in a snowstorm looking for properties and found two great deals that I ended up doing like a lot of work on but that's where you can find these great deals using some of these strategies and this is just kind of cracking the surface so I hope that you found that helpful all right just to do so let's jump into some questions and answers here how to get a house brand owned wants to know how to get a house financed well there are a lot of construction loans out there and that's hard I mean what I would recommend when we have like for instance we have clients that come to us at morris invest we work with them on the bir strategy which is the buy renovate refinance repeat so what we do is we bought will buy the house will renovate the house and then the client you know buys it from us renovated with tenant in place and now the bank's love that so you've brought cash up and you bought the property now you're able to cash that money back out rinse and repeat so banks look favorably upon the house being renovated banks will not really you know finance houses that that need renovation that's where you have to kind of work on private money and those sorts of strategies we have a whole series of videos right here on our private money series so check that out from beginning the end we walked you through how to get private money we have a lot of investors that work with us that that you know use private money in order to purchase properties with us - can I use a FHA 203k loan for vacant houses jazzy I'm not sure about that on a vacant house I think with an f8 it depends if they can't can mean a couple of things right if it's vacant vacant and needs work or just vacant I certainly bought vacant houses that needed like you know four thousand dollars worth of work which is not much but then there's vacant houses that I've bought that are really vacant where there's a hole in the roof and there's no doors and I need to put $40,000 worth of work into the house so a couple of different things there that you need to take into consideration George Ryan one so what about going international for great deals you know I think America is the number one rental market in the country in the world that's why we have so many investors we have a we just had a Canadian investor reach out to us over the weekend wants to buy properties with us we have Australian investors Chinese investors who buy a lot of properties from us we had one Chinese investor recently who bought 10 properties with us because this is the best place that you have the tax benefits of owning real estate in America just eclipses every one also the ROI the cash return on investment you know one of our Australian investors that buys properties with us he's like the same house that I buy it with you is you know a thousand square feet three bedroom one bath he's like here it costs over three hundred thousand to buy that same house and the same is true of California for instance I mean so I think America still great markets still better than any any place else I can't think of a better market honestly you know look at Portugal for instance right incredibly cheap to go there and visit like $3 for a bottle of wine amazing food right but they're real estates still expensive so again I think America is still the best place to invest without a doubt Colt cannon how do you identify good markets like San Diego versus Austin versus Salt Lake City Colt we're actually gonna do a full video on the best rental markets now we've done it a few years ago and actually it still holds up really really well because it's areas that I still invest and my companies does in Michigan Indiana I'm still you know in parts of Texas and in Pennsylvania where I buy but my main main market my favorite market is Michigan let's see Dave and Ryder you said you don't have much money in the stock market what did you do with your 401ks in the IRAs well boy have you watched our self-directed video series holy smokes if you haven't watched it please do because now is the time given everything that's happening the stock market we've been monitoring what's happening the stock market today it's down another 300 points it might be even lower at this point maybe can someone get me an update on that by the way I want to check here but yeah we transferred all of our money into our self-directed IRAs so we use a company sent sense financial super cheap but our if you got to watch our self-directed IRA series so since financial will do your self-directed accounts like it's like pennies to set up an account and then you fully control what you're investing in watch last week's episode where we had Haley from my team on Haley was live on our live show last week you've got to check out that episode please drop that into the chat thread right now if you can Kelly I appreciate it we had an amazing time she walked through she helps our clients all the time like you know checking setting up their their self-directed iras and what to do you're moving it from the stock market putting it into performing assets like real estate you can buy a business you can lend money out on private notes you can't do that if you've got your money like with Wells Fargo or fidelity those types of places they're making money off you and they don't want you to do that you should be in control of your money checkbook IRAs let's see what's happening on the stock market boy yeah IBM drops 7% we're down so it's down about 200 points right now yeah and it looks like we're gonna see another rate increase by the end of the year so yeah that's what's happening the market okay more questions anything we want to talk about today do you offer multi-family homes Paul Matua we do occasionally our focus is single family homes occasionally we get a duplex in will do a duplex or a quad Plex they're rare but when we get duplexes in yeah we sell them pretty quickly and jellow Lozano wants to know hey Clayton what's your latest book recommendation let's see what's a great book that I just read actually I don't know how how many of you watching right now this is kind of a little woowoo topic for this for this live show at the moment but I am I'll I'll be totally honest with you I'm a bit of an empath what does that mean that means that I sort of tap into people's energy we all have these different abilities right I when I walk into a room I can tell that that person over there is upset and I immediately take it on so as an empath as a person who has these these energies I read Christian Northrup's great great book called dodging energy vampires and it's kind of appropriate for October Halloween time but she's a great author she's an incredible doctor but her book it really teaches this well I think we all have people in our lives that maybe suck energy from you people that kind of use you you think that you're you know they're your friend but they're not really your friend they always it was kind of use you anyway the book dot dodging energy vampires by Christian Northrop it so it's a quick read it's really really good even if you're not an empath and that kind of stuff doesn't bother you I think it really helps you understand relationships too it really can help you understand business relationships hey who is constantly taking from you but never really gives back at all so it's really helpful to kind of cut these people out of your life you're gonna feel so much better once you do that and oh it's transformative really really great book I would highly recommend anyone reading that book let's see so Chauhan oak wants to know what about florida yeah we do some stuff we had to put a pause on some business we were doing in in florida we had some insurance issues and we have the hurricane issues florida is a great market and like Jacksonville where I've owned a bunch of properties but you know when you're about you've got properties and then suddenly there's like the threat of a tropical storm even though we're I invest well has no problems with tropical storms because it's 20 miles inland you know it's not they don't historically have ever had a problem still insurance doesn't like to buy in coverage and they wait like a few weeks well for us that holds up closings and that's a pain in the butt so when we put a pause there for a little bit Thomas Reynolds says about to buy a 200k property in Houston gonna live there for tears and turn it into a rental should I pay down a lot or leverage more okay Thomas let's dive into this question now I got a lot of questions for you Thomas you got about to buy a 200k property in Houston okay is it a single-family or is it a duplex what is it you're gonna live in it and you're gonna rent it out how are you gonna do that my rule for investing is you never want to buy a property for more than one hundred and fifty thousand dollars if it's a single family property if you spend more than 150 thousand dollars on a single-family residential property the rent does not keep up with the value the property okay so now that's different if it's like a multi-family right because the numbers are a little different so if it's a duplex Thomas and you're gonna live in one side of the duplex and you're gonna rent out the other side great that's called house hacking and let them pay for your mortgage and then I would you know refinance that house when you can pull out some equity and buy another property but if that's a single-family house and somehow you're renting it out to somebody in a room or something I'd be curious how you're doing that rob young wants to know best recommendation for financing under fifty five thousand honestly work with some private lenders there's so much private money out there man holy smokes there's billions of dollars out there right now people want to be in real estate it's the number one it's one of the best ways to build wealth it's one of the safest investments for a long time real estate and for for wealthy individuals it's a great tax shelter so just work with private money so much private money out there watch my private money series on YouTube we've got a whole video series that walks you through how to do that Julio wants to know what your favorite zip codes are in Michigan no too many damn name here but I you know I love Inkster I love Detroit I love Harper woods where I buy a lot of properties that's what my company does so I was just there last week walking through we walked through about 50 of our properties drywall ripped out guys mud in the ceiling you know bathrooms being installed new roofs being laid windows being I love that stuff because I love seeing our team do great work so I loved a lot of those zip codes up there foody unloaded once - do you ever buy from auctions or sheriff's sales oh yeah I bought I I bought my very first property was uh through a sheriff sale done no short sale and then the other one was a sheriff sale so yes they're hard to do I mean you've got to have some skin in the game so when you you know you're gonna jump into that stuff right away you got to be careful because a lot of times you're not going to get a chance to I don't know dive into some of the details on the property auctions like you know a lot of auctions can be tricky you gotta bring sir if I'd checks you've got to show up at the county courthouse steps and all that kind of stuff so you can find some great properties but in this really tight market right now where everyone's looking for deals you're gonna be there with guys that are buying 15 properties at one time so if you walk in there not knowing what you're doing it's you know and you're wondering why that one house no one bought it you know when you're like oh there's one left great I'll buy it it's probably for a reason right so you just got to got to be savvy about that kind of stuff let's see Adam X i just opened a 90 k HELOC would you buy one property and pay down cash or multiple and have mortgages with 20% down i just opened a 90 k key lock would you buy one property paid cash or multiple and have mortgages with 20% down Adam I'm just not a fan of debt okay so if I could buy for like one of the houses I just bought last week it needed about seven thousand in work I bought it for sixty three thousand I'm putting about seven thousand dollars worth of work into it okay so you can be well below that ninety and be able to own a house free and clear so you know I'm not a big fan of debt but but I am a fan of leverage if you've done properly you just need to know that the properties you're purchasing if you're putting 20% down on each of them that they're gonna cash flow and that you're not gonna have to do much work on the property okay it better be fully renovated or you better have you better make sure that that property is gonna be cash flowing before you start doing that because then you're paying somebody else so I always like to buy things free and clear you know John Shaw and his great book it talks about getting that first property and get that first property free and clear man it's so great so the first two properties I ever bought I bought them free and clear then I can refinance them I can pull money out of them after I do some work on them and then or just let them appreciate a little bit you know like the houses I bought then in the 50s or now worth in the 90s okay so I can pull all of that equity out of those properties now just a few years later and roll that into some more properties owning it free and clear is so awesome if you can do it did you how do I feel about boarding homes I'm sure what would you mean by that Oh boarding homes like boarding houses you know senior centers fantastic absolutely fantastic Michael Robinson you mentioned you mentioned investing in Inkster was born and raised there I owned a few properties there as well who would have thought yeah we just got I think we have right now if you book a call with our team at morris invest i think we've just got two properties in in Inkster they might have already sold but if you booked a call with our team today on our website i think they need renovation but they're great I mean we we're working on a package there right now who does your cash out reef is I recommend working with local banks where your properties are located the local banks in those states in those cities tend to offer you competitive values they know the neighborhoods they're that they're likely to be a long-term partner with you well Deirdre deidre asks so pulling money out does not accumulate debt it does but because you now have equity in the property you're basically able to have an infinite return that's the power of an infinite return okay I'm gonna do a whole video on the infinite return real estate but imagine buying a property you value add the property and after a few years you know it's gay it appreciates because you value added the property and the neighborhoods doing great now you're able to pull out all of your money out of the property now you have an infinite return forget a 12% return now you have an infinite return because you have none of your money in the deal now infinite return on investment it's amazing that's the that's the gold that's the pot at the end of the rainbow did you Ricky says I live in New York City or I live in New York is it possible to have positive cash flow on a property without visiting the property of course Ricky almost every property I own I've never seen I've never seen almost every property I've ever bought okay you know I buy them I have great team that goes in rehab some places tenant send them with our property management I get rental I get paid checks every month okay from my tenants you got to pay your property taxes you have to get your insurance and you nurture your portfolio right you don't just like blindly look away I've done a whole video on the truth about passive income okay which is you need to nurture your portfolio but you don't have to go to your property absolutely not angel Ramirez just want to say thanks I bought a property from you guys in June and during the process everything went great thank you I hope I'm saying it right is it angel or I hope I'm saying that right Thank You angel appreciate that very very lovely hey maybe angel can you do a testimonial for us I never asked my team's like hey you got to ask some people to do testimonials I see arimin here as well he bought some properties as well I always loved you know just a little video saying hey thanks so much here's what our experience was it helps you know it helps I don't ever ask that I try to give away so much and people like you got to ask once in a while so I'm asking you angel if you wouldn't mind Brian do dish can you explain the be RRR process okay again I have a video a video for everything but check out my video on the on the Bur strategy and it's it's me in a winter coat gone BRR it's a great strategy by renovate refinance repeat ok that's the Bur strategy so you're buying a property as we talked about today with that that you can add value to it renovating it ok then you're pulling the cash back out from a refinance now you have very little money in the deal and you're rolling that into your next property I have a friend of mine his name is Abe he's an investor in New Jersey he started in the mid 90s he's older than me and he has over 3,000 doors now he owns three thousand properties he started with one which is how I started actually I started with two at the same time but a lot of you start with one he bought it he renovated it he pulled the cash out of it bought a second snowball tuned he was third fourth fifth he's a multi-millionaire I mean that's how you do it he never went to college most you know a lot of really smart real estate investors never wasted their money on $200,000 in college loan debt Robert what are your thoughts about Salt Lake City buying houses you know Robert people ask me all the time what about my market what about this area there are deals all over the place I'm gonna tell you though I don't invest in Utah that's not an area I'm familiar with I know there are deals to be had but I focus what I'm you know where I'm good at I can drive here in New Jersey and I can find like a small pocket of an area where I might consider investing but you know there's too many variables taxes are higher you know and it's also salt lake from what I understand to like there's some weird landlord law stuff that I'm not a fan of in saw in Utah as well so I like to go there's a lot of factors I look at in markets right is it landlord friendly meaning if someone's not paying my rent I want to know if I can get an eviction quickly guess what California I could take a year for you to get an eviction in California New York the same way which is why the key gentleman who asked about investing from New York that's why I don't invest in New York because of that it's not landlord friendly it's very favorable to the tenant which is great you want had tenants happy but they also know how to play the game so they stop paying rent I want them out of my property done you know I'm not the Grinch but I'm also not running a charity Julio yeah I work with a lot of different p.m. companies in Michigan I'll see we work with we work with Ron we work with Royal Rose we worked with marketplace we worked with I don't have the full list but there's a lot of them I mean because Detroit is such a widespread area there are so many there's so many you need to want find one that works for you do you guys invest in eastern PA like the Poconos area actually Georgia I actually have a house in that area and I love that area I love it because you know I grew up going up there skiing and so forth so I do in fact I'm looking to do more there actually looking to do a lot more in that area actually just bought some land now I'm looking to do a build on up there and looking on a big project that I was working on as well so I can't really go into details on it but yes I do like that area southwest Houston says I have about 150 K saved up and one of my a house that needs work with a 3-bedroom 2bath - two floor plan in West Houston or Sugar Land Texas but can't find anything under 200 or 300 thousand dollars should I wait and save more well my question to you would be why there again pay attention to what I'm saying don't buy a residential property for more than 150 thousand dollars don't buy a single-family property for more than one hundred and fifty thousand dollars if you do the rent will not keep up with the value of the property okay I'll reiterate this again but what do I mean by that if you bought the house for one hundred and fifty thousand dollars and it's renting for 1,500 a month okay and you thought well if I spent $200,000 on this house the house should rent for two two thousand dollars a month it doesn't happen the rent might go up to maybe sixteen fifty maybe fifteen fifty have you paid two hundred for it now what if you paid two hundred and fifty thousand for it well you think well I should probably run it for twenty five hundred a month right value keeping up with the cost it doesn't happen at over 150 thousand dollars rent values stop they just don't go up much higher and even when you get up to a million dollar house you're still probably only renting it for me thirty-five hundred a month like there's houses here in New Jersey that rent for about thirty five four thousand a month and the house is 1.2 million that's an idiot investment I'm not saying you're an idiot don't read me wrong I'm just saying that's not a smart investment the ROI is not there absolutely not there so I would just sit on that money let me see did Thomas Reynolds write me back he had that great question earlier trying to see if I can find it here man there's a lot of great questions here and I wanted to go back to Thomas he asked that question about about buying that house Pyrrha says I'm currently in the process of purchasing a home with you guys thank you for this opportunity I'm looking to get a second property is there a specific bank you recommend for a home equity line of credit again I think you have to shop around you know Natalie and I wrote a whole book on this subject how to how to pay off your mortgage in five years using a home equity line of credit so check out my book if you haven't we talked about some of the local banks and the different strategies in that book but I think local banks are really a way to go let's see sorry Thomas I'm trying to find your question if you followed up with me here that's where you could use the super chat if you wanted to if you hit the super chat then it'll publish the comment right there front and center so I'll never lose it domain I had a kitchen fire the contractor fixed it flips houses go figure would be doing business together soon so I asked and talked to people are opportunities come up that's great [Music] sorry guys I'm just trying to find some comments so you guys have some great ones here Jonah says I 40k in the bank if you can't buy a home in full is it better just to pay down 20% or invest as much as you can have available you know I think if you can remember as much equity as you have in the house the better off you are so if you can do that great Allentown PA George again I don't know much about Allentown I grew up in you know near Reading Pennsylvania I know there's some good areas you know again what I look for in an area too is I want to have consistency right I want to have consistency so I don't want just one property I want to be able to know that okay I've got a great contracting team I've got great property management team so I can rinse and repeat it's it's one thing to like kind of stumble into Allentown Pennsylvania and find a property but if you don't have a repeatable process in place then might as well be on the moon you know Allentown might as well be on the moon for all I care Alfredo how can I work with your team just go to our website Morris invest calm and just click on the book a call tab we'll jump on the phone for 30 minutes with you and figure out you know what's your you know sorry I'm seeing your question here Thomas will work with you it's very simple to do sorry so many great comments here Thomas okay single rents 1900 thank you for the super chat see the super chats here alright and thank you art of tracking for your super chat I really appreciate it so single it's a single house and it rents for nineteen hundred okay but I don't understand though you said you're gonna rent it out does that mean you're going to live in it with the people so help me understand that so anyway Tom let's go back to Thomas's question right he was saying was gonna buy this house I think for over two hundred thousand he was gonna rent it out he wanted to live in it and rent it out but it's a single-family house so how you gonna rent it out you gonna rent out a room in the house to someone sort of Airbnb style I say this hat this process works when you're living in a duplex right so you live on one side of it rent out the other side have that person then pay for your mortgage that's called a house hacking and that's a great strategy when you're starting out you know it's it's small its its small ball but it's a nice way to start out because they're paying your equity right you're building up equity in that house that you can pull money out of but my recommendation Thomas is if you're buying a single-family home and you're spending two hundred thousand on it why not buy three rental properties with that you know you could buy three rental properties right now call us you know that could cash flow nine hundred bucks a month eight fifty a month now you now you're making more than your 1900 a month and you don't have to live in the property so there's just different ways to skin this cat but I don't know I don't agree with the well unless you're living it in some weird way junior rich is I try to book a call and I got to the last step getting on the count of the button work what yes please reach out to us I'll have someone here from the team reach out to you J rich what the heck that's not good can you try it again you answer eight questions on our website and then once you're done with those eight questions the little calendar thing should pop up and you select the time where you want to where you know what's best for your schedule so try it again let us know and one of our team members can follow up with you and Priya says hailey has been awesome to work with on your team she's been really helpful hailey is fantastic that's great to hear our whole team is fantastic we our team works very very hard I don't have any homes available in the Houston area I do not I don't do anything in the Houston area yes there's values there but we all saw what happen with the last hurricane so I'm not I'm not investing in Houston at the moment do you see property values rising even more well no one has a crystal ball on that you know I don't have invest for appreciation at all I like to invest for cash flow but in the areas where I invest I've seen nice appreciation so like I said in the areas like in Michigan and other areas where I invest the house values have definitely gone up a nice little bit which is great it lets you refinance and get some better equity out of it Thor says I want to buy a home in Indianapolis or Indy but feel that it needs to be close enough for me to drive by like less than an hour away so I just totally disagree with that because do you invest in the stock market Thor and I love the name Thor by the way do you invest in the stock market do you invest in coca-cola Nike Apple do they are is Apple's headquarters in Cupertino near your house is Pepsi's headquarters near your house do you drive by them what are you gonna do when you drive by it wave to it hey Pepsi I have some money with you you're doing okay so when you have a property management company that takes care of your property that's their job you're paying them 10% a month or whatever you're paying them which is normal eight to ten percent a month right to manage your property to take care of it and get it cash flowing with a tenant in the property they handle maintenance requests now yeah that's fine if you want to drive by the property once every year to kind of check on things make sure that you know maybe it needs a pressure wash on the outside like I just went to Michigan was need even a bunch of my properties the first house I ever bought great condition needs a little pressure washing in the spring maybe after you know after the the winter grime from the streets you know hits but what are you gonna do you're gonna go in there like today here I'm I'm four I own this house I'm here once again your tenants are gonna love you by the way oh here's Thor again he's back every month hey Thor you know so you just have to ask what kind of a life do you want think about the investor that owns 2,000 properties do you think that they're walking by their properties no they're looking at it as a portfolio as a tax shelter as a cash machine and they have people managing their properties for them so I always like to say act like the investor you want to be sort of get out of the scaredy-cat phase of the investor you don't want to be okay that's just my little two cents I hope that you don't take that the wrong way Steven wants to know we're gonna wrap things up here in a moment we've been ongoing for almost an hour now I hope you guys find these valuable I really love doing them and I hope I can help you guys as much as possible let me know give me a thumbs up right now if you guys find these valuable I hope you do because if you don't then I'll stop doing them but we've been having a great time doing these shows so I really appreciate it and I hope you guys find these valuable Thor since you have something for me in Indy yes we do that's one of our markets just booked a call with the store we'll take care of you one of our team members will jump on with you and take care of you don't worry about it in fact we just got we just bought two properties that we're doing a renovation on right now in Indy and I don't know if they sold yet this morning or not but book a call with us because that's one of our markets so we're constantly buying properties that we have to renovate Josh Donsky I'm 19 years old and I bought my first house to flip start a flipping wholesaling raise capital do you think I should keep raising some capital or just get going with rentals look Josh you were like me okay you've got to just take action you've got to start I did a whole speech okay in front of 300 people all wholesalers and was talking to them about look you are a finder not me a keeper okay you've got to start holding onto some of these properties you've got to start getting them cash flowing and becoming a rent because right now it's a paycheck right what you're doing is just a paycheck if you're flipping it's just a paycheck okay if you're working your nine-to-five you might as well be working a nine-to-five job that's just a paycheck okay you're working for somebody else you're only as good as your next paycheck start getting rental properties that produce monthly cash flow start getting performing assets so take action and start holding on to these okay start buying some of these properties that's what you need to start doing thank you guys Brad Toney very valuable Alfredo thank you so much a sale game as thank you yes yes you guys are awesome there was one question I wanted to go back to TV bangarang says I have 10 to 15 K to invest in a home would it be better to keep saving to buy a cheap property in the Midwest outright or should I try for a rehab loan I would save up a little bit more money if you can and try to find a you know cheap property that you can that you can renovate and get some get some cash flow going from that's what I would recommend did you do let's see just Joe Johnson says he just completed a sandy renovation on a waterfront house I grew up in worth 800 K we owe on it you're getting the certificate of occupancy next week do I sell it or rent I'm hearing I'm hearing yeah I'm not gonna even though those numbers Joe just looking at those numbers I would absolutely sell that house now here's how I would not sell it I would not sell it on the capital gains I would make sure if you've owned it you grew up in this house that means you shouldn't have to you should be able to use it as a 1031 exchange okay we just did do we have that video guys in the chat from my team the 1031 exchange please do a 1031 exchange so you're not paying taxes on that sale okay please please please set up a 1031 exchange if you can't I don't know the mechanics of how long you've owned it lived in etc but just call our friends who we work with on the 1031 exchange they get you set up that way that five hundred thousand now is profit okay you're not gonna pay any taxes on it roll it into the 1031 exchange and then buy ten rental properties with that that's what you need to do man that's what I would do all day long because no way in the world is that ROI going to be there from renting that place it's just not there's no way on an eight hundred thousand dollar house again remember my rule anything over a hundred and fifty thousand dollars is not a smart investment for four unless it's like a multi-family okay and I'll we can get into splitting hairs about if it's a vacation rental and you're renting it out weekly and and all of that but I don't want to get into that I'm just saying Oh for buy-and-hold monthly rentals one hundred and fifty thousand dollars is the most that you should be spending on a single-family house in my humble opinion in my humble opinion Dean says Dean yeah Cora after putting in work on a home and refinancing do you keep all your key locks open and maxed out after you're acquiring multiple properties and you pay them down I like to pay them down as quickly as I can and I keep those he locks open remember it's a home equity line of credit it's like a credit card right you start with a zero balance maybe you have a hundred thousand to work with or thirty thousand you max it out you pay it down it's usually open for about ten years as a HELOC okay a home equity line of credit remember to check out my book how to pay off your mortgage in five years using a HELOC it's a killer strategy and even if you use a portion of your HELOC to pay off your primary I think it's a killer strategy all right right right and you see if I can squeeze in one or two more questions here alpha says hello I have a bunch of rental properties free and clear I have a bunch of debt and tax return not attractive because of right off from the repairs how can I do a cash out refinance I have a bunch of debt and tax returns not attractive because of the write-off from repairs I'm not sure how can I do a cash out refinance sorry I would need a little bit more details on that alpha I'm sorry I wish I can answer that you know if you've got a bunch of rental properties you may want to consider doing what's called a cost segregation check out my podcast not the video but check out the audio podcast the power of a cost segregation I don't know how many of you are listening to my audio podcast on iTunes it's called the investing in real estate podcast with Clayton Morris I have a whole episode on cost segregation so I can look at all of your rental properties and then you can cost segregate items in your rental properties the roof the windows individually for your tax write-offs so maybe that'll help answer your question I hope do you have any knowledge on the Texas market yes I do yes I do again higher taxes so you just need to be careful about where in Texas you are property taxes tend to be much higher so you just need to pay attention to that if you're investing look for job growth don't and here's one rule for Texas investing when people make mistakes of like investing near one oil refinery and there's no other jobs in that town guess what happens when that oil refinery goes out no jobs people living in your rental property or gone so invest where there's a lot of growth there's a lot of jobs there's a lot of blue-collar employment okay yeah vacation rentals are good yakov just you you got to really be savvy with them because a lot of times vacation rentals have a homeowner's association so are you paying 800 bucks a month to a homeowner's association during three months of the year when no one's in your property because it's the winter so a lot of variables I'm not a big vacation rentals you can do it well it's hard to do you need to be really strategic about it it's not my bag though it's not my area of expertise JJ Mae great question do you see significant increases in property taxes or insurance costs when your homes are under owned in your LLC's versus when they're owned by an individual nope has no bearing whatsoever on it every property I own is owned in an LLC Lindsay I love your podcast so much thank you so much Santiago how do you feel about Newark New Jersey properties I've done a lot of stuff in Newark but only as on a wholesaling front years ago I mean they're really expensive so again for for flipping it's a great market New Jersey California for flipping houses you buy it for 300,000 you sell it for 600,000 you put a hundred and seventy thousand of work into it it's a good flip market deals are it mean holy smokes is it competitive though so good luck in Newark but also Newark has a lot of murders so we are traveling I was like getting these news alerts you know from New Jersey I get the follow some of the local New Jersey news and say another murder in Newark New Jersey like great ngn Wynn says how quickly can I buy a property with Morris invest is there a waiting list there well there's not really a waiting list but it's first-come first-serve so oftentimes when someone's working with us for the first time we'll let them know that our properties sell pretty darn quickly and so you know if you need to go ask your grandma for permission to buy the property maybe do that first before you call us right so because sometimes we'll send a property to someone that we have that's available and they'll say okay I'll probably let you know by the end of the week I want to check with my wife I'm gonna check with my third cousin once removed and then by that time the house is sold so there's not a waiting list but we do we don't well I guess I should say nicely we don't work with them we don't work well with tire kickers so if you're ready to invest your book a call with us and we can once we have the property available and it comes in we can make it happen pretty um what news app is that oh I hope just use a I just use Apple news you know I just subscribe actually Google News Google has a new news app that is really good on the iPad so I use my iPad I run my whole company on the iPad I love it and Google News has a new iPad app out which is really really great and you can subscribe to like your favorites and your local news stuff but you can do the same on Apple news on your on your iPad or your iPhone as well and if you use an Android device you can use Google News as well so it's pretty pretty simple so just check in the stock market before we wrap things up here I love talking to you guys thank you guys so much for making this a great day I really appreciate it 200 points down Oh bounce back a little bit now 50 points down I don't know man so some of these housing starts that's the thing these like these equity futures again just seeing some craziness and volatility in the stock market and so glad I'm not really in the stock market at all and have all my money in real estate because it's this volatility I want monthly cash flow with an asset that can never go down to zero dollars and value and when you've got stocks they can go down to zero dollars in value and you can lose everything and we my wife she talked about Enron right she was an investor in Enron I mean it absolutely can happen so that's what's happening right now in the stock market I'm gonna let you guys go I hope you guys have a wonderful week thank you guys so much for subscribing to the channel I really appreciate that a lot of great questions today I just want to give some shout out Stephen Foster Oh Stephen wants to know how many properties can you purchase using a bank before you hit that inevitable wall I think it's ten maybe they've increased it I think it's ten hey Alex wants to know is there a Morris in this stock I can buy not yet Michael wants to know what range is your home sell for so I can be prepared our home sell between I say our sweet spot is kind of between 50 and 70,000 ish all in it just kind of depends on the size of the house and the neighborhood honestly but we try to stay within that sweet spot and that includes the renovation so when you work with us you're not paying an additional thirty thousand for the rehab our team is doing that that's built into the cost of that all right guys thank you guys so much love you guys we'll see you back here remember subscribe we do this show every Thursday I'm sorry every Wednesday at 11 a.m. Eastern time but we published shows regularly here so and if you haven't already downloaded it please click on our freedom cheat sheet it's right there you can download our freedom cheat sheet it's three pages it's totally free it lets you figure out you know your costs how much it'll cost you in your monthly expenses and how many rental properties it'll take for you to be financially free I love all of you we'll see you back here next time now go out there take action become a real estate investor because I believe it's the number one way to build wealth we'll see you next time everyone

Channel: Morning Invest

Views: 232,962

Rating: 4.8964891 out of 5

Keywords: how to find cheap houses to buy, Morris invest, rental property investing, turnkey real estate, how to find cheap houses, cash flow, 1031 exchange, self directed ira, cheap houses, cheap rentals, cheap rental property, cheap rental properties, clayton morris, clayton morris real estate, buy and hold, grow portfolio, mls, overpriced properties, off market properties, off market real estate deals, off market deals, private money, realtor, real estate portfolio

Id: d5zAm2t7gqI

Length: 64min 43sec (3883 seconds)

Published: Thu Oct 18 2018