Top Ten Blog Posts for Real Estate Investors

5 Most Landlord Friendly States - Before purchasing a rental property, you’ll want to be informed on how lease agreements, security deposits, and evictions will be handled in that state. The implications can be substantial, so you don’t want to overlook this list!

Creating a Strategy to Reach Your Financial Goals (Free Download!) - Goal setting is so important, and that’s why I'm passionate about sharing the message of finding your Freedom Number. However, it’s important to set short-term goals in order to reach your ultimate goal of financial freedom. In this post, we're sharing a free resource you can use to set short-term financial goals. 

Flipping Houses vs. Owning Rental Properties - Flipping houses and owning buy and hold rental properties are two of the most popular real estate strategies. These two strategies work very differently, and generally I recommend that you choose one path. This post is designed to help you choose the right strategy for your lifestyle.

10 Tax Deductions for Real Estate Investors - My favorite tax accountant Tom Wheelwright likes to say, “if you’re a real estate investor and you’re paying taxes, then you’re doing something wrong!” One of the top benefits of real estate investing is the enormous overall implication on your tax burden. This post outlines five tax deductions you’ll want to consider!  

How to Prioritize Profit in Your Real Estate Business - Finances are an integral part of running any business, and real estate investing is no different. Figuring out how to properly and effectively structure your finances can be confusing, but a couple years ago we discovered a method that totally changed our business!

The Worst Way to Invest in Real Estate - I find that many new investors make this one huge mistake! If you want to be profitable as an investor, this post is for you! 

What's the Difference Between an A, B, and C Neighborhood? - Chances are, you’ve heard investors throw around the classifications of A, B, and C neighborhoods. This can be confusing if you’re new to the game. In this post, you'll learn how to distinguish between the different classifications. 

How to Effectively Manage Your Real Estate Cash Flow - As your real estate portfolio grows, it becomes impossible to remember things like when you receive rent payments, when insurance is due, and other details about each individual property. That’s why it’s incredibly important to have a system in place to account for your cash flow. In this post, we're sharing how we manage cash flow in our biz! 

Five Ways to Creatively Finance Your Next Real Estate Deal - You might think that investing is only about the numbers, but in order to grow your portfolio, you’ll need to put on your thinking hat and be creative! The beauty of investing in real estate is that there are many ways to finance a deal. It's important to be open-minded, and receptive to the possibilities. In this post, you'll learn about a few different creative financing options that could work for you! 

5 Things You Need to Know Before Purchasing Your First Rental Property - Most investors hold misconceptions and make mistakes when they're starting out. I know that I did! Many of us learn through this process. You shouldn't beat yourself up if you overpay on your first rental or make extraneous renovations. What's important is that you learn from those mistakes, and get your strategy on the right path. In this post, I'm sharing five things I wish I had done correctly the first time around! Follow these five tips and you'll avoid a lot of headaches. 

Six Steps to Earning a Passive Income in 2018

If you to build a passive income and create financial freedom, there's a specific way to go about reaching that goal. It's not all about the money; wealth building is also about changing your thoughts and behaviors. In this post, I'm sharing six specific steps you can take in order to reach your goals

1. If you're serious about building wealth this year, the first thing you need to do is get clear about your "why." Really consider why you have this goal in mind. Do you want to spend more time with your family? Are you trying to build legacy wealth? Is it your intention to eventually leave your day job? Whatever that motive is for you, grasp a strong understanding of why you want to build wealth.
2. Focus on your "one thing." What is the path that will lead you to your goal? For me, it's been single-family rental real estate properties. Had I been easily distracted by other avenues and opportunities, I would have lost sight of my "one thing" and made virtually no progress at all. Don't get derailed. 
3. Write your goal down somewhere you will see it. Whether that's on your fridge, in a planner, or on a whiteboard, keep that goal in a place you will constantly be reminded of it. Writing down your goal solidifies it in your mind. 
4. Remember the importance of the mantra, "progress not perfection." If you are concerned with perfection, you'll never be satisfied. Don't try to have all of the answers before you get started, you'll learn as you go, and that's okay. 
5. Consider the importance of practicing gratitude for your small steps and achievements. Reward yourself for taking actionable steps in the right direction. 
6. Stop being a wimp. Stop feeling sorry for yourself. This attitude will get you nowhere. Understand that you will make mistakes, sometimes it will be difficult, but if you stick to your goal, you'll achieve it.

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

How to Find Off-Market Properties

Most people think the way to find a great investment property is to search listings on Zillow or call a realtor in their neighborhood. It turns out, these are some of the worst ways to find a rental property. As a real estate investor, your goal should be to make a high return.

By the time a great deal hits Zillow or a realtor is listing the property with a yard sign it’s going to be overpriced, cutting into your ROI. Often with a retail property, you’ll still have a rehab to do so you’ll need to wiggle room in order to keep your overall costs down. And that’s where off market properties come into play.

An off-market property simply means the market doesn’t know about it. A realtor hasn’t listed it and no one is putting out a cheese tray at an open house. Finding an off market deal takes a great deal of patience and the ability to be endlessly creative. 

There are many ways you can find off-market houses. In this post, I'm sharing a few of my tried-and true methods. This is not a comprehensive list, but rather a few of my favorite ways, and a jumping-off point to get your head in the game! 

1. Knock on doors. Vacant house in the neighborhood? Ask the neighbor if they know who the owner is. If a house is vacant, chances are the owner wants to sell it. They might have back taxes, or there are too many repairs to deal with so you can likely get a great price on it. Don't be shy! You never know what could happen if you simply ask. 
2. Direct mail. This is perhaps the most popular way to find off-market properties. Pull a list of houses from a website like ListSource.com. Target your favorite zip codes. You’ll want to target owners that have a lot of equity in their house, and that’s easy to do on a website like Listsource. Send the owner a letter or post card letting them know you’re currently buying houses in the area. Provide them with a phone number and make them an offer. Very often I’d send out thousands of these letters and for every 100 letters you should expect about 1-10 phone calls.
3. 3. Meet ups. Regardless of your real estate goals, you should attend a meet up in your area! Local meet-ups are a great way to find investors who know inside details about off-market deals. You can find a meet-up in your area by visiting meetup.com.

If you want to learn more about making a high-return investment, we can help! Click here to book a free 30-minute consultation about turnkey real estate. 

Real Estate Investing Start-Up Costs

You probably already know the regular monthly and annual expenses you should account for as a real estate investor, but what should you expect when you’re just getting started? There are a few one-time start up costs you will incur when you begin investing in real estate.

The types of properties that we provide at Morris Invest are single-family homes in America's best rental markets. These properties are typically in the $50-60k range. For this kind of investment, there are a few costs you should expect when you’re getting started.

1. Setting up your business entity. Typically, this will be an LLC.There are a few ways to do this, but I typically recommend going right to the source—the department of state website where your property is located. In some states, you may need to use an attorney. To set up an LLC, you should expect to pay anywhere from $100-300.
2. Insurance on your rental property. This amount can vary, as it depends on your location and coverage. Typically, I pay anywhere from $400-600 per year for rental coverage and liability insurance.
3. Setting up a business checking account. You’ll need to have a business checking account to collect rent every month. Some banks charge a monthly service fee as well as minimum opening deposit. Local banks may have free accounts, so shop around.
4. Closing costs. When you purchase your rental property, the title company will charge fees. A good rule of thumb is anywhere from $300-500. This amount accounts for running a title search and recording the deed.
5. Landlord license. This cost is not applicable in every state, but some states do require a landlord license. If your property is located in a state that requires a landlord license, you can expect to pay $100-150 on a yearly basis.

Tax Benefits for Real Estate Investors 2018

When it comes to taxes, there’s never been a better time to be a real estate investor. The new 2018 tax code contains incredible ways for real estate investors to keep more money in their pockets. In fact, taxes are the number one way that investors make money! In this post, we're sharing five incredible ways real estate investors can benefit from the 2018 tax code! 

1. Corporate Tax Rate. One of the biggest changes in the new tax law is how businesses are taxed. Previously, businesses were taxed at a rate of 35%. Starting in 2018, businesses will now benefit from a permanently lower tax rate of only 21%. 
2. Pass-Through Deduction. A last minute provision to the tax law also positively effects investors. This permits pass-through entities, such as an LLC, to take a 20% deduction on passive income.
3. Business Equipment Deduction. Starting this year, the tax code has broadened the spectrum of "business equipment." Now real estate investors can reap the benefit of deducting equipment for rental properties. The definition has been expanded to include roofs, HVAC systems, fire alarms, and much more. 
4. Hiring children. In the new tax code, the government has doubled the exemption for hiring children. We’ve discussed on the podcast before how we legally pay our children to do administrative tasks; but now we can pay them more, and pay less in overall taxes.
5. Estate Taxes. Now, assets can be passed down without having to pay huge taxes. The estate tax exclusion has doubled for both single and married investors. 

To learn more about saving on taxes, we highly recommend Tom Wheelwright's book, Tax-Free Wealth! 

The Power of Private Money for Real Estate Investing

Is it possible to invest in real estate with no money? Can you purchase a property with no real estate experience under your belt? ABSOLUTELY! This might sound like a wild idea if you've never heard of it before, but the world of private money is huge! 

What exactly is private money? Private money refers to any money that you borrow from a non-bank. It could be from a friend, a relative, or another real estate professional The beauty of private money is that because it's not regulated by the government, you get to write your own rules.

There is a whole world of money out there just waiting to be invested! If you go to a local real estate meetup you will meet lots of investors looking for partners. They may want to finance deals, or they may want help on existing deals. This is a great way to get started and find some private money partners. All it takes is for you to work up the courage to walk into a meetup and start to befriend strangers. Yes, that is hard to do. I've done it. It takes courage to say that you're a real estate investor, especially when you're just getting started. But the same can be said of any career. You have to start somewhere! 

If private money sounds like the right fit for you, there are some incredible resources you can use to learn more and land your first deal. Getting the Money by Susan Lassiter Lyons is an incredible book that contains tons of great strategies for securing private lending, getting in the right headspace, and so much more. 

Additionally, on our YouTube channel we have an entire Private Money Series! I've created an entire playlist dedicated to finding private money. You'll learn how to create a credibility one sheet, how to decide how to compensate your lender, and you'll even see me set up a lunch meeting with a private lender. 

Tax Tips for Real Estate Investors: The BRA Method

Accounting for repairs and expenses on a rental property is a topic that creates a lot of confusion. However, the IRS has set forth regulations that are very clear. In this post, I’m sharing a simple mnemonic device you can use to determine whether or not an expense can be written off immediately, or capitalized over time.

The BRA Method refers to Better, Restore and Adapt. Anything that falls under one of these categories counts as a capital expense. These are genuine improvements from when the property was acquired—an improvement that increases the value of the property. 

B – Better - This one is the most obvious. If you’re bettering the property, you’re making an improvement. This means adding something to the property that improves the quality and adds value.

R – Restore – This instance refers to purchasing a historic home, and restoring it to working condition. Restoration means you’ve replaced substantial components of a property in order to bring it back to life.

A – Adapt – In my experience, adapting a property is less common, but it does happen from time to time. Adapting a property means making changes that allow the home to serve a new purpose. 

If you want to learn more about understanding the US tax code, we highly recommend Tom Wheelwright's book, Tax-Free Wealth.