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Buy Multiple Rental Properties - Interview and Morris Invest Review

Welcome back to our popular interview series that puts our next client, Don, in the spotlight. This segment focuses on how Don went from zero to 15 rental properties in just three years. He shares his outstanding journey, with full transparency, of how he grew his portfolio, and what his future goals are. He also discusses what it was like working with Morris Invest, a full-service real estate investing company, and how he greatly benefited from it.

Let’s Dive into Don’s Inspirational Rental Real Estate Journey

Our discussion with Don is just a glimpse into the unlimited wealth building possibilities that investing in cash flowing properties can bring about. Additionally, owning rental real estate is really one of the most lucrative paths to becoming financially free, provides a quicker avenue for building up a substantial retirement fund, as well as allows investors to escape their 9 to 5 job that may be keeping them from enjoying life to the fullest. With that said, let’s get started learning more about how Don is building financial independence for himself, and his family, by investing in multiple rental properties:

1. What was the catalyst that prompted you to start working with Morris Invest to create passive income through real estate?

0 to 15 Rental Properties in 3 Years - An Interview with Don and Morris Invest ReviewWell, my commute to work is from the California high desert to Santa Monica, and during the drive, I listen to a lot of shows. I caught your commercial, and you and your wife struck me as down-to-earth, honest people. I then started listening to your podcast more religiously, and I started following your steps.

One of the big changes, I’m not sure if it was from your program; I listen to so many podcasts, they were talking about 401(k)s and how terrible they really are. For instance, if you only have $150,000 in your 401(k), it’s not enough. That number hit me at home because that’s exactly what I had in my 401(k). It also mentioned that once you take out your fees, your taxes, and then divide the rest by how many years you’re going to live, how much do you really have per month? I then realized that I have nothing compared to my longevity, since my grandparent lived to 103 years old.

So, I figured whatever I have in this 401(k) or 403(b) is not going to last me my whole life. When I started following you, and you’re showing us the steps about the one percent rule, and the BRRRR method, it just caught my eye and I started following you religiously. Additionally, with the help of Fund & Grow, and what we have talked about in the past, you just really showed us, my wife and I, what to do. Within the two years, I actually had the 15 doors (rental properties).

One of your steps is to buy as much as you can, pay them off, and then retire. I’m on number two, and I think I have two more years with these tenants helping pay off this loan, so that I can actually start retiring. I turn 56 next week, at 58, hopefully, I can stop working, and just buy more investment properties as we go.

Clayton: That’s great. There’s a lot of things you said there that I want to unpack. So, let’s talk about one thing, I’m very anti 401(k), as you know. In fact, earlier today I was on a live stream talking about the 401(k). I mentioned it as an aside, and the people that were watching had never heard, or thought about this philosophy, about the 401(k) being sort of a middle-class trap, where we are lied to about the 401(k). Then someone said, “well, why don’t you like it?” And then I just went on a rant and explained why it’s such a problem. You know, the whole idea of the 401(k) is that you’re going to have a pile of cash at the end of your life. Well, for most people, the average 401(k) in the United States, at retirement, look it up, it’s actually anywhere from$70,000 to $80,000 at the end of their life. Are you going to survive on that for 20 years?

2. You had $150,000 in your 401(k), and are expected to live off of that until you’re 103 years. The math just doesn’t add up, right?

Yes, and that amount was between my wife and I, the $150,000. You know, you just put the three percent in, and you just hope for time. Some days the markets are up, and sometimes they’re down. But, you know, even in your real estate game, it’s up and it’s down. For instance, I had to put a new roof in last month on one of my properties; the wind just blew it off. I took a little hit, but like you mentioned, you’ve got to save your 40 percent. With time and the multiple homes that I have, I actually was able to pay for the roof using tenant money, versus money coming out of my pocket.

Clayton: Plus, that’s a tax write off because it’s an expense. You’re running a business when you’re a real estate investor, but when you’ve got a 401(k), you’re not in the business. You’ve got a retirement plan with all kinds of fees in there, and you’re relying on a stock market, which is in many ways out of your control.

You can learn more about this topic in our article – Best Investing Strategies: Real Estate VS Stocks.

3. You bought your first property three years ago and grew your portfolio to 15 doors. Take me back to that first property. What did that look like? Where was it? What were the numbers on it, and how did you do it?

Well, when I was listening to your podcast, you had mentioned the three states, Ohio, Indiana, and I forget the other one. I Googled Toledo, Ohio, and I found the first property. I didn’t do my homework all the way, but it was $19,000 for the property. After I got my LLC, and we talked about getting business funding, I actually went to my local bank, and they gave me a line of credit with my LLC, and it was $40,000.

I was able to buy the house for $19,000, and put $20,000 into the renovation. I then hired my property management company. I did vet them, and they’re a great company. They took me under their wing, and helped me fix up the house and put a renter in there within a couple of months, and I was able to get $750 a month in rent.

You know, the bad thing about that house is that I didn’t do my homework to be able to see that this wasn’t the best side of Toledo, it was the east side, which was not the best side. But, you know, I rented it, and it was successful for the last three years, with a little bit of heartache in between. However, the property management company knew what my goal was, and they started helping me buy other homes.

At that point, I finally talked myself into joining Fund & Grow, they funded me enough money to buy more properties, and with some leveraging that you teach, and I’m sure you remember some of the questions I’ve asked you about Churchill Mortgage and Flagstar, and other people, it’s all helped me on my journey to get what I need, to help build what I have.

Clayton: Also, I think what’s important about what you’re saying here, Don, is that it wasn’t just one thing. You know, there were multiple elements, and that’s how I got started. I borrowed from my 401(k), I used money and cash on hand, and I used Fund & Grow money. By the way, we have a link on our website if you’re interested in Fund & Grow, to learn more about how that works with zero percent interest cards. And then, of course, you’re setting up a business, LLC, and they help you with that whole process. You just need to have an exit strategy when you use Fund & Grow, because you know, your borrowing is like business credit. It’s zero percent interest, but you’ll want to know how you’re going to pay that back. That’s an important part of the process.

So, it was multiple ways that you were able to pull this funding together to start on this journey, and you started in Ohio, and you expanded from there.

You can  find out if Fund & Grow is right for you by diving into our detailed Fund & Grow Review.

4. In the beginning, you were doing a lot of the work yourself; finding contractors, dealing with renovations, and so on. What made you move towards working with Morris Invest, which is more of a full-service model?

I saw more of your podcast and you were telling us about Lubbock, TX. I met Haley, a wonderful patient lady, along with the property management team in Lubbock. We went ahead and took our Roth IRA and we transferred it to a custodian that would allow us to buy real estate with it. Hayley and the team, step by step, helped us, my wife and I, get two properties that are right next door to each other in Lubbock, Texas.

We finally went out there and we met the property management team, and we met with Kendall; she’s great. She was on time, before we even got to the property she was there waiting for us. We couldn’t see our homes because they were already rented. They were that quick, that by the time they closed construction, and by the time I got down there, they had rented the houses, and they had already moved in. So, I had to look at the houses next door to do our walk around.

The whole process was great. Lubbock is a new city and it’s booming. These homes that we have are next to restaurants, hospitals, airports, it’s a great location.

Read more about the area Don is referring to in our article – Is Texas a Good Place to Invest in Rental Real Estate?

Clayton: For people that don’t understand, a lot of the properties that we are building this year, and beyond, are in West Texas, and other parts of Texas as well, some that we’re not ready to announce just yet. We’re always analyzing these different markets. And what we love about Texas, of course, is that it’s really one of the most landlord-friendly states in the country. I mean, it’s always at the top of that list. Plus, because we’re buying land in the best school districts, that’s why they went up so fast. And what I love about Lubbock, of course, as I mentioned here on the show, is that there’s such a diversity of jobs.

5. Did it surprise you that there was so much job diversity in Lubbock, TX?

We were there for a couple of days, and I went to the local mall and actually talked to people to ask what type of work do they do. Also, they seem very happy there. It’s a very tech town, and they have Texas Tech there. I also went and played a round of golf at the local golf course, and I stopped and talked to people, and I said, “Hey, how do you like it here?”. They were actually very honest, and took the time to talk to me in between their game. This was a weekday, so people were working and enjoying life at the same time. It was really nice to talk to people, it made me feel good. There is a little risk, because I’m going by what you and your team say, and let me tell you, you haven’t disappointed me yet.

Everything is within the three years, and I have so much in such a little amount of time, and it rarely has come out of my pocket, with you showing me how to leverage.

Clayton: Well, one of the things we do is encourage people to come to town. Come and visit, come and see what we’re doing, and meet the team. Come and walk through our new construction properties, and everything we’re doing there is new construction. Let’s talk about the house a little bit, because that’s where I geek out on stuff, I love talking about the new construction and walk-throughs.

6. All of the properties you bought were new construction, and you purchased them with your self directed IRA. Did you have financing involved as well?

Yes, we did. We had non-recourse loans. The people that you have partnered with, SDIRA Wealth, were on the phone with my wife and I, and they answered all our questions 100 percent to make us feel confident that the financing is going to be there for us.

I guess after a certain amount of time, we’ll have to refinance the houses because of the structure of the loans. But they said that it’s not a big problem. And so, you know, the trust is a hundred percent there.

Clayton: With interest rates as low as they are, it’s only going to remain that way for the foreseeable future. I always talk to people, and say, “Why would you want to use your own money? You know, use the bank’s money, use as much of other people’s money as possible to build your wealth. What other asset class can you put 25, 30, 35 percent down, and have someone else foot the bill for the rest of that asset, where you get the tax benefits of that asset, and they don’t. I mean, you’re not going to find it anywhere else.”

I want to talk about the house because now you’ve got a non-recourse loan on this property, inside of your self directed IRA, which is like advanced-level stuff for people that might not understand how you can do that. So, you’re taking a portion of your IRA, using that as a down payment, and you’re getting financing for the rest of the property.

The beauty of that purchase is that it’s not tied to you personally. It’s not tied to you, Don, and your wife. It’s tied to the asset, the house itself. That means that at every stage of construction, the bankers are going, they’re watching the process, and they vetted the property management team. Using a non-recourse loan is like having an extra set of eyeballs because they’re vetting the house also, and putting their money into this house.

7. How did you feel about using a non-recourse loan as an investor?

Well, it was kind of a sigh of relief because they didn’t really use my personal, or my business credit. You put enough money from your Roth IRA to fund it, and with the policies that are made, everything just goes smoothly. You know, there’s always a little hurdle here and there, but everything went smoothly. With the people at SDIRA Wealth, with the team, and with Hayley, and her part, we didn’t feel stressed. If anything should happen to the homes, it has nothing to do with my personal life.

Clayton: Right, because it’s not tied to you personally. That’s the beauty of it. And that’s why non-recourse works really well with a self directed IRA. It also works well for our international investors who don’t have an entity in the United States, or a history of credit here. And so the bank is looking at this asset saying it’s in a great neighborhood, it’s cash flowing, it’s new construction, it’s in a demographic area that’s expanding, like you experienced when you were talking to different business owners and employees. So, all of those things together make that bank confident in that purchase.

International investors were discussed in this interview, if you happen to be one, take a look at our post on the topic – The Best Strategies for Buying U.S. Real Estate if You’re a Foreign Investor.

8. What did you think of the buildings and the construction of the houses you purchased?

Well, within the area where I bought our two homes, I feel they were the best homes on the lot. When you walked in, they were clean, and everything was brand new, of course. The hardwood floors and the appliances were all there, pretty much ready to move in. Better than what we thought it would be at that time, for the price.

Clayton: Yeah, I mean, that’s been our goal. It’s like, how can we provide something that’s really top-notch where a tenant is going to be super happy to be there, and want to stay for a long time in this particular school district. Also, where a client like yourself is going to be super happy, long-term, because you’re getting something that’s in a great neighborhood, a fantastic product, very well built, and it’s going to appreciate nicely year after year. With all of those things together, it’s a no-brainer from our perspective, and that’s what we wanted to be able to provide.

9. What are your goals, and how does the passive income and tax benefits roll into your yearly take-home, and how have the 15 doors changed things for you?

Well, as you describe through your seminars and your podcast, you have to have a goal, and our goal was – If my house is paid for, and I had no bills, how much money can I live on a year? For us, it was $60,000. That would be a great number for us to live on if we didn’t have any of these bills.

With your teachings, it was supposed to be ten properties. But like I said, with the help of Fund & Grow, and the fact that they kept helping me so I could buy more, I couldn’t let the opportunities go because you pay for the services that are helping you out to buy these homes, and so we ended up buying fifteen doors.

I figured two rentals will help me with the property taxes, and the other two will help me if the others don’t pay the rent. This way, I have a little buffer. But, as you describe in your podcast, you have to get your numbers as fast as you can, and pay these homes as fast as you can by having the tenants paying their rents. And since I have this goal met, now step two is to pay the properties off as fast as we can, so I can reach step three, which is to retire from my career, and enjoy the rest of my life without having to commute.

Don is working three days a week making a long commute, but starting to see the light at the end of the tunnel

My commute is 200 miles round trip when I have to work, and it’s catching up to me. I’ve been in the field for 26 years, and at this facility for half that, but I’m starting to see the light at the end of the tunnel.

I also have to say, your book is amazing – How To Pay Off Your Mortgage In Five Years. After I read your book, it took me two years to pay off my primary house in California. So, it works! Whatever you say, you know, you’ve done your homework, you’ve done your mistakes, and you’re passing this on to us. I had about 12 years to pay off my house, and with your book, I hammered that out in two years, without using tenant money, because the tenant money is for my business, not for my personal matters.

By the time that we put your book into practice, and factored in everything that you helped us with, I saw the light at the end of the tunnel. Hopefully, in two years, I can quit and retire from my job.

I have no bad words to say about this process, but it does take work, and this is where my wife comes in. I can’t do my chores around the house because I’m busy with doing this, and my wife has picked up a lot of that. She’s been patient with the process also, you know what I mean?

It’s passive income though, and I like your definition of passive income. It’s not sitting with a Mai Tai on the beach. It’s, you know, hey, I have time to take my wife out to lunch and come back and work, play a round of golf, and come back and work. But it’s work, and it’s not easy money, you have to put your time in.

Clayton: Absolutely. You have to nurture your portfolio, like you mentioned having to put a new roof on a property. But by having that freedom, it creates freedom in your life, and that’s exactly what we talk about with passive income.

10. What would you say to someone who’s sitting on the fence about getting started with real estate investing, and maybe even taking the plunge by working with Morris Invest, but who’s nervous about the process?

Don’t let the monkey on your back change your mind. It’s a lot of work, but if you just take it one day at a time, you do one property at a time, the outcome is amazing. If you really like it, then nurture your business. You just have to do it, because if you don’t do it, you’re going to go through all these years of saying, “what if I would have”.

Clayton: Well, I’m super proud of you and your wife for taking the plunge on this, Don. You guys are fantastic. Fifteen properties, fifteen doors in three years, and well on your way to hitting that freedom number. That’s exactly what we preach, and that’s exactly what I hope to hear. It makes me smile from ear to ear. I’m super excited that I got a chance to talk with you today about sharing your story with us. Thank you so much, Don. Give my best to your wife, and hopefully, we’ll be able to play a round of golf together soon. It’s really a pleasure to have you here on the show.

Everyone who’s watching, you can do the exact same thing. Which is to take action, you know, go out there, and become a real estate investor. I believe it’s the number one way to build wealth. So, we’ll see you next time, everyone.

More Inspiring Interviews with Successful Clients

If you enjoyed Don’s interview, then you will definitely like our other client success stories. With that said, we would like to share a few of them with you. Take a look at the pages listed below to get inspired by how these investors are building wealth through rental real estate, how they got started, what their goals are, and more:

Related Property Investment Articles by Morris Invest

If you would like to read more about a few things that Don mentioned, such as the 1% rule, Fund & Grow, Texas real estate, the BRRRR method, and more, then dive into our articles below. They will provide you with helpful information, great insight, as well as inspiration.

Get Ahead of the Game with Our Wealth Building Resources

We encourage all our clients to ensure they are on top of their game when it comes to making the right investment decisions, as well as making smart financial moves. With that said, we have created a few programs, and offer resources that can help set you on the path to financial independence.

You can start by diving into our Freedom Cheat Sheet, it’s a free download that helps you determine how many rental properties you need in your portfolio to achieve financial freedom. We also have our 90-Day Bootcamp that provides everything you would need to learn how to gain financial empowerment. You will also benefit from looking into our Financial Freedom Academy, which can teach you how to build the wealth you deserve.

You can read about more of our programs that are specifically related to real estate investing on our Morris Invest & SDIRA Wealth information page.

Get on the Path to Financial Independence by Quickly Growing Your Real Estate Portfolio!

Don went from zero to 15 properties in just three years, and now he can see the light at the end of the tunnel, which gives him a glimpse into a future that holds more freedom, and financial independence. With that inspirational thought in mind, if you’ve been on the fence about real estate investing, but need a push, schedule a call with Morris Invest.

We can make the process of owning a lucrative rental property super simple by taking care of all the details for you. Also, if you have zero properties right now, and you feel inexperienced, don’t worry, everyone has to start somewhere, and Morris Invest is here for you, to walk you through every step of the way. Our team has been in the business for many years now and we love working with our clients to help them gain financial freedom.

Get even more inspired by watching the full interview with Don:

 

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