Oceanpointe Investments owned property... hmmm

Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes

Hello,

Newer member to Bigger Pockets but fairly knowledgeable with residential real estate.

Question: I'm looking at duplex in Indianapolis, IN that's listed for $60,000. Condition looks okay from the pictures. Before wasting anytime my due diligence has me looking at the property records; I instantly see it's owned by Oceanpointe Investments Limited. They purchased the property for $110,000 in April 2017. How/why is this property listed so low? Should I completely avoid this deal?

I've been on the site for about a year (finally made an account) and read a lot of negative things about that company etc.

Thanks

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Ross Denman

Real Estate Consultant · Whitestown, IN · Member since 2014 · 549 posts · 933 votes

I'm not sure about this specific house, but we are listing an entire portfolio for an MI/OP client. He is taking over a $200k loss between his 7 buildings. None of them were completed, but he paid "full boat" at closing, like all MI/OP clients. He was going to sell half to fund the rehabs on the others, but recently got diagnosed with leukemia. Now he's pretty much giving away everything so his wife won't have to deal with it after he's gone. He invested about $500k overall and will be selling them for nearly half of what he's paid. That's not including the other money that he lost from city fines, penalties, and holding costs.

This MI/OP mess is very heartbreaking, but there will be some opportunities. It sucks that we've seen this coming for a year now and had many conversations about it on BP. We've had their clients defend this mess while they continued to drink the kool aid and argue with us in forums about how we didn't understand what was going on and how Clayton was going to take care of them. Now OP and Blue Sky are out of business and there are millions of dollars spent that will not be recouped.

Understand... OP purchased the cheapest deals they could find, so 80% of them are in pretty undesirable areas. Worse yet, some of them are in such poor condition that the best choice will be to bulldoze it but the area won't sustain the cost to rebuild.

As always, there will be opportunities from this inventory, but buyer beware and understand what you're buying. Always do your Due Diligence. I'm actually looking at a couple of homes from this mess for myself. They're not all bad, but you have to be selective and diligent.

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Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
Probably trying to raise money for all their legal issues lol
5 Reply
Jaron WallingPro Member
OP
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
8y
I'm trying to figure out why they paid $110k for that property. It's in a C class neighborhood and needs work.
0 Reply
Clay Manship
Indianapolis, IN · Member since 2013 · 549 posts · 310 votes
8y
@Jaron Walling Nooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo
5 Reply
Dennis M.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
8y
Like anything ,When people are in a hole they sell at a heavy discount to get out of it . Ocean pointe isn’t exactly doing well these days if it’s the same one Morris invest is affiliated with! Do some research bro ! Hard pass on this one
0 Reply
Matt P.
Investor · Columbus, OH · Member since 2015 · 625 posts · 601 votes
8y
You should search ocean point on this forum and read some of the stories people have been posting. It's some pretty wild stuff.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
Originally posted by @Matt P.:
You should search ocean point on this forum and read some of the stories people have been posting. It's some pretty wild stuff.
wild/ sad/ unbelievable/ Fraudulent/gross negligence/ and plain dumb.. what an opportunity they had but Morris blew it big time.
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Jaron WallingPro Member
OP
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
8y
I'll definitely look at more discussions! Here is the information provided from the property card. Could someone explain the difference between type "Sale/Straight"?
Jay - thank you for replying to my post. I've seen you all over the site in the last few months. Learned a lot from your discussions.
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Ross Denman
Real Estate Consultant · Whitestown, IN · Member since 2014 · 549 posts · 933 votes
8y
I'm not sure about this specific house, but we are listing an entire portfolio for an MI/OP client. He is taking over a $200k loss between his 7 buildings. None of them were completed, but he paid "full boat" at closing, like all MI/OP clients. He was going to sell half to fund the rehabs on the others, but recently got diagnosed with leukemia. Now he's pretty much giving away everything so his wife won't have to deal with it after he's gone. He invested about $500k overall and will be selling them for nearly half of what he's paid. That's not including the other money that he lost from city fines, penalties, and holding costs.
This MI/OP mess is very heartbreaking, but there will be some opportunities. It sucks that we've seen this coming for a year now and had many conversations about it on BP. We've had their clients defend this mess while they continued to drink the kool aid and argue with us in forums about how we didn't understand what was going on and how Clayton was going to take care of them. Now OP and Blue Sky are out of business and there are millions of dollars spent that will not be recouped.
Understand... OP purchased the cheapest deals they could find, so 80% of them are in pretty undesirable areas. Worse yet, some of them are in such poor condition that the best choice will be to bulldoze it but the area won't sustain the cost to rebuild.
As always, there will be opportunities from this inventory, but buyer beware and understand what you're buying. Always do your Due Diligence. I'm actually looking at a couple of homes from this mess for myself. They're not all bad, but you have to be selective and diligent.
7 Reply
Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
8y
There is a chance that duplex is stripped to the bone and has more damage not seen. Have to check it out physically first but it possible some will profit nicely from Morris Invests fraudulent left overs/court ordered liquidations coming perhaps.
0 Reply
Larry Fried
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
8y
If Oceanpointe owns it, I wouldn't deal with them. They are simply unscrupulous - avoid!
1 Reply
Jaron WallingPro Member
OP
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
8y
Thank you guys for the responses. I've lived in Indy for 5 years and have a good understanding of the neighborhoods. It's unbelievable what those investors are facing! Being patient and due diligence is the only way. I won't bank on getting anywhere with the property.
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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
8y
I almost bought a house from a rat before. Buried deep down in the title report, only noted by it's APN, the property was collateral for a much larger blanket mortgage. If we didn't also search by APN, it wouldn't have appeared.
I'm good buying someone else's oops, just get title insurance and do proper DD on everything- city, codes, utilities, everything.
2 Reply
Jaron WallingPro Member
OP
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
8y
@Steve Vaughan wow!! Like everyone is saying deals are hard to find, but if it's to good to be true it probably is. It's no different than buying used cars or motorcycles.
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Mark Jones
Rental Property Investor · Indianapolis, IN · Member since 2017 · 104 posts · 47 votes
8y
@Jaron Walling, I would be suspect of any work that has been done by them or is claimed to be done, think electrical or hvac.
If you look at it with that knowledge, it could be viable. Everything has a price.
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
Purchase history is a big red flag.
On March 15, 2017 it appears there was a double closing where Michael Longley paid $18,000 and sold it for $30,000 to Indiana Fast Cash. Obviously the condition changed in no way between the $18,000 and $30,000 sales since it happened the same day, so that is just a wholesaler making $12,000 adding no value to the property. Then on April 21st, which was a month later, it sold to Indiana Luxury Homes. There may have been some light rehab during that month. Could be cleaning, painting and flooring, but not enough time for any significant rehab. Indiana Luxury Homes paid $55,000 so that is $25,000 that Indiana Fast Cash made for their light rehab work. Then seven days later on April 28th, Oceanpointe purchased it for $110,000. Are we really dumb enough to believe it doubled in value sitting there seven days? Not sure why Oceanpointe would pay that much, but there is probably some weird back story here or something illegitimate going on.
This property is probably worth $30,000 at best. This is a common Indy story, crap properties being recycled through wholesalers and flippers. Tenants trash them and the cycle begins again. I would stay far away.
2 Reply
Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
8y
@Jaron Walling The nearly universal opinion here on BP seems to be that Oceanpointe and Morris Invest are to be avoided at all costs. I've not dealt with either so I have no first hand experience.
From the sounds of this particular property, it sounds like Oceanpointe is taking a $50,000 beating on it. That *might* make it a good deal. And of course, you don't have to offer full asking price either.
I'd find an investor-friendly Realtor who knows that area. Get in to see it with a contractor or home inspector and have your agent run some detailed comps.
I get that everybody here seems to think that Oceanpointe is a skunk, but if they're really liquidating assets at a loss in order to cover their legal costs, you can turn their skunkiness into your profit.
EDIT - Seeing Joe Splitrock's comments above, it just looks like Oceanpointe made a very bad purchase. Those detailed comps are even more necessary.
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Jaron WallingPro Member
OP
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
8y
@Joe Splitrock Thank you for expanding and answering my suspicion. I figured this topic would fire some people up. My instincts told me said property was worth $40,000 so not much off your estimated value!!
0 Reply
Jaron WallingPro Member
OP
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
8y
@Charlie MacPherson Yes someone is taking a loss! I like this area of Indianapolis and it's half the distance to my job. I'm planning to house-hack for my first investment which is the only reason I'm looking at it.
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
It is time to pull the curtains back. I bet if you do property searches on all the Morris / Oceanpointe properties that you will find the same people coming up over and over again. Maybe I am wrong, but with the property records, I found these names within 30 seconds doing a Google search.
Indiana Luxury Homes is owned by Brett Snodgrass:
Indy Fast Cash LLC is registered to Griffin Law Group. It looks like someone is hiding their identity. Who is the person behind this curtain?
Oceanpointe Investments Limited is owned by Natalie Bastin.
1 Reply
Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
Originally posted by @Jaron Walling:

@Joe Splitrock Thank you for expanding and answering my suspicion. I figured this topic would fire some people up. My instincts told me said property was worth $40,000 so not much off your estimated value!!
The wholesaler paid $18,000 a year ago and it appears at most $10,000 worth of rehab as been put into this property. I say that because only one company owned it long enough to do any rehab and only a month. I don't think it is worth more than $30,000. There has to be a reason that Oceanpointe paid so much for that property, but it has nothing to do with value.
1 Reply
Andy Rumple
Wholesaler and Real Estate Broker · Indianapolis, IN · Member since 2009 · 438 posts · 293 votes
8y
Indy Fast Cash is just a wholesaler(me) Griffith Law Group just does my annual maintenance on my LLC
4 Reply
Ryan Mullin
Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes
8y
Every one that does even a little wholesaling in Indy sold houses to oceanpointe.. some more than others but no one is really hiding behind any curtain in that regard. But as locals at THIS point in time I would say pretty much boycott them or lowball just on principle. They made bad areas worse and even turned some decent blocks into areas where people are scared of the neighbors squatting in an ocean point house dealing drugs or stealing stuff. total plague on the city. Sad.
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
@Ryan Mullin you don't see any problem with the history on this property? It looks like three wholesalers passed it around, all making quick cash. Oceanpointe paid more than any of them for the property, most likely buying as a proxy for an out of state investor. How is it that Oceanpointe made the city worse and somehow all the wholesalers are innocent? Those wholesalers did NOTHING to improve the city. They just made fast cash, falsely inflated property values and looked the other way.
Just because everyone participated doesn't make it right. Locals need to take a stand on wholesaling too. People need to buy these properties and rehab them. Local home owners or investors that are buy and hold - not more fast cash flippers.
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Ryan Mullin
Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes
8y
Originally posted by @Joe Splitrock:

@Ryan Mullin you don't see any problem with the history on this property? It looks like three wholesalers passed it around, all making quick cash. Oceanpointe paid more than any of them for the property, most likely buying as a proxy for an out of state investor. How is it that Oceanpointe made the city worse and somehow all the wholesalers are innocent? Those wholesalers did NOTHING to improve the city. They just made fast cash, falsely inflated property values and looked the other way.
Just because everyone participated doesn't make it right. Locals need to take a stand on wholesaling too. People need to buy these properties and rehab them. Local home owners or investors that are buy and hold - not more fast cash flippers.
I never said that...
1. Yeah the history on the property is weird. No argument there. Frankly I see so much of this I'm 100% desensitized to it.
2. Thats what wholesalers do... They are middle men. Agree with it or not thats what they do. I have my opinion on wholesaling in general and specific wholesalers here in town.. I could go on and on and on about that subject. But I won't. that would be a different thread. I was simply stating that there is no "hiding" going on. You Mention Brett who is a stand up guy and does a ton of good business and actually brings value to the RE community and I know this for a fact because I buy properties from him and the end result is rehabbed house. I could give you at least a dozen examples of deals that I have done with him. He is a broker and does everything by the book on the record majority on MLS. He also runs a podcast and had Clayton Morris on his show... not hiding or doing anything wrong legally or ethically IMO. You also mentioned Andy's entity and he came on the thread and straight up said it was him. Not hiding.
3. I am that guy that rehabs properties and offers them to home owners and buy and hold investors. and I don't really use wholesalers unless they close on the properties with there own money and disclose fees etc..
4. This isn't the first group that came to Indy and thought they were hot sh*t and could pull the wool over the eyes of us Indiana folk and get over on everyone from the municipal government all the way down the line to the out of state investors that line up to get these "deals" that magically get pumped out 20 - 50 a month in a town that barely has that many decent deals total. Ive seen this happen over and over and over.  IMO you have to look the out of state investors roll in this too. I can scroll back and start reading Jay Hinrichs comments warning people about this before OP even started.
A lot of the locals that end up wholesaling these deals don't know or care what the end result is. I agree a lot of the time it adds NO value to the city or the economy or society in general. I know lots of brokers that fit under the same category. I know lots of buy hold investors as well that couldn't give 2 craps about providing quality housing and improving communities. and all they care about is there bottom line (which is funny to me because they make way less money slum lording then doing it right). Local and out of state.     Again... I could go on a on about all of this. This whole ocean point thing doesnt need to be a witch hunt. Its waaaay to obvious who are the criminals here. Like.. not slightly un-ethical. Straight stealing. Criminal. I mean the guy left a death threat on a voice mail of a local PM for a post on BP!
The original post was more about "should I buy from oceanpointe?" and basically I said no. or lowball them out of principle.. which I should add to that make sure you use a really thorough title company if you do.
Honestly.. Inventory is at an all time low and people need deals. If I buy a property from a bad person because I need a deal to keep my company going and keep my guys working does that make me a bad person too???? Im participating... ?
7 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
@Ryan Mullin I suspect virtually every wholesaler in Indy has their hands on these oceanpointe deals and many realtors.
I have seen this play before only not to the magnitude of what Morris was able to pull off here..
his model is gross misrepresentation when you look at his marketing materials.. I have seen enough civil complaints over the years in various iterations so that I could basically write the summons and complaint myself..
I sure hope the Indiana authorities stand up and do something here.. there have been hundreds of investors injured in this scheme created by Morris.
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