Buying from Holton Wise- poor communication

121 Replies | Cleveland, Ohio

@James Wise , 'Alan clearly has a problem with buying low income high risk rental properties.'

Before I get into the rest of this post, I would like to commend you on an entertaining YouTube channel. :-)  I realize I do not have the number of properties you manage and never will.  But I have not gone thru, as an owner, even a MINUSCULE fraction of the problems you encounter and post on YouTube.  I have yet to encounter a dumpster fire or other calamities you have posted.  I guess it's 'dumb luck' on my part, but I think it has more to do with business model. 

Many of your owners, or perhaps even yourself, encounter tens of thousands of dollars of damage on some of these properties.  That has to eat into YEARS worth of profit margins, no matter the price of the property.  In some cases the damage MIGHT be more what the property cost to purchase.  Yikes!

I apologize if I offended you with regards to the CM contrast.  It is my belief that CM could be YOU, if he was an honest person & operated with integrity.  Obviously you are making money doing what you are doing or you wouldn't be doing it.  ;-)  

There is nothing wrong, ethically, with running D/F properties.  After all, somebody's gotta do it.  A friend of mine has 32 doors in what I would call D class.  He could write a book on reasons rent is late.  I can't write that book.  That's not my experience.

The 'problem', however, is that many of these investors, even newly accredited ones, really have no idea of the real risks they are signing up.  Add in, what I would call a low return for an elevated risk, & I don't see these types being a bargain for the first-time Cali landlord.  

They'd be better off buying their stock options with cash and selling covered calls.

Hard to understand the motivations of the buyer's agent here. One obvious step you can take is to lodge a complaint with this broker regarding the unprofessional treatment. If that does no good, you could take this issue to your real estate board for possible censure and/ or fine. In the end, if this is how they treat potential buyer's you wouldn't want to  live through a full-on transaction with them-that would be a nightmare.

Lessons learned?


Praise in public,..........criticize in private....If yyou're going to go down the path of naming specific companies and individuals you better be 100% on what you throw out there.  

Cool: Go ahead and make generalities (I.E. If a PM or broker reacted to you in this way, what would you do?) so you can use BP as a sounding board.

Not cool: This specific company was ......(#Clickbait).....Anyone worth their salt will defend their name and if you potray something one way,....and then documentaion proves perhaps otherwise then you weren't 100%. Move on (to another property).   

Originally posted by @Alan Grobmeier :

@James Wise , 'Alan clearly has a problem with buying low income high risk rental properties.'

The 'problem', however, is that many of these investors, even newly accredited ones, really have no idea of the real risks they are signing up.  Add in, what I would call a low return for an elevated risk, & I don't see these types being a bargain for the first-time Cali landlord.  

They'd be better off buying their stock options with cash and selling covered calls.

while I can understand that someone poor with little capital who drank kool aid on owning rentals has no choice but to buy ghettos marketed by bottom feeders, what I don’t understand is why anyone well-off from Cali would want to expose themselves to the risk of owning something that resembled the conditions in the third world or sub-Saharan Africa? Are these retired people with too much time and money, with no clue of the risk they are taking? Or are these people unaware of better investment options? 

@Tushar P. , I think they are dazzled by the glitz of 8-10% cash on cash returns that are usually touted in these types of pro forma.

But they never come to fruition in the long term.

Some of them, I have seen, are educated ppl that were drawn in by promises.  

Cali properties offer, at best, a 3-4% return, before expenses.  In many cases a property in Cali will require 50% to even cashflow!  As a result, the 'hoods of Ohio (and elsewhere) look financially attractive.

These types of properties are not for the faint of heart.  Many are old, not well maintained, have constant turn-over, or other issues.  There are reasons they are 'cheap'.

I think, in most cases, the investors are clueless.  

In the Clayton Morris situation the investor was never encouraged to come out, get a appraisal, a loan, or even a home inspection.  Just pay your $50k+ and see what happens, they will take care of it all.

In my case I ALMOST sold 1 of my properties to buy a 'few' in the midwest.  But then I started looking at the quality of the properties, quality of the schools, neighborhoods, etc., from a distance.  I didn't have to travel to figure out it was probably a bad deal & not my business model.

Originally posted by @Brian Garlington :

Lessons learned?

Praise in public,..........criticize in private....If yyou're going to go down the path of naming specific companies and individuals you better be 100% on what you throw out there.  

Cool: Go ahead and make generalities (I.E. If a PM or broker reacted to you in this way, what would you do?) so you can use BP as a sounding board.

Not cool: This specific company was ......(#Clickbait).....Anyone worth their salt will defend their name and if you potray something one way,....and then documentaion proves perhaps otherwise then you weren't 100%. Move on (to another property).   

  Well said!

Holton-Wise is a pretty big believer in caveat emptor. It's just the way they do business. It's like a snake oil salesman telling the purchaser, “you know I sell snake oil, right? You are the one who let me in so if things go south you have no one but yourself to blame.”

Years ago I had some discussions with one of the owners briefly. I got the impression very quickly that he has no interest in serving people, helping people, contributing to society, or doing anything that is not in his own self-interest. But what are people expecting?  There's a reason cheap things are cheap.  

He might very well be a bottom feeder but that's the business model he has decided to utilize.

The good thing about Holton Wise is their filtered MLS Search (like owner financing deals only) is really good. They also send right away the inspection report although I've never seen the house that's in good quality. Not to mention I enjoy the "Tenant from Hell" Youtube episode.

I think Holton-Wise could make a Netflix movie with the Title "Tenant from Hell". It could be a blockbuster you know.

Originally posted by @Patrick Britton :

Holton-Wise is a pretty big believer in caveat emptor. It's just the way they do business. It's like a snake oil salesman telling the purchaser, “you know I sell snake oil, right? You are the one who let me in so if things go south you have no one but yourself to blame.”

Years ago I had some discussions with one of the owners briefly. I got the impression very quickly that he has no interest in serving people, helping people, contributing to society, or doing anything that is not in his own self-interest. But what are people expecting?  There's a reason cheap things are cheap.  

He might very well be a bottom feeder but that's the business model he has decided to utilize.

 Our product is simple. We advise clients of the pros, cons, risks, and rewards of every property they are interested in so that they can make an informed buying decision based upon their goals, budget and risk tolerance. Problem with posts like yours, is you running your mouth when you aren't even familiar with the product we are putting out there. I have 100's of videos just like this one CAUTION Buyer Beware Investing in Cleveland Real Estate | MLS Search & Analysis 294 - 12527 Union where I advise my clients NOT TO BUY THE PROPERTY as it's my opinion that the risk level with the purchase is too high for their specific situation.

Originally posted by @Carlos Ptriawan :

The good thing about Holton Wise is their filtered MLS Search (like owner financing deals only) is really good. They also send right away the inspection report although I've never seen the house that's in good quality. Not to mention I enjoy the "Tenant from Hell" Youtube episode.

I think Holton-Wise could make a Netflix movie with the Title "Tenant from Hell". It could be a blockbuster you know.

 Lol thank you brother. As an FYI, Tenants from Hell was actually on Netflix before. We're on an episode of some terd named Hasan Minhaj's show Patriot Act.

@James Wise , I absolutely LMAO today on your new YouTube:  Previous evictions:  10 times it's ok to rent to a tenant with an eviction.

No & 'F NO' are the ONLY answers!


@Carlos Ptriawan    Selling naked puts is a little too much for me when it comes to risk tolerance....Heck even Bull Call Spreads have more risk than say...Bull Put Spreads...but I see your point playa'.   

Originally posted by @Alan Grobmeier :

@James Wise, I absolutely LMAO today on your new YouTube:  Previous evictions:  10 times it's ok to rent to a tenant with an eviction.

No & 'F NO' are the ONLY answers!


 lol. Thank you. Much appreciated.

@Brian Garlington , you only sell naked puts on stocks you MIGHT want to own.  And if you sell outside of the first standard deviation, you have about a better than 85% chance of winning.  And I LIKE winning! ;-)

If you 'lose', you take the stock and sell calls.  At a price above what you paid.  The premium you get will probably be north of 20% AROI AND probably a better than 50/50 chance of your shares being called away.

Alan you are proving my point my man. I don’t even want to be in a position to own the stock when I’m doing spreads .....


I have plenty of stocks and ETFs in my long portfolios for that. 😉

Originally posted by @Alan Grobmeier :

@Brian Garlington , you only sell naked puts on stocks you MIGHT want to own.  And if you sell outside of the first standard deviation, you have about a better than 85% chance of winning.  And I LIKE winning! ;-)

If you 'lose', you take the stock and sell calls.  At a price above what you paid.  The premium you get will probably be north of 20% AROI AND probably a better than 50/50 chance of your shares being called away.

In the bull market like the current one, I'm doing DITM puts (with far out expirations) in my Roth IRA for growth stocks that I want to own. 10-20% monthly (not annual) seems to be the average return, even if the stock gets assigned at any stage (at a lower strike than market price). But I deploy only 10% of the capital in the Roth IRA for the puts. The rest 90% is index funds, which have appreciated 22% annualized in the last 12 years (with absolutely zero effort).

I’m still investing in RE syndications, but real estate investment is a capital preservation strategy for me rather than capital growth. I don’t see how it can be the latter.

selling naked put is very very very profitable when you know most investor has average dollar invested more than the floor price.

Case study: Quantumscape that's owned partially by Bill Gates has recent secondary pricing of $40. The latest crazy MM push the stock to $39-41, that's heck of bargain deals. It's like selling Palo Alto home for $300k LOL :)

I sell naked $35,$40,$45..... cover when it reach $50.

Same with Tesla ha ha ha.... basically I sell naked when stock is under the floor price, even Bill Gates is losing money at that level ha ha :) LOL

Originally posted by @Alan Grobmeier :

@Tushar P. , I think they are dazzled by the glitz of 8-10% cash on cash returns that are usually touted in these types of pro forma.

But they never come to fruition in the long term.

Some of them, I have seen, are educated ppl that were drawn in by promises.  

Cali properties offer, at best, a 3-4% return, before expenses.  In many cases a property in Cali will require 50% to even cashflow!  As a result, the 'hoods of Ohio (and elsewhere) look financially attractive.

These types of properties are not for the faint of heart.  Many are old, not well maintained, have constant turn-over, or other issues.  There are reasons they are 'cheap'.

I think, in most cases, the investors are clueless.  

In the Clayton Morris situation the investor was never encouraged to come out, get a appraisal, a loan, or even a home inspection.  Just pay your $50k+ and see what happens, they will take care of it all.

In my case I ALMOST sold 1 of my properties to buy a 'few' in the midwest.  But then I started looking at the quality of the properties, quality of the schools, neighborhoods, etc., from a distance.  I didn't have to travel to figure out it was probably a bad deal & not my business model.

Keep in Mind James Wise videos describe the risks he is one of the few that actually does that.  Have to commend him for it for sure..  Morris has been called by others a  financial sociopath  And when you leave the trail of financial ruin he has then go to the blame game then to top it off LEAVE the country so trying to Sue him is next to impossible cost wise  .. I think you understand why people think that of him. 

 

Originally posted by @Carlos Ptriawan :

selling naked put is very very very profitable when you know most investor has average dollar invested more than the floor price.

Case study: Quantumscape that's owned partially by Bill Gates has recent secondary pricing of $40. The latest crazy MM push the stock to $39-41, that's heck of bargain deals. It's like selling Palo Alto home for $300k LOL :)

I sell naked $35,$40,$45..... cover when it reach $50.

Same with Tesla ha ha ha.... basically I sell naked when stock is under the floor price, even Bill Gates is losing money at that level ha ha :) LOL

The reason I don't sell naked is because I'm use Roth IRA. And the reason I'm using Roth IRA is because the profits from puts are always taxed at the highest possible rate.