Clayton Morris Podcast
Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
Clayton Morris Podcast
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Chris ClothierBusiness Member
Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes@Aaron Mazzrillo you don't need my advice on a yes or no, but for the other readers on here, the biggest reason not to go on a show like this is to be sure you do not lend your credibility and voice before the other person has earned it. It makes sense for him to reach out to high influencers and ask for them to join him because it boosts his credibility. It makes more sense to do it on BP since his target audience is a new investor that does not know any better.
Being #1 on iTunes does not mean a thing and there are absolutely legitimate concerns raised by many, many seasoned investors and TK companies when reviewing his website and program.
On a separate forum, it was noted by someone who has known him for a while, that he is a good person and his wife is a very active writer on financial websites. So I am sure that they are not intentionally trying to hurt anyone. Unfortunately, his own website gives almost no information about anything. What it does say is that he started investing in real estate a very, very short 5 years ago.
That is not even enough time for any properties he has owned himself to build up any type of conceivable track record to build data from. That is not enough time for him to have learned the ins and outs and he has yet to experience a market shift. He has been investing during the sunshine and rainbows. Others have commented that they were told by him that he has no vacancies and has figured out how to keep costs at 40% of gross rents. All while keeping his rents at gross multipliers of what looks like 1.5+. The magic kicker for every experienced investor is that he is doing this on an average price point of $40,000 AND that is an all in turnkey price.
Any serious investor who knows about Turnkey real estate would never go on a podcast like this without taking serious objection to the fact that they have no idea what they are talking about. If any of those numbers are true, then he has somehow figured out how to go from newscaster to master real estate investor in five years and is outperforming even the best real estate investors and the top turnkey companies out there who have years of experience and knowledge on him.
Unfortunately, the reality is, his investors are in for a rude awakening when their expectations simply cannot be met over time. Again, I would want to give him the benefit of the doubt and just say he is using way too much spin and painting the wrong picture, but people are going to get hurt buying these properties at these prices expecting the type of results that have been attributed to him.
Last note ~ it is also a bad sign that many of the posters who have said good things have very few posts to their credit. Many have said they are brand new investors and I have yet to see someone post about actually having bought and owned with this company. I have not seen a post from him or anyone from his company so much of the spin is being created on here by people stating what they were told by him. It just doesn't look good.
38 Replies
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
OH ya
@Chris Clothier @Aaron Mazzrillo you guys will love this.. when one person posted the cease and desist on Oceanpointe on BP... .the owner of oceanpointe called that guy and right on the phone threaten to KILL HIM... Wild.. he turned it over to the cops.. soap opera with poor newbie investors caught in the cross fire.
- Investor · Kirkland, WA · Member since 2017 · 310 posts · 271 votes8yIt was posted by @Todd Burton 5 days ago in theOceanpointe Investments LLC thread. Sorry, I don't know how to post the link directly... if that voicemail is legit though it's bone chilling.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
https://www.biggerpockets.com/forums/92/topics/523577-oceanpointe-investments-llc
here ya go .. about half way down the first page of the thread.. todd burton is the guy who posted it.
and KUDO"S to BP mods for not taking it down.. the public needs to understand who and what these guys are...
- Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes8y
To Jay and especially turn key buyers,
I never knocked Morris, because I'm not in the business to do so. However, when someone asked me my opinion, I would tell them privately. We work in Northwest Indiana, which is near Chicago. Rarely do we offer investors turn key properties. They're typically over priced and hard to find. But there are some "decent" deals out there. Just because it's "turn key, " doesn't mean it's a rip off. But you'd better be careful. It's the company that you deal with, that matters. That's the key. Many of you don't have a contractor or a property manager, to complete an out of state deal. That makes it difficult to buy. I get that. But you MUST complete your due diligence! I can't tell you what my company does, or BP will flag me for advertising. But find a company that works with a quality property manager, a quality contractor and go from there. Look for a company that has the tools you'll need as an investor, to be successful. One last thing. A "cool" website and a professionally made website can be made by anyone. Don't let that take you in. Any schmuck can put together a nice looking website. It means NOTHING! The proof is in the investors that have been happy with their purchase and are happy with the company they went through. Ask others before you buy from anyone. Believe it or not, there are quality wholesalers out there. Not many.....but there are some. You just have to find them! Best of luck to all.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Scott Steffek this is not a wholesaler issue at all.. I have spoken to the bigger wholesalers in Indy that were feeding these guys their inventory.
its the business model.. buy the cheapest home in the hood you can find.. do little or very POOR work. and then duck.. use a guy that has star power from other industry and social media.. to get credibility when he has next to zero experience in real estate .. have him create a rich dad poor dad illusion of grandour and then use used car sales tactics.. and then market to newer investors.. and there you go.
But then you get this guy Tyler Jehnke who by chronicling just getting a rent check caused a bunch of people to leap into these deals.. and of course some will work .. but so many have been burned badly we only see a small sampling of those folks because most people that get burnt are embarrassed and just don't post and just go dark. And the wholesalers will be direct mailing them and as their houses sit there vacant they will deteriorate a for real contractor comes in and gives a for real bid.. Investor just says sell.. puts it on MLS can't get anywhere near what they paid and ends up selling it to a wholesaler for what the wholesaler paid for it a few years ago.. ( next to nothing) and the cycle repeats.. I know I see the HUDS for gosh sakes..
You have the other end of the spectrum.. and Investor named Lance Robinson is posting about his success in turn key.. he called me a few years ago and we had a nice discussion.. and like I tell everyone buy at the top end of the market not the bottom he did that and his experience in TK in INdy has been wonderful.. its just like were you live Scott.. you can buy Crown point and have a nice experience or you can go to Geary and maybe not so much.. !!!!! AS an out of state investor.
- Investor · Plymouth, MI · Member since 2016 · 48 posts · 70 votes8y
I want to chime in as a property manager that helps to place tenants and collect rent on over 3,000 homes over about 28 states, many that we have an interest in. We are based in Metro-Detroit so I want to offer some perspective on that market in particular. Below is how we rate homes and what an investor can expect. This same scale applies to all US markets, but the dollar amounts may slide around a little. We found schools and crime are good indicators of the market rating.
A Market - schools are 8/9/10. Low or no crime. $400K and up. expect 3 to 4 CAP and possible 4 to 6% appreciation. Homes are filled in a week or two with 720 credit scores. 720 score is a 1 in 800 default risk. Rents $2,500 plus.
B Market - schools are 5/6/7. Low Crime. $150K to $400K and up. Expect 4 to 6% CAP and possibly 4 to 6% appreciation. Homes are filled in a week or two with 650 credit scores. 650 score is a 1 in 400 default risk. Rents $1,500 plus.
C Market - schools are 2/3/4. Crime is high. $75K to $150K. Expect 6 to 10% CAP and possibly 3 to 5% appreciation. Homes are filled quickly, however, we often have to wait a little longer to find acceptable credit. 580 to 650 credit normal. Default at 580 is 1 in 4. Rents in the $800 to $1,500 range.
D Market - Schools are 1 and very poor. Crime is high - POLICE DO NOT SHOW. $20K to $75K. Expect 12 to 30 CAP with depreciation in pricing in some areas, or limited possible upside. sub 580 likely making default rates rise to over 25%. Rents in the $650 to $850 range.
It is our finding that the real stress-free home is more in the C - Market area and up. A and B are nice homes, but often don't get the returns needed. We have accidental landlords in those areas or people that are betting on appreciation. Appreciation is fine, but it isn't the bet that most "technical" real estate investors look for if you want to hedge a potential downturn.
The issue is the D properties. In some cases, it is a great investment but there really needs to be a level of caution that even at a $75K or $100k home doesn't need to exist. In D areas, police don't show up. In D areas, evictions are a joke and judgments worthless. In D areas your home will be looted in broad daylight and no police will ever show even if you make a report... they will just tell you they are busy with other things. In short, basic functions of government and society that we take for granted, education, police, law... they are not existing here. We have to pay our contractors double in some areas as they won't go alone (understandably). Often, contractors will drive to the home and leave saying they just can't do it. We had a contractor in Chicago helping to paint a home, his car got carjacked... he had to jump into the car tossed the guy out and ran over him with the car and went to the police station. The guys that tried to rob him, showed up claiming it was a hit and run. It's nuts! If you are not ready for that... you are not ready for D properties. The pros get it... they are sympathetic and see evictions, looting, squatters... all that as par for the course. The newbies are often in shock and awe. I can't say I blame them... but these areas do not have a functioning police force and law system so don't be surprised if the rules are not followed.
I think the frustrating part for us as a manager is that moving upstream to a $75K to $100K home can take 95% of these issues away. In Metro-Detroit, there are some great suburbs that are working class but have decent schools and police that will be there if there is an issue. They are good areas, just starter homes that are a little smaller but nice. Most markets we operate in have this same dynamic. Instead of paying cash for a $20K... putting $20K down on a $100K home will have huge advantages. Generally, C homes will return the results you expected. They will get you that 8 to 10% CAP rate and a little appreciation to boot.
I think that Clayton is a good guy and has the best of intentions to help people gain financial freedom. I happen to believe that. I also think he is putting in a good effort to make it a good seamless process and set up trades and vendors for people. I think the model that they are using does work. People can make great money in the hood. However, as a property manager that ends up having to take care of the issues in tough areas, I can not express how much I wish these buyers would move just a little upstream.
Perhaps this post helps a newer investor pick a $75K or $100K home... not a $20K home to get started. The older, wiser, richer you will thank the now you. I will also thank you as a property manager!
- Austin · Member since 2015 · 149 posts · 80 votes8y
It's kinda weird to see people ripping on someone who was a guest on the podcast. If he was a scammer shouldn't they remove that episode or put some kind of advisory up on it?
I'm not sure what the deal is with the oceanpointe thing - what exactly has Morris been accused of and what has been proven?
I'm seeing several things said that don't match up with what Clayton says in a lot of his videos such as:
- Saying the properties aren't C's. He says over and over that he picks C's on purpose
- Saying they do poor rehab work. Where's the proof of that?
- Saying they purposefully push out phone schedules as a scam. Where is the proof of that?
- Sloppy closings - where is the proof of that?
- mention of 20% returns. He says over and over that he shoots for 10% to 12% returns
- That the returns he talks about are too good to be true. I understand the concerns around $40k properties but is 10% to 12% on a $40k out of pocket expense really *that* impressive? I thought it was good for sure but I've seen plenty of deals in other places that were better than that on paper.
I don't have any association but I talked to Clayton a couple years back after hearing him on podcast. Never pulled the trigger on buying a property. I also have been looking again recently. I scheduled a call today and they had slots available next day.
I also am still doing research on Morris not sure if I'll pull the trigger...
EDIT: In doing more searching I came across this thread with some specifics on a bad experience someone had with Morris. (https://www.biggerpockets.com/forums/92/topics/552021-morris-invest-experience-yet-another-one). Good to see some more objective specifics.
- Tacoma, WA · Member since 2018 · 230 posts · 257 votes8y
There are multiple threads on BP with evidence of the poor rehabs, D properties, etc. Keep researching. Sure, a lot of it may have had to do with Oceanpointe, but shouldn't people like Clayton Morris bear some responsibility for making sure their network is delivering on the product they are selling?
Here are a couple eye-opening threads, but there are many others. I particularly like the blank profiles with just one post defending Morris Invest and Oceanpointe.
https://www.biggerpockets.com/forums/92/topics/392727-morris-invest-case-study-20
https://www.biggerpockets.com/forums/92/topics/523577-oceanpointe-investments-llc
- Austin · Member since 2015 · 149 posts · 80 votes8y
Thanks for the links. Yeah I get it now. Kinda feels like BP has a responsibility to post some kind of advisory to the podcast episode he was on because I see that as a pretty strong endorsement for someone in this community.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Kalen Jordan BP did take down his pod cast ... this is not the first guy to do this and wont be the last those homes are traded back and forth from failed landlords for the last 25 years.. and will be for the next 25 to 50 years until they crumble..
- Fredericksburg, VA · Member since 2016 · 190 posts · 64 votes7y
The latest in case someone missed the other thread(s).
- Santa Rosa, CA · Member since 2017 · 325 posts · 701 votes7y
Amazing article. I just cross posted it on the OceanPointe Invevestment LLC thread (giving you credit). Just terrible stuff, I was most amazed by the selling of a house that had burned 4 days earlier. There can be no justification for that.
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