REI nation is nontrustworthy

46 Replies

Wanted to get others opinions about turnkey company, REI Nation or Memphis Invest. It has been a disaster for me, but wanted to get other's opinions before I share my story. I will post stories over next couple days, but for my 3 houses (Memphis, Houston and Dallas) that I had with them over the last 3-4 years, it involves a house fire in Dallas, and a murder in the garage in Houston. Would never trust these people as fiduciary of your money. The tenants they chose for me are a compete joke. House destroyed so badly my real estate agent was afraid to go in by herself this summer when I tried to sell. Will post video and pics of the shape it was left this summer after tenant moved out. Needless to say, the neighbors were ecstatic for me to take away from REI nation and sell.

Will post more but wanted to get other opinions before doing so.

Thanks

Originally posted by @Tim Hamby :

Wanted to get others opinions about turnkey company, REI Nation or Memphis Invest. It has been a disaster for me, but wanted to get other's opinions before I share my story. I will post stories over next couple days, but for my 3 houses (Memphis, Houston and Dallas) that I had with them over the last 3-4 years, it involves a house fire in Dallas, and a murder in the garage in Houston. Would never trust these people as fiduciary of your money. The tenants they chose for me are a compete joke. House destroyed so badly my real estate agent was afraid to go in by herself this summer when I tried to sell. Will post video and pics of the shape it was left this summer after tenant moved out. Needless to say, the neighbors were ecstatic for me to take away from REI nation and sell.

Will post more but wanted to get other opinions before doing so.

Thanks

Are you saying REI Nation set the fire and committed murder? Seems unlikely.

Im sorry you didn’t understand. I’ll bring it down a level for you. They placed the tenants in there. As a fiduciary of my money they should be better at choosing tenants that don’t ravage the housemaid make it in marketable. Will be happy to provide the RE agent (one of tops sales in Houston area) to you that said “in her 20 years she’s never seen a s house left in such disarray.”

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Don't know much about them, but most here on BP seem to sing their praises here about REI Nation. Owner or top management does often respond to comments here if you have not already discussed with them.

I think one trick is that many investor looking for TK hands off type projects have certain numbers they want to hit.  To make the numbers work for what investors have been told they need to focus on, it is often not the best houses or best neighborhoods...maybe even the opposite.   So these types of properties can draw a little rougher crowd like you have experienced.  The trick is if you want more stable corporate type tenants in better neighborhoods, the returns are likely lower to account for the reduced risks.  Always a tradeoff.

I also find many investors looking for TK want 100% hands off "easy" real estate.  I don't think there is an "easy" way.  You're dealing with people, so sometimes it is smooth sailing.  Just found out house about 5 doors down and across the street from me was raided by DEA and occupants hauled off.....including the driver of the camouflage Masarati....house was a rental and always seemed like occupants did not fit the neighborhood.   Guy also had one of those old tank convertible Cadillacs with the bull horns mounted on the front.   Most people here park in the garage and don't drive flashy cars.   One of the not so easy parts is making sure your PM doesn't want just any tenant to generate the lease up fee, but also wants to protect your investment with properly screened tenants....conflicting interests...

Sorry for your trouble and hope you are able to reinvest in some gems...even if you have to go more hands on.

Thanks for input Bruce. This has been helpful. This is why I asked for input from others before I send out the full story with photos/videos (if that is even possible on here, I never post). If I have simply had a fluke terrible experience with them.... I will shut up. I am simply trying to protect others from making terrible decision I did. I spend my career taking care of people as a surgeon and I am very fortunate that I can afford small losses like this, but I know a lot of people read their flyers, and watch their youtube videos and sign their retirement money over to them. Personally, they were atrocious for me, but maybe just a fluke. I felt an obligation to educate others if they had similar experiences. Hell, if the rest of the responses are like yours, I'm going to shut up and not respond anymore.

By the way, I got involved with REI in April 2016. Since then, I have spent a lot of money (and time) on education with classes, mentors and groups. There is a way of passive investing in RE outside of TK SFHs. I have done extremely well in the last 2-3 year, and very happy with returns. I vowed to never buy another investment TK SFH years ago, but had to wait for leases to expire before selling. I truly from bottom of heart hope that most have had a great experience, and I don't post again like I haven't posted in last couple years. Just want to protect others. I appreciate your input, and hope they are are reputable people with sincere desires to help others.

Originally posted by @Mike Hern :
Originally posted by @Tim Hamby:

Wanted to get others opinions about turnkey company, REI Nation or Memphis Invest. It has been a disaster for me, but wanted to get other's opinions before I share my story. I will post stories over next couple days, but for my 3 houses (Memphis, Houston and Dallas) that I had with them over the last 3-4 years, it involves a house fire in Dallas, and a murder in the garage in Houston. Would never trust these people as fiduciary of your money. The tenants they chose for me are a compete joke. House destroyed so badly my real estate agent was afraid to go in by herself this summer when I tried to sell. Will post video and pics of the shape it was left this summer after tenant moved out. Needless to say, the neighbors were ecstatic for me to take away from REI nation and sell.

Will post more but wanted to get other opinions before doing so.

Thanks

Are you saying REI Nation set the fire and committed murder? Seems unlikely.

 We in the biz have a saying........"you aren't really a landlord until there is a murder at one of your properties."

Man I remember my first murder like it was yesterday....Good times.

@Chris Clothier is pretty active in the forums and I suspect he will be willing to dig into this situation. I have never used REI Nation, but I have generally heard good things and had only positive interaction with Chris. They are a large company that manages thousands of properties in different locations. They are probably one of the largest property management companies in the country. I would assume a company that size has consistent screening standards and procedures. Of course even with the best practices, fires and murders will happen. I have had fires in my properties and my landlord friend just had one last week.

Please share your story. Put your experience out there and lets dissect what went wrong. 

I would be interested to hear what type of properties these are, meaning are they C class or A class properties and locations. As far as the tenants themselves, did you receive any screening details when they were placed? Did the tenants pay rent on time while living there? How long did they stay in the property? Did the property appreciate in value over the five years? Did rents increase?

Did you raise concerns to REI Nation and if so, how did they respond?

Did you consider just changing property managers, rather than selling the properties?

Tim,

I tried to contact you earlier today as I always do in these kinds of forums. I genuinely want to make sure I understand the reasoning for your post. In this case, unfortunately we haven’t connected yet and knowing you hadn’t responded to Nate Gray on our team either, I felt it was appropriate to just address your comments here. Unfortunately, I can’t let a post like this sit on a forum unanswered. You titled it that we were untrustworthy which is unacceptable to me. Our reputation, our credibility and our integrity matter more than anything. When we are wrong, we accept full responsibility - even publicly. When we are not, we need to make sure a proper response is posted. I won’t share personal info or actual dollar financial data, but will be happy to share it with you if you’d like and happy to go over it with you. Feel free to return my call.

I think the best response I can give here is that the mistake we made was we should have directed you in 2016 to not buy single-family homes from us and instead invest in a passive REIT. You are probably an excellent surgeon, but your expectations are a bit off as a single-family, passive investor. There is not a single experienced investor on this site that would pass on the opportunity to have had your return and even experience over the past five years. You purchased three properties passively and earned a positive return annually on all three properties and then sold all three properties for double digit appreciation. Two of the properties had very strong appreciation with one appreciating annually by double digits.

The two issues you faced were serious but also anomalies and outside the control of any management company. A resident lost their life in the home after living in it for 8 months. Loss of life like that was a first for us. While that was certainly not our responsibility it was within the first year, so we placed a second resident who stayed for 4.5 years at no cost to you and within 30 days. You literally did not suffer a vacancy at this property in the five years you owned it.

Your property that experienced a fire from a candle lit in a bedroom, occurred in year three of a lease where a resident had an excellent rental history with you. It occurred in August and we had the repairs completed and the property leased and occupied by December. We also worked with the insurance company on your behalf, which was a policy that we had put in place for all of our owners and you were reimbursed for all repairs, loss of rents and other incidental repairs. You received the security deposit from the resident and actually received more in insurance and deposit than you lost in repairs and lost rents. You literally made money after an accident by the resident.

As for a resident that is rough on a property, I have seen the pictures of your property. I’ve also seen worse. It can happen after 4.5 years of occupancy, but it all eventually factors into your over-all return which as you will read, yours was excellent.

All three of your properties were occupied by on-time paying residents and every resident completed their lease in full with the exception of the one who lost his life and the other who lost some of their belongings. Our customer service team called you every month for 55 straight months even though you rarely answered their call. You are a busy person with an important job and it is your prerogative to not answer that call, but the intention of calling every client every month - even on the boring months when there is not much to report - is so that when unexpected events occur, you know that our team is behind the scenes handling everything for you.

I literally do not know how much more a turnkey investment company or a property management company has to do to earn someones trust. We went above and beyond to build a relationship with you as an investor. Your residents paid on time and completed their leases and even extended them. Our management team even stepped in and waived fees during extraordinary circumstances. You earned a positive return annually on each property. You most likely earned a double digit return annually although I do not have access to your mortgage so I can only give a best guess based on the actual data of net rental payments sent to you each year. And finally, you not only sold every property for a higher price, but based on using leverage, your IRR is most likely well over 20% annually strictly on a capital return. That does not take into account any other benefit of ownership including principle reduction from your resident. My educated guess from over two decades and dealing with roughly 7,000 single family homes is that your 5 year return is in the neighborhood of 110%+.

As for the comments to our customer service team yesterday to write a scathing review on BP and to settle the final $300 or so that you owe to the management company in pennies, that is perfectly fine. I believe our services are worth every penny we can get and we welcome scrutiny on BP. We built our reputation on this site. We openly own up to our mistakes when we make them - and we do make them, but in this scenario, I just can’t find any.

Again, I’m happy to jump on a call with you. You seem very happy with your returns in other investments and that is fantastic. It validates my first statement that we may have failed to recognize you were better suited for an even more passive investment, but that is very hard to figure out on the front end. Best of luck as you move forward.

No murder but a few weeks ago I was inches away from a death by overdose. Three ambulances and five cop cars outside my duplex.

Two years ago, I almost had a death by massive blood loss. The reason I didn't is because I held the guy's arm together until the paramedics showed up.

At some point, @Tim Hamby , if even half of what @Chris Clothier has documented above is accurate, you really need to ask yourself if real estate is right for you.

Chris is lying. Please look up the house I CURRENTLY own in Memphis, not sold like he said.  Here is the link to the house in shelby county, documenting his lie. It is in my entity and it has not sold. Chris did tell the truth that I did make a profit on the Dallas house. On the houston house, I brought $47,555 to closing  7/29/2016, and walked away with $50,089.28 this summer. That is far inferior to my other 17 RE investments (mostly MFH, and ATM syndications.) Again, here is the link that anyone can check to see who is lying:

https://www.assessormelvinburg...

I gain ABSOLUTELY NOTHING  by posting this other than getting criticized for my English as I was posting on my phone between surgeries and autocorrect got me, or being told I don't belong in RE.  I grew up lower middle class and am extremely blessed to have other people trust me with their healthcare.........I simply post (and look at my record, I NEVER post) to educate the hard working middle class man/woman so they can research, educate themselves and not fall for salesmanship and lies.

For those that want to criticize me, go for it. I am ok with that if I get one family to educate themselves it was worth it


Thank you

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Originally posted by @Jim K. :

No murder but a few weeks ago I was inches away from a death by overdose. Three ambulances and five cop cars outside my duplex.

Two years ago, I almost had a death by massive blood loss. The reason I didn't is because I held the guy's arm together until the paramedics showed up.

At some point, @Tim Hamby , if even half of what @Chris Clothier has documented above is accurate, you really need to ask yourself if real estate is right for you.

 Where you doing drugs with the tenant Jimbo? I've got a strict policy against this. It's like crossing swords in the bathroom, it's just awkward for everyone if it's done during business hours.

Originally posted by @James Wise :
Originally posted by @Jim K.:

No murder but a few weeks ago I was inches away from a death by overdose. Three ambulances and five cop cars outside my duplex.

Two years ago, I almost had a death by massive blood loss. The reason I didn't is because I held the guy's arm together until the paramedics showed up.

At some point, @Tim Hamby , if even half of what @Chris Clothier has documented above is accurate, you really need to ask yourself if real estate is right for you.

 Where you doing drugs with the tenant Jimbo? I've got a strict policy against this. It's like crossing swords in the bathroom, it's just awkward for everyone if it's done during business hours.

 Hey Papa Smurf, who I chose to do drugs with and how is all my own business. I have no interest in your slippery little blue oyster knife and your policies for what you do with it. I'm Greek, OK, sure, but not THAT Greek.

Originally posted by @Jim K. :
Originally posted by @James Wise:
Originally posted by @Jim K.:

No murder but a few weeks ago I was inches away from a death by overdose. Three ambulances and five cop cars outside my duplex.

Two years ago, I almost had a death by massive blood loss. The reason I didn't is because I held the guy's arm together until the paramedics showed up.

At some point, @Tim Hamby , if even half of what @Chris Clothier has documented above is accurate, you really need to ask yourself if real estate is right for you.

 Where you doing drugs with the tenant Jimbo? I've got a strict policy against this. It's like crossing swords in the bathroom, it's just awkward for everyone if it's done during business hours.

 Hey Papa Smurf, who I chose to do drugs with and how is all my own business. I have no interest in your slippery little blue oyster knife and your policies for what you do with it.

 I would like to thank you for acknowledging that of all the possible smurf names, Papa was the correct one.

Not saying who’s lying or not, I don’t have a dog in the fight. A hyperlink to the assessors page is not evidence in my opinion. Recorders in a ton of counties nationwide are running way behind. Which is why anyone that has closed in last few months had to sign a paper agreeing not to put liens on said property before recorders have transferred public ownership. It’s taking 90 days+ in areas.

@Tim Hamby ,

I'm not here to try and embarrass anyone or throw rocks back and forth.  Everyone gets to set their own parameters for judging the success of their investments and somehow we missed yours.  I will however, clear up my earlier statement just since we are dotting all of the i's and crossing the t's.  Being called untrustworthy is bad enough, but when someone calls you a liar, well, let's make sure we get this right.  

You are correct that you have one property where the sales contract has not closed yet - the Memphis property. It is sold, just not closed. It is currently listed in the MLS as pending closing. It is the one you have listed at a 38% premium over what you paid 5 years ago. It is also the one that was vacant for exactly 30 days between a three year lease and a two year lease in 2019. So you lost exactly one month out of 60 to vacancy. When it closes, which I hope for you that it closes soon as it appears it had multiple offers, you should reap an approximate 150% return...in just over 5 years.

I sincerely hope that when it closes you take your returns and reinvest in something that you trust and that investment gives you an even greater return.  Best of luck as you go forward.

I am not here to embarrass anyone either, think most readers will determine that is occurring on its own. 

I am here to post facts and protect. Maybe you are not lying, and are just factually incorrect. So I will "clean up" more of your misstatements about the Memphis house in the second post without even addressing your factual misstatements in the first novel you wrote.

The Memphis house went under contract August 10 to close at end of August. It got delayed and had to sign a second contract/amendment to close end of September for less money (which is clearly not your fault, and I accept that responsibility for accepting the purchaser, but want the FACTS to be 100% correct.) That contract did not close (Again I ACCEPT responsibility for that). Last night about an hour after my last post, I signed a new contract to close Oct 26, 2021. So as of this morning you are correct, it is under contract. Last night when you had no idea I was going to sign it, you were lying, or blissfully ignorant. Either way in healthcare this is called malpractice and patients can die.  In your position of being an owner of a company taking people's hard working retirement money you need to be correct before spouting off things you have no idea.

I will give REI credit where due. They had extremely low vacancy during my 5 years with them. Memphis house has been good tenants. Houston and Dallas, well see above. Personally I would've taken a little more vacancy to not have a tenants murder in my garage, thus decreasing the value of my house by $20-30k to other comps, or a tenant burn the house.

Trustworthy? Let the people decide

Originally posted by @Chris Clothier :

@Tim Hamby ,

I'm not here to try and embarrass anyone or throw rocks back and forth.  Everyone gets to set their own parameters for judging the success of their investments and somehow we missed yours.  I will however, clear up my earlier statement just since we are dotting all of the i's and crossing the t's.  Being called untrustworthy is bad enough, but when someone calls you a liar, well, let's make sure we get this right.  

You are correct that you have one property where the sales contract has not closed yet - the Memphis property. It is sold, just not closed. It is currently listed in the MLS as pending closing. It is the one you have listed at a 38% premium over what you paid 5 years ago. It is also the one that was vacant for exactly 30 days between a three year lease and a two year lease in 2019. So you lost exactly one month out of 60 to vacancy. When it closes, which I hope for you that it closes soon as it appears it had multiple offers, you should reap an approximate 150% return...in just over 5 years. That fantastic return is only achieved through the outstanding efforts of the entire REI Nation team.

I sincerely hope that when it closes you take your returns and reinvest in something that you trust and that investment gives you an even greater return.  Best of luck as you go forward.

Chris very professional responses to an unwarranted personal attack  take the high road like you always do its impressive.

The bottom line fact is not everyone is cut out to be a Landlord it takes a certain amount of understanding about how our renters who are our clients live their lives. 

I find it curious that this OP would take his valuable time to write this kind of post its not going to change his outcome and I am certain he has better things to do. 

It always amaze's me in real estate many investors could have bad stock picks and they are not bashing the stock market per se our calling out their stock broker.  but geez you do anything that is not perfect in the real estate realm and all of sudden you get this attitude like we see here.

Again very good professional responses  keep up the good work. !!

Wow, that sounds like fantastic PM from @Chris Clothier and REI Nation. If all that had happened in my properties, I would be thrilled with that response. If the residents were paying on time, extending leases, and only left a property due to a break-in and, well, DYING, there's not much else any company can do.

@Tim Hamby , yes, you want a hands-off investment, but at the same time you have to learn more about how Real Estate works at the ground level. I'm assuming the rest of your properties are also turnkey and that you have no personal management experience. As Investors, we have to deal with the Human element, just as you do with your patients. I say this as a former Physical Therapist who worked in Home Care for years. I have seen everything regarding how people live from urban and rural poverty to top 1% mansions, and people do crazy stuff sometimes. A Property Manager simply cannot control that. If an applicant looks good on paper, meets all the criteria, and everything checks out with background checks/employers/etc, there's no reason not to rent to them (not to mention Fair Housing laws). 

You also have to have a basic understanding of the area these houses are in. Yes, a turnkey company will give you all the information they have, but you have to do your own homework as well. If these houses were in D class areas, and you didn't ask "what kind of neighborhood is this house in?", that's on you. I've seen people come to Toledo and buy a house with a turnkey company for $50k in a D class area where they are worth maybe $25k, and are upset that they can't sell for $50k. They had no clue about what neighborhoods were like here, because they didn't ask. 

It appears you were just unlucky with these couple houses, but it doesn't sound like you were wronged in any way. Dust yourself off, and move on to the next one. 

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