Memphis Terry Brown warning

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Memphis Terry Brown warning

Dean Letfus
Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes

Before we took control of our own acquisition one of our earlier suppliers was Memphis Investment Houses and their property management company owned by Terry Brown. Terry appears to have skipped to Chicago, (according to his facebook page) with tens of thousands of dollars of our clients rent money.

We have tried for a year to get clients rents paid to them and severa clients have legal action underway

So be warned, don't go near MIH, Memphis renters daily or USA prime properties.

And if anybody knows where the money is or where Terry is hiding we would love any info.

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Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
12y

Gautam,

If an investor is paying all cash or using private financing, appraisals are not required so then it is up to the investor to have and pay for an appraisal. The company selling the home should also be able to provide comps to the buyer.

The big question here though it what is considered over paying? If I sell you a home for say $75k that rents for 850 and another company sells the same home for $85k that rents for $850, does that mean you are over paying? Homes are worth what someone is willing to pay for them. What if the more expensive option did a nicer renovation. There are a lot of factors to consider. You need to come up with a formula that works for what you want and try to stick to it. Good luck.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y

    @Gautam Venkatesan

    I just noticed a post you made in AU about some thing you invested in years ago that I guess went pear shaped how did that turn out.. And what country was it in... As MR. Davis alludes to.. properties that are bought off of MLS not financed with banks.. the purchase price become willing seller willing buyer.. And or Deceitful seller unsuspecting buyer.. Its caveot emptar in our market when you buy FSBO

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  • Gautam Venkatesan
    Investor · Dallas, TX · Member since 2013 · 619 posts · 128 votes
    12y

    @Jay Hinrichs - I think you have me confused with someone else. Not sure what post you are referring to but I have not made any international property purchases.

    0Reply
  • Gautam Venkatesan
    Investor · Dallas, TX · Member since 2013 · 619 posts · 128 votes
    12y

    @Curt Davis and @Engelo Rumora

    thanks for the explanation makes more sense now.

    0Reply
  • Donald Stevens
    Detroit, MI · Member since 2009 · 114 posts · 40 votes
    12y

    This is a good example of why a you want your property manager to carry a bond for rents collected on your behalf. You should always ask your property manager to provide proof of insurance for liability, workers compensation, bond, and E&O. Those four in my opinion are mandatory because if the PM doesn't have those coverages you will be providing it out of pocket.

    1Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    12y

    @Dean Letfus - Sorry for the late response today, but I had our team checking a few things, so I would know what I was talking about before answering. First, he would have had to have E&O insurance to have a TREC broker's license and that is a requirement to manage property. E&O will most likely not cover this, but you can check his credentials with TREC and see if he had it on file and who they show his insurance was through. Second, he may have carried General Liability, but if he was in financial trouble it may have lapsed. However, if it was in force when the theft took place, then they may be obligated to cover the theft. Real good possibility that whomever provided his E&O is who he would have had General Liability as well.

    I found out that in Tennessee you are not required to carry General Liability to manage property. We carry it plus a rider for theft and fraud such as accounts being compromised by someone else. I don't know who else manages your property, but I am sure a big company like Reedy, having been doing this for so long, has you covered going forward. Still, I was wrong when I said it was required - apparently it is not.

    Lastly, I don't know if you have filed a police report or had any of the other owners file one. We did in 2005 along with many, many other owners. It was the only way to pressure for the payments. You may want to look into it. I would imagine that is the only way the insurance company will pay if he had General Liability in place.

    I agree with @Donald Stevens ' statement about coverages for any other readers. Most good management companies will carry these to cover their own backsides - not just their clients - so it is a definite to ask for.

    Dean - I sent you a PM. Take a look when you can. I really do hope you get this worked out for your clients and like you said, you are in better hands now, but that doesn't help with lost dollars.

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  • Dean Letfus
    OP
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    12y

    Thanks @Chris Clothier , nothing in my inbox as yet from you.

    0Reply
  • Dean Letfus
    OP
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    12y

    From @Curt Davis

    "The big question here though it what is considered over paying? If I sell you a home for say $75k that rents for 850 and another company sells the same home for $85k that rents for $850, does that mean you are over paying?"

    Thats the wrong question I think. If a street is worth 75K then the answer is yes the buyer is being ripped off. Over rehab does not justify charging above the houses value. It means the rehabber doesn;t know what he or she is doing. A 75K street is a 75K street.

    If companies got this in their head they wold have a lot more repeat business. Leave some equity in the deal = happy clients.

    0Reply
  • Alex CraigBusiness Member
    Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
    12y

    I am just reading this. All I can say is WOW! Dean, do you know if he has really skipped town? I only met Terry a couple of times, but knew he was ripping people off when I read one of his marketing paragraphs for a home he was selling. If I recall, the house was on Par St in Frasyer. His marketing paragraph said something to the effect "Great home 15 minutes from the Trolley Tracks of Downtown Memphis near great jobs." LOL, no one in that area is working downtown, much less taking the trolly.

    Sadly, this is not the first time I have seen this happen. We had a investor reach out to us last year after Marvin Fisher and Axis Properties took everyone's money last year.

    901-848-9028
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  • Bobby Beard
    Real Estate Investor · Panama City, FL · Member since 2012 · 265 posts · 58 votes
    12y
    Is terry brown originally from Jackson ms?
    0Reply
  • Terry Brown
    Real Estate Investor · Cordova, TN · Member since 2013 · 10 posts · 0 votes
    12y

    It seems Dean is a bit confused. I do not live in Chicago and never did and I am not hiding. Maybe you have me confused with someone else?

    0Reply
  • Dean Letfus
    OP
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    12y

    Well your facebook age says you moved there last week and we have 2 attorneys involved in legal action trying to get our clients money. So if you are home and not hiding we look forward to finally getting a response from countless unanswered emails and phone messages and even messages from your own staff trying to get you to fix this.

    When is the more than 12 months of rent collected by you being paid to its owners????

    0Reply
  • Terry Brown
    Real Estate Investor · Cordova, TN · Member since 2013 · 10 posts · 0 votes
    12y

    Alex...I have never had a house on Par! Everyone knows that's a bad area. I don't appreciate your slanderous statements. Where are you getting your information? All incorrect. I suggest you stop making slanderous comments about me. Maybe we should talk at MIG tomorrow to discuss?

    0Reply
  • Terry Brown
    Real Estate Investor · Cordova, TN · Member since 2013 · 10 posts · 0 votes
    12y

    Dean

    We respond to all emails on a daily basis. Just checked my facebook page...my page has not changed. Dean, what are you smoking there in Figi?

    0Reply
  • Dean Letfus
    OP
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    12y

    As we have lawyers involved I will leave them to expose your strange behaviour on this forum.

    I reiterate my question, when is the more than 20 thousand dollars of rent collected and not paid to clients going to be paid. You know exactly what I am talking about.

    0Reply
  • Terry Brown
    Real Estate Investor · Cordova, TN · Member since 2013 · 10 posts · 0 votes
    12y

    Just checked with Google...seems there over 3000 Plus Terry Brown's ..Funny stuff Dean. You mis spelled reiterate and behaviour. Your comments are extremely strange and un true. Nothing strange here but your comments.

    Why again do you have to leave the USA?

    0Reply
  • Alex CraigBusiness Member
    Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
    12y

    Maybe it was on Randolph or Ajanders, or maybe I am thinking of someone else, but the listing below is in line with the "15 mins from the trolley tracks."

    We are trying to put transparency to this industry--so many individuals from overseas are getting ripped off, which ultimately hurts investors doing it the right way. Take for instance your listing below on 1365 Eloise. You mention that this house is 4 miles away from Peabody Place. That sounds good, but it is misleading. That mall has been vacant for years and the proximity of Eloise to downtown is irreverent. Surely you know that.

    http://memphisinvestmenthouses.com/property/owner-financing-available-roi-25-29/

    The only individuals who should be investing in areas like this are people who truly understand the risk. I have only seen one other individual who is able to make D and F class properties work. To write a marketing paragraph like this is simply to mislead that the location of that house has an upside.

    I have a handful of investors who used to want that low income, high risk property -high perceived ROI. (I actually don't even source these properties anymore b/c I can't help them succeed in these areas; it is not what I am good at.). I made sure they truly understood the risk and I share with them the story of a property we managed that got completely gutted twice in a month and ended up with a chopped up car in the backyard. Again, transparency. The only people that buy these junker properties are overseas investors who truly have no clue about the Memphis market.

    I would not worry so much about my comments; if you honestly believe that selling those low end homes is a good investment, then you can defend that to your clients. But what Dean is accusing you of is criminal. I would worry about that. But if you want to talk about, I will be at MIG tomorrow.

    901-848-9028
    0Reply
  • Andy Luick
    Real Estate Investor · atlanta, GA · Member since 2013 · 456 posts · 237 votes
    12y

    I don't know anything about Terry Brown but good for him for popping in and responding. I'd suggest you take it privately although the original post was just trying to find Terry...which it seems to have accomplished. Seems the best place to do that would be privately lest another lawsuit gets started. Just MHO.

    It's always let the buyer beware...always has been. A $75k street become a $85k street if the market makes it so.....and it comes down to market being what a buyer at arms length is willing to pay for it. Our group doesn't concern itself with appraisals....they are relatively worthless as many of us can tell you. Our valuation is very simply....what is the net cashflow divided by 10%, the cap we and our investor partners prefer to use.

    I don't know a ton about memphis but parts of it are pretty rough as one would expect from the #1 murder capital in the US. There, as here in atlanta, you will find that the best property managers for C properties are unlicensed, in the streets operators. Just be as thorough as you can be in checking them out before you do business with them. There's also another side to this....with C properties you'll have tenants claiming to have paid rents for many, many months...always in cash but, of course, they never got a receipt for it. If you want the "great" returns in C-class stuff...then expect some of the risks. That's why I prefer shared housing and am actually trying our model on a couple of inner city homes to see how it performs. Happy Investing

    0Reply
  • Terry Brown
    Real Estate Investor · Cordova, TN · Member since 2013 · 10 posts · 0 votes
    12y

    You are right we don't usually sell junkers but that house was being marketed as a wholesale deal.

    We have many, many satisfied clients.

    0Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    12y

    Whether a home is a junker or not is really personal opinion. My opinion is that anything under $50k is a junker but to others they might love the cheaper homes and occasionally have a good experience.

    Even grading homes like stating A,BCD,F neighborhoods is also personal opinion.

    I dont know how Georgia laws are but here in order to rent homes out the leasing agents need to be licensed agents and the management company has to be under a broker.

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  • Andy Luick
    Real Estate Investor · atlanta, GA · Member since 2013 · 456 posts · 237 votes
    12y

    I believe we have the same law in GA....however, again, as I said above, most property managers inner city are unlicensed and some are very good at what they do. I'd happily take the risk and pay them provided I either knew them or had good reviews from others that I knew on them. Inner city markets are an entirely alien world for many of us posting here...unless you've lived it, most investors would have no clue...especially the foreign buyers. In every state, you also have those who operate via joint venture and then the licensing requirement no longer applies. While you are correct legally Curt, the reality is that some of the best inner city operators are unlicensed...and, yes, you will take your chances with them but it can be an educated risk.

    0Reply
  • Alex CraigBusiness Member
    Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
    12y

    Terry I am sure you do and that is great. I unfortunately own a few homes in these areas that I bought in 2007 when I was green to the industry and now I am stuck with these homes for another 23 years. We sold a few of these homes too and we manage a few of these homes--it did not take long to understand the nightmare these homes can be. In my opinion, they don't work--and I just think it is a sucker sell and buy. We just pulled out of 38118 after JP's murder in October. After that, I looked on the facebook page of the individuals now in jail for his murder and realized just how much gang activity is in 38118. A cop friend of mine in the OCU (Organized Crime Unit) told me 38118/Parkway Village is out of control and that the Hoover Street Cripps have taken over.. I can't tell you how many pics and videos I saw of Gang Members fighting and flashing signs around Scottsdale, Perkins, Nora Lee, etc. It was sickening.

    Anyways--if you believe in the model and you are making it work, then that is great. We will just have to disagree that those homes are good investments. I will be at MIG tomorrow and if you see me at the bar, I will buy you a beer.

    901-848-9028
    1Reply
  • Alex CraigBusiness Member
    Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
    12y

    Curt, consider yourself lucky. When you started buying, the reality of the junker property had set in and you bought some good ones, to which we manage. Your tenant on LB brought in $2,925 today to secure the home.

    BTW, we have a good app for your clients property. Should be occupied in 2 weeks.

    901-848-9028
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  • Account Closed
    Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
    12y

    @Alex Craig,

    If the gangs are out of control that means the police is spending their time at the doughnut shop.

    Joe Gore

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  • Alex CraigBusiness Member
    Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
    12y

    lol Joe, probably right.

    901-848-9028
    0Reply
  • Dev HornPro Member
    Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
    12y

    Dang man, I just dropped by this forum and a FIGHT broke out!

    Some pretty serious charges being made here... Is this all just a simple case of MISTAKEN IDENTITY? ;-) #BetterThanASoapOpera

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