Memphis Terry Brown warning

Memphis Terry Brown warning

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.

Curt Davis - KAIZEN Realty538 Reviews
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y

    @Dean Letfus

    Dean I was talking to one of my turn key borrowers in Memphis and this guys name came up.. Swear it happened a few hours ago.. I guess he had a real rep of pumping values and dropping severely overpriced properties on AU and NZ investors.. Of course that's not a new thing.. I just shutter when I see what some of the OZ investors send me and what they paid for them.. Its really criminal in many ways in my opinon.. Just un conscionable profit taking and spuiekerism to the maximum. AS I state many times I am of the firm Belief that C properties are NOT appropriate investments for out of area investors. For many reasons. You have C tenants and your experience with a C property manager.. Its freaking hard to manage these houses and not many can do it profitably... I have over the years heard of many C type managers taking the money and running.. ONe in Jackson MS I am aware of took over 200k he did not pay rent for 3 months and skipped.

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

    Dean,

    First of all this is sad to hear about.

    Second, I am not surprised by this and the client is the one who will suffer and this could hurt your business. I thought you were taking your clients to Reedy & Co for Mgmt?

    Did his mgmt company have any type of bond or insurance to protect from something like this happening?

    Curt Davis - KAIZEN Realty538 Reviews
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y

    @Curt Davis

    There is no insurance for this.. And a bond if you had one would be meaningless maybe 20 to 50k and next to impossible to collect on.

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

    @Jay Hinrichs

    I agree with you regarding cheap homes. The problem is that the foreign investor more times then none want the cheap homes.

    Our company, when we work with foreign investors the only way they are buying better or nicer homes is with financing.

    The other issue with pricing is that most foreign buyers come to companies like ours through affiliates who not only charge the buyer a huge fee to be in their " club " but then also make us pay them usually $5k or 10% of sale price which the only way companies like ours can deliver and still make a buck is to increase the purchase price. If the affiliates were not gouging we could offer a slightly better price. Who would have thought that affiliates for taking zero risk make in most cases more then we do per deal.

    Curt Davis - KAIZEN Realty538 Reviews
  • Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    12y
  • Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    12y

    Can't agree more on affiliates, they are a necessary evil. Not all are bad though :-) We used to be one and certainly never made too much money!!

    Memphis needs to be a volume game to make sense for the investor and the supplier!

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

    My CPA called me a month ago as asked me about Terry and stated some of his CPA clients were being taken by him.

    Curt Davis - KAIZEN Realty538 Reviews
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    12y

    @Jay Hinrichs That is not entirely true. We had a similar situation in 2005 before we started our management company where the manager skipped town and checked into a mental ward with a lot of money. We did collect all the owed rents that were collected thanks to that company carrying insurance against theft. And the person who perpetrated the theft was put in jail, I believe. @Dean Letfus would have to know the insurance company and more than likely the person he is talking about was not carrying insurance or paid it up.

    Hate to hear that for any investor. We have no contact with him so I cannot help, but I will help if we hear anything. Best of luck -

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

    @Chris Clothier. Thanks Chris. What sort of insurance would they need?

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

    I am no expert in this area but I heard someone recently call it a Fidelity Bond.

    Chris might be able to shed some light.

    Curt Davis - KAIZEN Realty538 Reviews
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y

    @Curt Davis

    I know most of the AU guys, and I have financed many of their buyers with my non recourse financing.. I did 20 plus for Lorne last year.. you probably know lorne.. He was one of my clients from the good ole days.

    The AU and NZ investors only know what they don't know.. And what they don't know is that information about real estate abounds for free in the US. IN their countries it does not.. There is no Zillow Trillia.. there are even buying type agents in their own country... But I do know and have done a lot of bizz with a few Turn key guys in the US that also charged a one time up front fee. But it really covered more after care than just access to" the super secret off market no one can ever get it inventory" You cannot believe some of the crap that has been unloaded on these poor people.. houses that were represented to be rehabbed that were never touched. I mean out and out criminal activity. I have spent 4 years talking about it over there. and we ran most of the crooks off of the sites..

  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    12y
    Originally posted by @Dean Letfus:
    @Chris Clothier. Thanks Chris. What sort of insurance would they need?

    I am not sure. I will ask tomorrow in our PM office and see what insurance is carried. I know it is required if you are licensed by the state and go through the inspections from the TRC. But I don't know right off hand. I will find out and answer you back.

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

    @JayHinrichs

    I know of the program you are talking about. You work with Robert Hubbard. My partner and I were trying to do business with him about 2yrs ago. He was supposed to bring us buyers but he only brought us one of his employees.

    Curt Davis - KAIZEN Realty538 Reviews
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y

    @Chris Clothier

    Chris good evening how are you... I got fully bought out of TWH in Oct. and I wrote our friend a pretty neat e mail and have never heard from him again..

    I will relay it to you off line I think you will get a kick out of it.

    I stand corrected on the insurance.. and that is a great point,, Anyone with a rental should ask to see if the PM has this insurance in place and its active. Like we do with appraisers. Most of the C class PM's I have ran into over the years were mom and pop types with ratty operations. B class or better is were its at..

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

    @Jay Hinrichs it is important to note that NZ and Australia are very different markets. Australia is full of greedy questionable operators. It's a big problem there. New Zealand is a much smaller market. There are maybe 2 or 3 of us doing any volume here and NZers are much more careful and do more homework than the OZ market.

    I don't say this because I am a NZer it is just the OZ market has a long history of dishonest real estate companies and failed schemes. NZ doesn't.

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

    @Curt Davis

    Curt I think I am going to get in trouble if we make a deal on the forum. I have only been on here a week.. Robert and I have been doing bizz for 3 years now.. He sold about 100 of my TWH notes.. And we started together about 18 months ago, I created the NON recourse note product for him and we have done about 20 mil since its inception.. Be happy to see what your doing.. contact me off line so I can continue to be welcomed here.. Its like old home week for me here all sorts of people that I know or did bizz with years ago.

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

    @Dean Letfus

    Dean could not agree with you more.. When I was buying houses I got calls from many AU marketers and wanted me to provide inventory,, I was doing my TWH model and they really did not get it.. But hey wanted me to provide houses I was not into selling my stuff at that time but would listen and the profit taking was off the charts not to mention they did no due diligence or asked me any pertinent questions about me or my operation. they just wanted product and hope for the best.. SEll make money duck and move on...

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

    @Curt Davis

    Fideltiy bonds are usually for employers to insure against employee theft.. what these PM's have done is criminal and should be turned over to the cops the DA and if interstate the FBI

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

    @Chris Clothier thank you!

  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Jay Hinrichs:
    @Dean Letfus
    Dean I was talking to one of my turn key borrowers in Memphis and this guys name came up.. Swear it happened a few hours ago.. I guess he had a real rep of pumping values and dropping severely overpriced properties on AU and NZ investors.. Of course that's not a new thing.. I just shutter when I see what some of the OZ investors send me and what they paid for them.. Its really criminal in many ways in my opinon.. Just un conscionable profit taking and spuiekerism to the maximum. AS I state many times I am of the firm Belief that C properties are NOT appropriate investments for out of area investors. For many reasons. You have C tenants and your experience with a C property manager.. Its freaking hard to manage these houses and not many can do it profitably... I have over the years heard of many C type managers taking the money and running.. ONe in Jackson MS I am aware of took over 200k he did not pay rent for 3 months and skipped.

    It was just recently on the news here in KC that a property manager took 3-4 months rent from numerous investors and fled town. Jay I believe Rosa had her property managed by the same guys in 2012 and never received any rent.

    Thanks

  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Jay Hinrichs:
    @Curt Davis
    I know most of the AU guys, and I have financed many of their buyers with my non recourse financing.. I did 20 plus for Lorne last year.. you probably know lorne.. He was one of my clients from the good ole days.

    The AU and NZ investors only know what they don't know.. And what they don't know is that information about real estate abounds for free in the US. IN their countries it does not.. There is no Zillow Trillia.. there are even buying type agents in their own country... But I do know and have done a lot of bizz with a few Turn key guys in the US that also charged a one time up front fee. But it really covered more after care than just access to" the super secret off market no one can ever get it inventory" You cannot believe some of the crap that has been unloaded on these poor people.. houses that were represented to be rehabbed that were never touched. I mean out and out criminal activity. I have spent 4 years talking about it over there. and we ran most of the crooks off of the sites..

    How about this one Jay,

    "Once in a lifetime opportunity to enter our elite members list where only the best deals by our developers will be presented to you"

    $5,000 to join haha What a joke

    Most are lipstick on pigs and come with $20,000 - $30,000 margins.

    My favorite has to be tho how they would charge an extra $20,000 for every additional bedroom the property had lollol so the investors would be paying $80,000 for a 4 bed home and $60,000 for a 3 bed even tho the operator could have bought the 3 bed cheaper then the 4 bed.

    This is not Australia where an extra bedroom is like freaking $100,000 more expensive lollol

    Thanks.

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

    Just for my own education how does someone overpay, by thousands, for a property? Was an appraisal not ordered, comps not pulled? Sorry for my ignorance but I would like to learn before I commit the same mistake!

  • 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.

    Curt Davis - KAIZEN Realty538 Reviews
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y

    @Gautam Venkatesan

    Hi Gautam,

    These companies are very good at brain washing investors. I have been to numerous seminars and they always give out a sense of urgency and its a big PUMP session. Rookie investors fall for the trap due to the brand name the company possesses. I am sure they also swindle them into not doing any independent market appraisals. Numbers can also be worked to make any over priced property look like a great investment especially when Australian property is so expensive. The investors get caught up in the hype of such cheap property they just need to buy it.

    Thanks.

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