anyone deal with Maverick Investor Group?

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anyone deal with Maverick Investor Group?

Vishal Seth
Milpitas, CA · Member since 2014 · 4 posts · 1 vote

they are a turnkey real estate investor group with a decent portfolio. Anyone dealt with them? I'm curious as to how the compare with other turn key investment companies.

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Raj G.
Real Estate Investor · Chantilly, VA · Member since 2017 · 13 posts · 39 votes
7y

In 2017, I found Hipster Investments (Ali Boone) and through Hipster attended a webinar hosted by Maverick Investment Group (Matt Bowles, Phil Alexander). During this webinar, Maverick Investor Group promoted and referred potential investors (like me) to ABC Baltimore (Jay Walsh). In Aug 2017, we (my wife and I) purchased a Baltimore BRRR property with ABC Baltimore. The property was sold to us for $106,000 ($46000 purchase price+ $60,000 for a full rehab to be completed by ABC Baltimore).

After 2 years (as of Aug 2019), I am writing to report that I lost thousands of $$ in this investment (breakdown attached). Sharing my experience, in my opinion, can help educate other new and experienced investors considering similar investments with ABC Baltimore or having investment discussions with Maverick Investor Group and Hipster Investments. Based on my experience and in my opinion, I cannot recommend ABC Baltimore, Maverick Investor Group or Hipster Investments.

The investment was a BRRR purchase in Baltimore where we would pay $106,000; $46,000 for the property + $60000 for a full rehab that was going to be completed in 120 days. Maverick received a referral fees (in excess of $6000) from the transaction between ABC Baltimore and me. In addition to the $106,000, we also paid ~$3500 in closing costs. During the Maverick Investment Group webinar, ABC Baltimore made the following guarantees that were also in our final contract with ABC Baltimore-

1) If the rehab takes longer than 120 days, the seller (ABC Baltimore) will pay us a rental guarantee of $1400 per month.

2) If the house after rehab is completed appraises for less than our total purchase price of $106,000 then the seller will buy the house back.

Assured by these guarantees in the contract, we signed the contract for $106,000. We had wonderful guarantees and a signed contract. Surely, nothing can go wrong, right?

Dead Wrong. Our 120-day rehab period ended in Dec 2017 and ABC Baltimore told us that the house was “very close” to being done. Even though we were disappointed that the rehab was not complete, we thought, the rental guarantee will offset the construction delay. ABC kept the first two and half months of rent from the rental guarantee for tenant placement fees and utilities (water, electric). Based on our records, ABC did not pay water, electric or any other utilities but charges us for them anyway. We had to pay the utilities directly to Baltimore City to stop the late fees from piling and have our credit affected.

Maverick, on the other hand, continued to advise us to be patient. Months passed and ABC kept saying that house was “very close”. After several reminders, ABC Baltimore started paying rental guarantees in March 2018 ($1260/month) and they were almost always late. In my opinion, it almost felt like we had to chase and coax ABC Baltimore to get the money owed to us from the rental guarantee. The rent guarantee was never deposited without several reminders that it was past due.

In May 2018, ABC told us that the house was almost done, and we could hire a licensed Home Inspector to inspect the home. The Home Inspector report revealed major deficiencies in the rehab and the Home Inspector told me that the rehab was like “putting lipstick on a pig”. We also learned that the house had failed or not received many of Baltimore city’s permits and inspections. When I sent the Home Inspection report to ABC Baltimore, it was the usual, “We will work on the items, we are very close, etc.”. Things continued at a snail pace with the rehab and I continued to remind and plead ABC to pay us the rent guarantees.

ABC Baltimore promised to continue paying us rent even after the Rent Guarantee expired on Dec 17 2018 because the house was not ready after more than 16 months. However, starting from Dec 2018, ABC Baltimore stopped paying us rental guarantees and the house remained unfinished without required city permits to rent the house. ABC Baltimore continued to say that “house was close” and Maverick continued to ask us to be patient. We thought about hiring a lawyer but the legal fees were expected to be in the range of $10k to $15k and would have taken months (if not years). We decided against taking the legal route and continued to plead ABC Baltimore to finish the rehab and pay us the monthly rent without success.

Of course, during this entire ordeal, Baltimore City issued several citations and fines to our property because ABC Baltimore was often working without required city permits and leaving construction trash outside. Because these were liens against our property, we paid over $1200 in Baltimore city citations from our own pockets. ABC Baltimore said they would pay us back these citations but of course they did not.

In May 2019, ABC Baltimore finally told us that the house was “ready”, and we could get it appraised. We thought- “Thank you, God! The wait will be worth it!”. The appraisal of our house from our refinance company came at $60,000. The house was expected to appraise at least $106,000 per contract! We immediately sent the appraisal report to ABC Baltimore and asked them to buy the house back per contract. ABC Baltimore said they would conduct their own second appraisal (per contract ABC Baltimore had the right to conduct second appraisal).

ABC Baltimore appraisal came at $102,000 (contingent on the basement flooring being fixed). Note that the house still did NOT have the required City Permits to rent the house to a tenant. It was very surprising how ABC’s appraisal ($102,000) was so much higher than our bank’s independent appraisal ($60,000). ABC Baltimore’s appraisal was still lower than $106,000 expected per contract. We again asked ABC Baltimore to buy the house back. At this point, we were literally scared and feared that if ABC Baltimore refused to buy back the house and then we would have to go through a long and expensive legal process. Feeling helpless and powerless, we offered to give up our unpaid rents and Baltimore City Citations of over $10,000 so that we can complete the buy back without having to go through a legal process.

In July 2019, ABC Baltimore agreed to buy the house back at $95,000. Burdened with a vulnerable and helpless feeling, I agreed to accept ABC Baltimore’s reduced offer of $95k and closed the buy—back with ABC (we still had to pay closing costs). During the days leading up to the closing of the buy-back, we sent Thank-you emails to ABC Baltimore and Maverick to butter them up. This is how vulnerable I felt.

All said and done, we lost thousands of $$. See the attached breakdown of losses for more details. We not only lost our hard-earned money but on top of everything, our health suffered, I had several sleepless nights due to the stress and anxiety that this horrible experience created for my wife and me.

After the buy-back was completed, I approached Maverick to at least help us with our losses by requesting us to give back ~$6000. Maverick said no and said I was acting unprofessional. Maverick pointed to the agreement we signed that essentially relieved Maverick from any financial losses suffered by us. In my opinion, Maverick and Hipster in good faith could have done more because Maverick had referred us to ABC Baltimore (and Hipster had connected us to Maverick). ABC Baltimore was a horrible referral, in my opinion. To me, it felt very unfair that we lost thousands of $$ in our transaction with ABC Baltimore and yet Maverick Investor Group made a commission in excess of $6k from our transaction with ABC Baltimore. After Maverick said no to our request to help us with ~$6k, I also approached Jay Walsh after the buy-back to help us by returning portion of the money that was owed to us. Jay Walsh told me that I had agreed to the buy-back terms and asked me to “Be a Man”.

In summary, thanks to everyone for reading the long post. I have attached documents that provide additional details to my post. I cannot recommend the three companies that I worked with (ABC Baltimore - Jay Walsh, Maverick Investor Group- Matt Bowles and Phil Alexander, and Hipster Investments- Ali Boone). I will end the post with a phrase that, in my opinion, is apt for my experience- “Fool me once, shame on you. Fool me twice, shame on me”. There will never be a second time.

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  • Weis Sherdel
    Investor · Washington, DC · Member since 2014 · 57 posts · 13 votes
    11y

    @Vishal Seth - did you ever find answer to your question.  I am also curious as I was referred to them and just curious if you ever worked with them.  

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    they are a marketing company not a turn key provider.. they market properties for many different providers.. and Ali Boone on this site works with them as well I believe.

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    3Reply
  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    11y

    I have dealt with them. They are marketers most, (maybe all), their inventory is from other turnkey providers. The principals are good guys and I found them honest and very hard working to find me deals I needed. Can't comment on the quality of their deals because they are not actually theirs if that makes sense.

    2Reply
  • Christopher Brown
    Chandler, AZ · Member since 2014 · 7 posts · 1 vote
    11y

    @Dean Letfus Did you close on a deal that they found for you? I appreciate it's not their deal as it's not their inventory. But we're you satisfied that the companies they are marketing are solid, honest companies? Specifically, would you trust them enough to use them again to find you another deal?

    0Reply
  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    11y

    Just can't answer that Chris my company does all its own acquisition now but yes if they brought me something good enough I would buy it for sure.

    0Reply
  • Doug Johnson
    Investor · Frisco, TX · Member since 2015 · 84 posts · 52 votes
    10y

    Be very, very careful with Maverick.  Investors in Birmingham are getting hurt.

    0Reply
  • Timothy O'Leary
    Investor · East Meadow, NY · Member since 2015 · 5 posts · 1 vote
    10y

    Hi Doug, in what way are Birmingham investors getting hurt by Maverick?

    1Reply
  • Doug Johnson
    Investor · Frisco, TX · Member since 2015 · 84 posts · 52 votes
    10y

    There has been fraud with their local provider where Maverick did not vet Birmingham Investment Properties well.  Search "Birmingham" and "Maverick" on BP and you will see a couple of threads with very unhappy Maverick customers. I am not a Maverick cistomer and would never trust them to vet local turnkey companies.

    0Reply
  • Carol Helton
    Real Estate Professional · Birmingham, AL · Member since 2015 · 2 posts · 1 vote
    10y
    Originally posted by @Doug Johnson:

    There has been fraud with their local provider where Maverick did not vet Birmingham Investment Properties well.  Search "Birmingham" and "Maverick" on BP and you will see a couple of threads with very unhappy Maverick customers. I am not a Maverick cistomer and would never trust them to vet local turnkey companies.

     I believe this is one of the threads that @Doug Johnson is referring to..it's full of valuable insights and advice:

    Fraud with our Birmingham turnkey property

    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 539 votes
    8y
    They have a webinar tonight regarding St Louis properties. I’ve spoken to AREI about Kansas City and St Louis and they seem to be cleaning up a mess in St Louis when they were using PropertyWare as their PM. I’ve also heard on some podcasts that inspectors in St Louis are extremely picky - which, I guess, could be good or bad.
    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    8y
    Vishal Seth it’s a marketer. There are good and bad things about using them but for the most part they just mark up the properties.
    2Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 539 votes
    8y
    I was on their webinar tonight. I literally created an account on their website during the webinar, placed a reservation on a property of interest, got connected to the seller via email, and now it appears their work is done and I’ll be communicating directly with the seller from here on out. They said they’ll continue to keep Maverick in the loop, but so far, I don’t really feel like they’ve added much value other than pointing me to the seller (which, I guess in and of itself is value, but I guess I was expecting more - it seems that companies like Norada also grt referral fees but that they really do a lot for their clients). The other thing I find weird is that the seller presumably has to pay out two sets of referral fees (to the email marketer that sent me to the Maverick webinar and then to Maverick themselves). The exact property I put a reservation on is listed on the seller’s site directly for $16,000 MORE than it’s listed for with Maverick (which, you’d assume is backwards). What am I missing? Finally, seller wants $5,000 escrow money WIRED and only gives 3 days for inspection in their contract. Are escrow funds normally wired (vs mailing a check)? Isn’t 7-14 or even 7-10 days more reasonable for the inspection period? I’m excited to move forward, but I don’t want to blindly just agree to everything either.
    2Reply
  • Marco Santarelli
    Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes
    8y

    Thanks for the mention @Mark S.  You're correct in that we, "really do a lot for their clients".

    We're proud of that fact, and our clients appreciate it.

    Continued success!

    2Reply
  • Lee RipmaPro Member
    Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes
    8y
    I would not wire anyone 5,000 without seeing a property, vetting a contract, meeting actual people behind deal. I don’t know how anyone can do due diligence in 3 days. If you think something is fishy-never wire money. In fact, if you think something is fishy you’re almost always right. I’m pretty sure you can pay huge referral fees when your margins are really good!
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  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 539 votes
    8y

    Thanks, all.  HUGE disappointment in dealing with them.  You can search my recent post about "Is This Normal Language in Sales Contract?" for more information.  Long story short, I did not wire money or move forward with them.  I appreciate everyone's feedback.

    0Reply
  • Patrick Shawn Faherty
    Fredericksburg, VA · Member since 2016 · 190 posts · 64 votes
    8y
    Originally posted by @Jay Hinrichs:

    they are a marketing company not a turn key provider.. they market properties for many different providers.. and Ali Boone on this site works with them as well I believe.

     Very True.  And there are several of us who purchased via Maverick that are not thrilled with the TK provider they continue to promote.  Follow along here if you'd like: https://www.biggerpockets.com/forums/92/topics/136097-anyone-out-there-have-experience-with-abc-capital-investments-in-philadelphia-pa-for-turnkey-properties 

    1Reply
  • Stacy Weng
    Fairfax, VA · Member since 2013 · 69 posts · 35 votes
    8y

    Agree with @Patrick Shawn Faherty ! I purchased a property through one of Maverick's TK providers in Baltimore and it's been a nightmare experience. This speaks to Maverick's "vetting" process or lack thereof.

    When I reached out to Phil from Maverick to express my latest concerns, instead of addressing it with myself or with the TK provider, he simply forwarded my email to the TK provider, which then led the TK provider to send me an extremely unprofessional and nasty email. 

    I would definitely think twice before doing any business with them.

    4Reply
  • Patrick Shawn Faherty
    Fredericksburg, VA · Member since 2016 · 190 posts · 64 votes
    8y
    Originally posted by @Stacy Weng:

    Agree with @Patrick Shawn Faherty ! I purchased a property through one of Maverick's TK providers in Baltimore and it's been a nightmare experience. This speaks to Maverick's "vetting" process or lack thereof.

    When I reached out to Phil from Maverick to express my latest concerns, instead of addressing it with myself or with the TK provider, he simply forwarded my email to the TK provider, which then led the TK provider to send me an extremely unprofessional and nasty email. 

    I would definitely think twice before doing any business with them.

     Very unfortunate that Maverick/Phil has apparently chosen to not address the issues. I think they see this a "typical" of a TK provider (and have a conflict of interest based on the commission they receive from the TK provider for marketing them... I will not be working with them in the future. 

    0Reply
  • Patrick Shawn Faherty
    Fredericksburg, VA · Member since 2016 · 190 posts · 64 votes
    8y

    Hmm, I see Matt's post has been removed.  I sent you a PM @Matt Bowles . 

    0Reply
  • Matt Bowles
    Residential Real Estate Agent · Los Angeles, CA · Member since 2012 · 7 posts · 1 vote
    8y

    Hey folks,

    I want to thank everyone who has shared constructive feedback in this forum. Over the past 10 years and we have been consistently committed to paying close attention to client feedback, reflecting on it, and implementing ongoing improvements to the best of our ability. This is how we have operated for the last decade and how we will always continue to operate.

    I'd like to address some of the specific items conveyed in this thread.

    With respect to the Birmingham situation from many years ago, all of our buyers were compensated for their losses (as the author of that thread confirmed towards the end of the thread). We ended our business relationship with that seller years ago and they are no longer in business.

    @Mark S. After you reserved your STL properties, I understand that you did not communicate with either our team or the Seller (despite both reaching out to you) about this specific concern relating to the contract terms. One important thing to remember on your real estate investing journey is that all contract terms are negotiable, and clear communication with the seller is very helpful to ensuring you are comfortable with the final contract terms of any deal. 

    And in terms of a refundable earnest money deposit being sent to escrow (not to the Seller), this is a standard part of most real estate transactions, whether buying a home to live in or a rental property. If a seller is going to remove the property from the market while you conduct your due diligence, they want to have assurance that the buyer is serious, and an earnest money deposit held in escrow (which is refundable in accordance with the terms of the contract) during the buyer's due diligence period is the typical protocol with all the sellers I know and have dealt with.

    @Stacy Weng I want to personally apologize that your experience has been so frustrating and challenging. I want to assure you that we are here to support you to the best of our ability every step of the way. I also want to assure you that each time you have reached out to us with an issue, we have promptly conveyed it to the seller and done our best in getting you answers and solutions as expeditiously as possible. We have regularly scheduled meetings with all of the sellers we work with, during which time we discuss any challenges our clients are having and attempt to do what we can to assist in constructively resolving them, and that has certainly included yours. Phil and I both followed up with the seller this week on your behalf to try and support a constructive resolution to the challenges you experienced. I understand after additional communication between you and the seller there is now a clear path forward to getting your property completed and tenanted. I also understand that the seller has been paying you the agreed upon financial penalty for the construction delays, and that it's also agreed you will hold back the final $5,000 draw payment as protection for you until the seller completes all the punch list items to your (and your inspector's) satisfaction. Finally, I understand the seller has subsequently apologized for any offense caused by the curt language you referenced in one recent email, and that they have committed to completing your property expeditiously in accordance with the contract terms. We sincerely appreciate you being part of our community Stacy, and if there is anything further we can do to support you in the final stages, as we are always here to help.

    @Patrick Shawn Faherty I would like to apologize to you that your experience has not been smoother. That sounds very frustrating and you deserve better. I want to assure you that we have regular meetings with all of the sellers we work with, during which time we raise any challenges our clients are having and make constructive suggestions for operational improvements. I just checked with my staff and we have no record of you emailing anyone since November, so we were unaware of any recent issues you were experiencing. Could you share both your current challenges and your constructive suggestions for how things could be improved, so I can review that before our next meeting with this provider? We appreciate you being part of the our community and working constructively with us to make ongoing improvements to the buyer experience.

    1Reply
  • Stacy Weng
    Fairfax, VA · Member since 2013 · 69 posts · 35 votes
    8y

    @Matt Bowles Appreciate you addressing this matter. However, it's been two months since the last incident and my property still isn't complete. Whatever “clear path forward” we had discussed with the seller fell short, yet again. Am I surprised? No. Disappointed? Extremely. When we went to do an inspection to generate a punch out list, the property was nowhere near ready as the seller had described. There was even a permit violation notice on the door. This was two months ago, and there have been no changes since then. Every time we’ve reached out to the seller, he’s told us he’s meeting with the city to get the permit issue resolved, week after week.

    Yes, he’s paying us rent during the delay, but at this point, the lost opportunity cost from our capital being tied up for so long far outweighs any rent that we’ve received. It’s been a year since we purchased the property and it’s still not done!! How is that acceptable under any circumstances?

    On top of that, I heard from other customers of the seller that they changed PM companies, which I was never even notified of.

    Unfortunately, this really makes me question how your regularly scheduled meetings and check-ins with the seller are handled if these issues are constantly not being resolved in a proper manner. And from speaking with other customers who have purchased from the seller, they have all experienced the same frustrations and unprofessionalism. 

    3Reply
  • Matt Bowles
    Residential Real Estate Agent · Los Angeles, CA · Member since 2012 · 7 posts · 1 vote
    8y

    @Stacy Weng  I'm really sorry to hear you have had a challenging experience. Let me assure you that we are here for you and that we will do everything we can to support you though the entire process. I just checked with my staff and it appears that nobody at my company has heard from you in two months. So, first of all, I would strongly encourage you to be directly in touch with us whenever you are experiencing a challenge, so we can immediately get involved and do our best to support you through whatever the issue is.  We can only raise issues with the seller if we know about them.  

    Regarding the Property Management...In an effort to serve their clients better (and in response to some of the customer feedback you cited), the seller has partnered with an established local property management company to expand the property management infrastructure and resources to better ensure that owners receive the level of responsiveness and overall customer service they deserve. The seller is still involved in fulfilling warranties, maintenance, etc.  I'm sure when your property is ready to move into the leasing and management phase, you will receive details on this preferred property management option. You are, of course, welcome to use any PM company you choose though, and are not obligated to use the one affiliated with the seller.

    Regarding construction delays, there are unfortunately a lot of variables in the construction business that can cause delays. The seller obviously has a financial incentive to finish the property as quickly as possible because they have to pay you rent as a penalty every month if they don't (which you confirmed they are currently doing). While 12 months is definitely longer than most properties are taking, these kind of delays are always a possibility, which is why you have the agreed upon financial recourse of the seller paying you rent. I apologize if the possibility of delays was not clearly communicated to you from the outset. The seller is now sending out introductory letters that clearly communicate the possibility of delays, and the associated buyer recourse in the event they happen.

    Moving forward, if you feel that the seller paying you rent, combined with the other advantages of the BRRRR model, is not a sufficient trade off for the potential downside of construction delays, then I would encourage you to consider buying performing properties on the classic turnkey model. Performing properties remove the variables of potential construction delays because the property is already renovated and cash-flowing on the day you close.

    I apologize again for the challenges you've experienced Stacy, for the stress, and for any misalignment of expectations about potential construction delays.  We are not perfect, nor are any of the sellers we work with, and there are a lot of variables in the real estate industry that our out of our control, but I can assure you that we will work as hard as we can to support you and do our best to help resolve any challenges you may have.

    Now that I am aware of your issue, I will have my staff reach out to the seller and be in touch with you privately this coming week with an update. If you can communicate directly with us moving forward, that would be the most efficient way to resolve any remaining issues. 

    We appreciate your patience and thank you for being part of our community!

    0Reply
  • Patrick Shawn Faherty
    Fredericksburg, VA · Member since 2016 · 190 posts · 64 votes
    8y

    With regards to the new PM that ABC is using, they are night and day different so far. They have given timely responses to my emails and even called me (twice!). I'm very hopeful about this change. Though I do need to follow up about last months rent payments (to me). 

    0Reply
  • Ernesto Hernandez
    Realtor · San Francisco, CA · Member since 2017 · 408 posts · 361 votes
    8y

    A friend of mine sent me a video. I then googled Maverick and it lead me to this post. 

    Scary. 

    Hope you've been made well by now Stacy.

    0Reply
  • Camille Spinelli
    Member since 2017 · 2 posts · 1 vote
    8y
    @Mark S. I to just reserved a property and looking over other comps in that area and crime stats as well as 11% loss of population in Lorain, OH. I may need to pass as well. What are some legitimate analytic sites you used? Who did you end up going through a company or yourself?
    0Reply
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