Morris invest - any insights?
Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
Hi there
I came across morrisinvest.com the other day after listening to Claytons podcast. The whole idea sounds really reasonable, but I still would like to cover all my bases. Does anyone have any experience with them? Good experiences? Bad experiences? I can not find any reviews of them online except the testimonials on their own side. I guess that is because they are pretty new.
Thanks
Simon
As the CEO of a turnkey outfit in Birmingham and an experienced buy-and-hold investor, I have to agree with basically all of @Jay Hinrichs' points. If a company is selling rehabbed properties for $40k, then they bought them for around 5-10k, meaning these are C class properties at best. More likely you have some seriously distressed D properties in undesirable neighborhoods, because the sale price has to include a profit margin for these guys, the original seller and the rehab crew. So, no matter how nice the properties look now, no one that can afford to live elsewhere will pay to live in those neighborhoods. You could rehab something to look like the White House and never rent it for a decent amount because the amount of crime in the area (not to mention the condition of the surrounding properties) will deter anyone who has the financial ability to be even remotely choosy about where they live.
Which leads us to the issue of equity. I see a lot of people talking here about buying below market to get some built-in equity right off the bat, but equity only truly exists when you sell the property - until then it's just 'expected' value. It doesn't matter how much money has gone into a property if you can't sell it. Put 30, 40, even 50k into a distressed property, it won't matter because no one will pay 40-60k to live in the type of neighborhood where you can buy a 5k property to fix up. If you hold a property for a few decades and the area magically gentrifies into the next hot neighborhood, then great, but that's a miiiiighty big bet to make. Appreciation isn't even guaranteed in A and B class areas, so relying on the possibility of appreciation in lower-tier neighborhoods is very risky.
And regarding the issue of financing, I think that bears a little more scrutiny. Yes, cash is faster and easier, and it does seem that a lot of new investors looking for the next hot deal are keeping this new outfit busy....but when the question 'why do you not work with financing?' receives the answer 'because it's faster and also we don't want to deal with bank red tape like appraisals', I think it's time to dig deeper. Appraisals are important for a number of reason, not least of which because they ensure that the investors knows the value of what they are buying - at least on paper (see my comment above about 'expected' equity on properties with no real resale value). I would hope that this company is encouraging prospective clients to engage the services of a third party appraiser, rather than brushing off the necessity of an appraisal as an unnecessary annoyance.
On the one hand, I'd like to say this is a new outfit that just has more business than they expected. Real estate investing - and turnkey and wholesaling in particular - gets a bad wrap sometimes so we all tend to be a little bit 'on the lookout' for scammers, which is unfortunate. So I'd really like to hope that these guys are as legit as some of the posts here indicate because I like to think that we, as an industry, are learning to separate the wheat from the chaff, leaving only the well-intentioned professionals. Indy can be a great market, and a wholesale-cum-turnkey operation is an inventive model, so I'd like to think these guys are just a little avant-garde. However, I've also seen a lot of posts mentioning how difficult it is to contact them, or to schedule even a simple call in a normal time frame. The fact that the site has little information and that one person wasn't even sure if the guy on the phone was the guy from podcasts gives me pause. A few people have mentioned that it 'seems maybe too good to be true' and, in my experience, that usually means it is. It sounds a little like these guys just want people with cash on hand who will pull the trigger without a lot of questions or checking-in. Whether this is by design or because they are overwhelmed by their own success remains to be seen.
HOWEVER, for those that have spoken to the company and felt that they were on the level, I would say follow your gut but be very sure you take responsibility for doing your own due diligence. Ask them to show you exactly what their ROI numbers are. Ask for a real-world example of their returns on a property similar to the one you are considering. Not with an estimated 40% expense rate, but with the actual expenses incurred for the last year (or however long they've been operating). Don't lump all the costs together, ask for specific expense rates, occupancy, maintenance, move out costs, etc. They should be willing and able to provide these hard figures and they should be happy to walk you through how they add up. Questions from first time investors should never be met with 'tuning out' as one person put it with regard to their mention of financing. Even if they are really busy, an investor with questions, who wants to be educated about their decision, is not an inconvenience and shouldn't be treated as such. If you get the information and the treatment that you deserve and feel confident in the product, then go for it!
Sorry for the ramble ;) Having just read this whole thread, it seemed Jay was a little on his own out there and another experienced perspective might be useful. Take it as you will, and good luck to all in whatever investment niche you choose!
All the best,
Clayton
Has anyone looked into High Return Real Estate? (https://highreturnrealestate.com/) They are also in Indianapolis. I talked with them and was impressed. Curious if anyone considered them vs. Morris Invest?
@Joshua Zapin
I have listened to High Return Real Estate's podcasts, but I have not talked to them yet. I would like to meet with them at some point. Let us know if you have more information.
@Joshua Zapin Thanks for sharing. Their promised ROI seems to be very similar to MI. Well, given that they're offering properties at the same locations(Indianapolis and Jacksonville).
Do you happen to know what their total cost of investment per property is?
@Gary L.Thanks for the reply/insight. I heed your caution. But I also think there is something to be said about taking a risk with a new operation. It's a risk, but might be worth it. High Return Real Estate also seemed much more customer focused and have a long view that's refreshing. What I can garner is that Indianapolis is a great market. It's just a question of which property/neighborhood, etc.
@Robert Lindsley Hey have you had a chance to find deals and actually invest into our market? Is it fairly easy for you to find deals?
Hi @Todd Douglas. I actually decided to invest in multifamily buildings closer to home for my first few properties. I bought a 7-unit in CT a few months ago and am trying to close on a 3-unit before the end of the year. I haven’t had much trouble finding deals that cashflow out of the gate.
I love the Morris podcast — he gives so much terrific insight and the interviews are really good. But ultimately I don’t think his product is for me, at least not right now.
@Robert Lindsley Great Deal, welll if you need deals in Detroit, I will be glad to assist you. No daisy chains as am almost always direct to the seller.
@Robert Lindsley Where in Connecticut did you end up investing?
@Todd Douglas Thank you so much! I think Detroit is a very interesting market, and when I have some funds to invest I'd love to talk with you about it.
@Michael Noto Right now I'm focusing my energy in New London County. It's got a lot of great history, the properties cashflow nicely and hopefully the area will begin to experience some growth.
@Joshua Zapin Thanks for the shout out. :)
@Mark Whitted and @Joshua Zapin I would LOVE to chat any time with either of you (or anybody else for that matter). My whole focus is on the investor because I too have been frustrated with not having a contact person with some PMs. HMU!
Hi
I just had a conversation with a rep. I decided not to invest with them. As I understood the process, Clayton Morris has already purchased a bunch of properties in Detroit and Jacksonville and now they are selling them to those who call to invest with him. They do not allow you to get a mortgage to buy the property but have to pay them the full amount of the home upfront. Perhaps you can work around this by getting a heloc or some other way to get the money first, but you have to buy the home from them for the full price - which ranges from $40,000 to $55,000. These homes also require work and so you will have to pay for that also. And then they will find a tenant who will pay roughly $700 for the monthly rent and Morris Invest will charge 10% a month for the management fee.
I have seen a handful of videos of people happy with their dealings with Morris Invest and they talk about a 12 - 20% Return on Investment from their recent purchases. I admit I have no understanding on how to calculate ROI on a real estate but having to shell out roughly 45,000 to buy a place plus another $5000- $10,000 to fix the place and then pay $70 a month for the $700 rent you collect didn't seem like a good deal to me. I think it would take 7 to 8 years to break even. But as I said I don't understand how to determine ROI on a real estate deal. Can someone educate me - does this sound like a good investment?
@Alejandro Du- you seem to be the logical person on thread who understands fifth grade math of MI, for rest read following threads.
https://www.apartmentlist.com/rentonomics/rental-i...
https://www.bloomberg.com/news/articles/2017-10-26...
https://www.biggerpockets.com/forums/311/topics/22...
https://www.biggerpockets.com/forums/52/topics/402...
https://www.biggerpockets.com/forums/594/topics/49...
Good Luck
Vivek
I closed on a house in early Oct. the Property Manager went through and handed me a long punch list. I was under the impression the properties were "rent ready". I emailed Morris Invest and they assured me that their crew was on it and knocking out the items. A month goes by and I receive a work order from the PM to approve $1,500 for the items Morris Invest told me they were addressing a month ago.
The communication has been close to non-existent. The advice from the podcasts is invaluable. However their business model needs a lot of tightening up. They've already come back to me with other properties to buy. I got all kinds of attention when it came to closing. I am hoping this isn't a case of wham-bam-thank-you-ma'am.
Careful! His podcast is great, but his company does a terrible job of rehabs and property management. I bought 6 houses in May and am in the processes of finding a new property management company and finishing the job of bringing the properties up to a livable, legal state. They have been terrible to work with, it's like pulling teeth to get any information about your properties. Morris Invest and their partner in Indiana Oceanpointe Investment is, in my opinion, somewhere between a scam and just grossly incompetent. I'll post the whole story soon, when I have a chance. Be smart-- don't fall for good marketing. And don't pay the whole cost of a rehab before the work is finished, to these fools or to anyone else!
I think the real issue is that they've grown too fast. They don't have the cycles to handle the load. They need to hire more people or cut back on what they sell. Clayton has been good at getting back to me, but I need to initiate the interaction. I bought one house as a trial balloon. The podcasts are very good, and I may apply that knowledge to properties closer to me. I can pick up homes in my area for around 20K, rehab and spend as much as I would with them.
I just received a call from Clayton and spent 20 or so minutes talking to him. I voiced my concerns and he told me how they were going to address the issues. The guy was sincere. I understand that there are bumps along the way when you're dealing with human beings, and I am very patient. All I ask is to keep me in the loop.
I have been following MI for a while now on this forum.
It seems to me that the main problem with MI is the property management team that MI chooses/recommends to use. Nearly everyone has been complaining about how unresponsive these guys at Oceanpointe really are. From what I have seen, Clayton is pretty responsive when you reach out to him.
Maybe one of you investors should tell him to find a better property management company, and while at it, you guys should probably leave Oceanpointe and find a better Indy PM yourself.
Perhaps check rentfaxpro for some insights on a properties location for manageabilty and rent collectability. If it has low scores one might expect even a rougher road ahead. Any PM usually will do ok when everything is kosher. It is when all the common landlord issues arise the investor learns if the PMs are up to the task or not. At these rent and price levels I suspect bottom barrel Pm service is just totally normal.
Unfortunately some investors might learn the hard way about a locations manageability. Then the next hard lesson might be the exit liability. Look up what a torn up rental sells for in these locations as that is what some should expect.
Good luck!
Does anyone have a physical address for Morris Invest? I'm trying to track one down so I can file a BBB complaint against them.
Does anyone have a physical address for Morris Invest? I'm trying to track one down so I can file a BBB complaint against them.
My Guess is the Somerset NJ entity, but I can't verify. https://www.njportal.com/DOR/BusinessNameSearch/Search/BusinessName
| MORRIS INVESTMENT ASSOCIATES, INC. | 0100971814 | JERSEY CITY | DP | 12/4/2006 |
| MORRIS INVESTMENT GROUP LLC | 0450073904 | SOMERSET | LLC | 5/5/2016 |
| MORRIS INVESTMENTS, L.L.C | 0600193864 | OAK RIDGE | LLC | 2/20/2004 |
| MORRIS INVESTORS CORP. | 0100469431 | RUTHERFORD | DP | 12/6/1990 |
Hi there
I came across morrisinvest.com the other day after listening to Claytons podcast. The whole idea sounds really reasonable, but I still would like to cover all my bases. Does anyone have any experience with them? Good experiences? Bad experiences? I can not find any reviews of them online except the testimonials on their own side. I guess that is because they are pretty new.
Thanks
Simon
I bought a duplex from Morris Invest in Indianapolis - it was a significant mistake. The management company, Oceanpoint, is a NIGHTMARE. Oceanpoint is not part of Morris Invest therefore Morris Invest washes their hands of management problems after the sale. The management company ignores owner phone calls, email and doesn't notify about pending vacancies. The property was supposed to be recently rehabbed but I learned after purchase it was purportedly rehabbed 3 yrs previous. I found that hard to believe because I received at least one violation from Marion County inspectors every month I owned the property. Trying to get Oceanpoint, the management company, to handle the violations properly was an exercise in extreme frustration. I had a vacancy for 4 months and could never get Oceanpoint to give me the name or phone number of the leasing office so I could find out why I had a vacancy for so long. After threatening legal action, Oceanpoint bought the property back from me for the original purchase price. I'm so relieved that I'll never have to deal with Oceanpoint Management ever again.
Stay away. Stay far way.
P.S. If I'm threatened with a lawsuit over this post I would be happy to go to court. Documented proof is an excellent defense.
Does anyone have a physical address for Morris Invest? I'm trying to track one down so I can file a BBB complaint against them
When I was considering investing with them, I had asked them their BBB rating and explained I couldn't find them on BBB and they had replied they are not registered with the BBB.
I don't believe you can file a BBB complaint against a company not registered with them, or at least that there would be any impact if you did, but I could be wrong. Yelp, Google Reviews, and other such review methods might provide more public transparency.