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
The Morris Invest website seems very basic with no proformas with addresses, contact information, about us, referrals, etc.. A lot of blog posts and good overall design and layout though. It just seems odd that a lot of folks here talked to him and "he seems legit". Maybe if I listened to the podcast then I will be under the spell.. I've talked to many turnkeys and rehabber types and no one pressures me to pay cash. Its whats in my best interest since its my money..
I have been following Clayton and Natalie Morris since back when they were both tech reporters. Their podcast interviews on Bigger Pockets were very impressive to me. I will have to look into Morris Invest. Thanks.
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
Thank you for this. Huge thumbs up!
@Roy Lin thanks for the vote! I always feel a bit bad about my wall-of-text posts, but I'd rather be wordy and get good info out there than be brief and assume that new investors just magically know what to look out for. The BP community is only as good as its active members, after all.
Best of luck in your RE endeavors!
Clayton
Guys
A big fraud alert. I went over all the profiles of those who are pitching for morrisinvest or naively asking questions to build interest in them. Majority of them joined around 2 months ago in BP and this looks like a collusion attempt to pump up demand. I would proceed with utmost caution
Cheers
No,@Sunny D., this is not a collusion attempt. What you're seeing is that Clayton Morris has started promoting his business via his tech journalism credentials right about 2 months. I first heard of his real estate business because he was on the This Week in Tech podcast (the most popular tech podcast in the world, most likely) and mentioned it... and then he started his podcast... and then iTunes featured his podcast on their home page.
In short, he's gotten A LOT of publicity in the last two months that any non-public investor would find it hard to get. In particular, because his podcast was featured on the home page of iTunes, his listenership increased DRAMATICALLY. That's why there are so many investors asking about him...
I personally think his 40k all cash homes in Indianapolis aren't a fit for me, but I can see that some who might be willing to risk a bit more for higher ROI would go for it.
My guess would be that this is because we (the ones asking naive questions) stumbled upon his podcast around the same time because that is when it got featured in different podcast libraries. And in search of a place where we can ask our naive questions, we ended up here in BP, where we immediately signed up - just about two month ago. Nothing suspicious about this!
, me and jumping on the MI bandwagon, not going to happen. Its my hard earned money, easier to lose and so much harder to earn. Good luck with your investing. If i do go to indy buys i will work with fs houses, reputation and track record matter plus ability to exit an investment matter most to me and hence i am sticking to holton wise in cleveland for now.
, me and jumping on the MI bandwagon, not going to happen. Its my hard earned money, easier to lose and so much harder to earn. Good luck with your investing. If i do go to indy buys i will work with fs houses, reputation and track record matter plus ability to exit an investment matter most to me and hence i am sticking to holton wise in cleveland for now.
Thanks for the mention Sunny myself and everyone else at HoltonWise appreciate it.
As for Morris Invest I don't know much about them nor did I read all the pages in this thread but I did see something that I wanted to speak about. Buying 40k homes cash.
If an investor has 40k I believe they are better off using it to buy one 160k or two 80k properties. Getting your mortgages paid for by the tenants is the single most often overlooked benefit to owning rental properties and it is, in my opinion the most important reason one should buy a rental property.
I've followed Clayon and his wife on the tech scene for years so it's not like they are nobodies. Clayon works for Fox in the public eye too so if he was screwing people, it would be a public nightmare. With that said, who knows if his turn-key solutions are the best way for people but I will say this...until I heard from Clayon about his turn-key company, I didn't think it was possible at all for me to get into real estate investing. After listening to his podcasts and then finding BP, I'm now a believer. I haven't pulled the trigger yet but I'm certainly getting ready. Reading everything I can! Even if I don't end up going with Morris Invest, he at least put the fire in me to pursue this path and have faith I can succeed.
I had a meeting with Dave at Morris Invest a few weeks ago and it does seem good. But I am new and trying to learn what I can. I have no capital so i'd have to borrow from a hard lender to do my first deal most likely. It's hard to pull the trigger on the first property. Because it really does make or break the future I think. I can't fail the first house or I'd be screwed as I wouldn't have money to fix the situation. So choosing the correct first property is crucial.
@Josh Pass I'm taking a very similar path as you. Heard Clayton on a podcast, peaked my interest and got the fire under me. Good luck with your journey just keep your eye on the prize. I haven't pulled the trigger yet but expecting to real soon. I'm real interested to hear about your continued progress.
Josh Pass I got my interest in real estate investing re-ignited from listening to Clayton Morris on TWiT and then following his real estate podcast. I look forward to seeing how our journeys go over the next few years. I didn't end up purchasing with Morris Invest, but I'm close to going into contract on first turnkey property.
What turn key company are you working with?
Josh Pass I got my interest in real estate investing re-ignited from listening to Clayton Morris on TWiT and then following his real estate podcast. I look forward to seeing how our journeys go over the next few years. I didn't end up purchasing with Morris Invest, but I'm close to going into contract on first turnkey property.
What turn key company are you working with?
@Jeremy Buttell Thanks for sharing. Glad you are happy with them so far. Did you in fact have to pay cash? (I'm looking for a TK provider and prefer to use financing.) Also, how have your interactions been with the property management company?
Shawn in VA
Hi everyone,
I think this may be my first post on here, I can't remember. But I've been acquainted with Bigger Pockets since early this year. I know my newness to the forum will be questioned by some, but that's just the way it goes. It's so natural to be skeptical and so easy to stay safe and maintain the status quo.
As a new investor, I've been working with Morris invest since around Feb of this year and have since acquired three properties from them.
What I can tell you is this, take it for what it is. All of my dealings with their team have been professional and fairly straight forward. They've done what they promised and continue be my boots on the ground in IN.
Perhaps they could offer more information on their site, but that's really their call of course. If your business is successful through your existing marketing techniques (his experience broadcasting gives him an edge here), why accelerate your efforts to make your website more comprehensive and accessible? Sure it would be a bonus, but probably not a priority if there's no slowdown of investment dollars coming in.
Every investment has specific parameters that contribute to its success or demise. Just because something was successful for someone else doesn't mean it will be for you, conversely if someone couldn't turn a profit on a particular class of assets doesn't necessarily mean the same for you.
Maybe these properties won't be a good investment - I'm humble enough to admit that. But honestly. I've not read (and I've gone through this entire thread and another one dedicated to the topic) any convincing arguments to absolutely avoid <50k properties. You have to do what makes sense to you and this does for me right now.
I'll check in somewhere down the line after some more time has gone by. Whatever happens, it's been one hell of a ride so far!
best wishes,
Jeremy
I purchased a house in Indy from Morris Invest in February of this year. In fact, I was interviewed in episode 5 of Clayton's podcast, How a Newbie Went from Collecting Cars to Collecting Rental Properties [Case Study]
I couldn't imagine that the process could have been much smoother than it was. The house was quickly rehabbed per the scope of work that I was sent and the PM placed a tenant very quickly. I'm into that property for ~$30k (paid cash) and it currently rents for $625/month.
I had to contact the PM once after receiving a letter from the "High Weeds & Grass" program for a lawn height violation. I forwarded it to the PM and they immediately got back to me and stated that they would contact the tenant, and if the tenant didn't cut the grass in time the PM's crew would take care of it. If it came to that, they would invoice the tenant. Aside from that, I've had no other issues. The rent hits my LLC's checking account monthly.
I echo the sentiments of a few other commenters in this thread. I was on the sidelines before listening to some of Clayton's interviews on BP and LMM, but hearing those interviews really lit a fire under me and I took action. I'm looking to purchase another 2 or 3 in 2017.
what property management company does morris invest use? their own in-house shop or do they outsource it?
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
Thank you so much for this! I've been trying to decide if I'm being overly cautious or diligent in looking for a turn key company, this is really helpful!
@Jesse Danzig @Ken Badziak I had a call with Dave with Morris Invest a few weeks ago and asked about the property management company. He sent an email with a first name a phone number only. I tried for a while to find the company online and couldn't so I finally called today and left a message, asking for a callback. The voicemail said "hi, you've reached ocean point" and then went on with if you've got a maintenance emergency, call this number, etc. After searching for a bit for a property management company by that name in the Indy I came up with not good results, one link here: http://www.theindychannel.com/news/call-6-investig...
Another whitepages-ish site listed a website that when clicked on said nothing but "account suspended". I'll reply with more info if I get a call back from them in the next few days...