Morris invest - any insights?
Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
Morris invest - any insights?
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Clayton MobleyPro Member
Birmingham, AL · Member since 2014 · 875 posts · 947 votesAs 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
414 Replies
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Jack Gibson got it... its not really you or someone of your wherewithal that I would try to protect on BP... from your profile your an accredited investor and if you think buying low end rentals is a good investment then thats you prerogative .. its when you get on here and influence the newbies .. because if you read the post on here most of those considering morris invest are new and buying their first deals.
History has proven those price points to be highly risky.. and for anyone to say they are not simply has not enough experience in the space.. to say that there are no vacancies or very little is simply not reality and or no maintenance ... you have folks that travelled to the city looked at the product reported back that the rehabs were the opposite of what your talking about.. you simply cannot do all that work in a 40k home.. not enough money in it to do that. Time will tell... you simply cannot change the behavior and living patterns of the tenant base that rents these homes.. NO PM can do this.. NO one can they are what they are.. HIGH risk HIGH touch HIgh maintenance tenants who are one flat tire away from defaulting on rent... or if they are HUD the kids destroy the homes over time.. LOL.. like I said I have owned over 350 of these.. I am not just making proclamations I am speaking from first world experiences of dealing with these homes since 2001. And Indy is one of my markets I know it well
- North Hollywood, CA · Member since 2016 · 23 posts · 9 votes10y
Hi Jay,
Thanks for your perspective. Having owned 350 of this class of rentals, did you collectively took net loss on them?
If so, can you explain what criteria you used to select these properties? Who did you have managing them and what span of time did you own and rent them?
Also, for the majority of properties, were they move in ready or did you pour a lot of money into them to get them rent ready?
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Jeremy Buttell my first 200 I was the lender and foreclosed on them from atl to chicago and every where in between it was 2008 to 2010 lost a few million in that fiasco.
then I bought 350 of them but most were B class some C sold out in 2013 and did fine.
- North Hollywood, CA · Member since 2016 · 23 posts · 9 votes10y
Good to hear Jack. I haven't had my properties with Morris Invest for a year yet (about 6 months now) but so far there haven't been any maintenance issues other than a tree/grass trimming that they were on that very quickly.
- Investor · Forked River, NJ · Member since 2016 · 7 posts · 21 votes10y
Originally posted by @Jack Gibson:
I find it very interesting that the majority of negative opinions here about Morris Invest and Natalie and Bert of OceanPointe are from other turnkey competitors... Who have never purchased their properties nor been on a tour. The other opinions seem to be from people who didn't purchase property either but just couldn't be patient enough to wait for a property to become available. There's a reason the properties are all cash and hard to get - they are great, so they're in high demand.
I have personally purchased over $1.3 MILLION so I believe I'm a LOT more qualified then any of these expert opinions. I purchased property because the previous 4 deals I did, 2 with other turnkeys, were terrible experiences. With OceanPointe, it's been literally life changing. My properties rent out immediately, rehab is quick, cost effective, and done well, management is excellent, ROI's are killer, and I trust this team 100%. These are some of the most loyal, least greedy (I know what they make on every deal), kind, caring and humble people you'll ever do business with.
There are certain weeks where I can see that PM is slow to return calls, especially rent disbursement week (they put investors returns as top priority), or there are some weeks where they are selling a ton of properties - but they always, 100% of the time, deliver.
You will not regret investing with Morris Invest and the PM will be exceptional. His podcasts are very informative, he adds lots of value, he offers a great product that he invests in, and he barely pitches it on each podcast. Not sure what the issue is with a podcaster promoting a product they believe in.
Did anyone stop and think that not providing any appliances cuts down on the majority of your repair bills post buy? In my home, the majority of repairs are for appliances, rarely or never for electrical, furnace, plumbing, roof, etc. I haven't had a repair bill on 15 units for 1 year. Incredible. If this prevented tenants from renting, why does PM have a 6% vacancy rate?
Just checked my bank account - my rent ACH just hit, completely passive and hassle free - and it was massive.
Important to hear from an investor with a lot of my own money in the game, vs competitors looking to draw clients away. Thanks for reading!
Thanks for posting this. I posted my experience with Morris Invest earlier in this thread and it was completely ignored. It's nice to see other investors that have had a positive experience with Clayton and his team.
Natalie is an absolute pleasure to deal with and has taken care of any issues that have come up promptly.
- Investor · Rocklin, CA · Member since 2016 · 83 posts · 77 votes10y
anyone have any updates for Morris invest ? I have talked with Larry about properties, but other than a few listings he emailed me(which seemed to good to be true), Morris invest has been silent. I got a phone call last week and never heard back. Odd as we have cash on hand............
- Brooklyn, NY · Member since 2016 · 2 posts · 2 votes10y
spoke with Morris invest... not impressed... and a little rude...
Asked for a few homes morris sold but they refused. Asked for any data and information about the homes they sell, and they don't provide any data.
Pretty scary people believe this will work. Basically they take your money, THEN purchase and rehab and introduce you to a property manager.
An amazing business for Morris. No risk and all profit. But I do feel bad for those who have already invested with him and never even seen the home or researched the trends. Hope I'm wrong and 7-10 years from now you are still making money.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Peter Klein its not 7 to 10 years they will never make it that long its 7 to 10 months.. lets see how they are doing.. this has got to be one of the all time classic's... its simply amazing that folks fall for this stuff
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes10y
I have been on this site for a very long time way even before my profile when it was a one page static page with links for bank REO foreclosures.
I have seen many,many turn key companies come on this site over the years and have zero staying power.
Everything is rah,rah,rah in the beginning and then you don't hear these investors who purchased years later saying everything is amazing. You hear crickets because they are likely too embarrassed to say anything from the nightmare happening.
Look at where the houses are. Forget what a TK company says. Check crime levels ,median income levels,population growth,school ratings, etc. You are looking for long term success in an area not the hood where people have some money now in an economic upswing but as soon as the economy dips again they are in trouble.
I haven't and will never buy residential houses especially in these types of areas.
It's "cash for trash" properties.
The anticipated ROI might appear to be higher but I know some investors who analyzed and held for many years and it didn't hold true. Turnover, damage to units, limited rent growth led to reduced returns over the long haul.
The people I know with millions,tens of millions, or even more do not want to own a bunch of SFR rentals in low income areas. They invest in commercial properties to own directly and also development projects for themselves. They also invest into sponsored deals. They are happy to get 7 to 8 percent pref return and a large equity kicker on the back end that blows away a straight higher cash flow potential play in a highly intensive lower quality asset.
People that have lots of money do not need the cash flow. They still grow but do it without the headache. I do not know many investors that stay with low income housing for the long haul. They tend to do it out of necessity for the low price point and then work up into other types of more quality assets as they need less cash flow and want little to no headache.
Ask these TK guys what are the DOWNSIDES to investing in low income turn keys? If they say they are not any..RUN,RUN very fast away from them. If they are saying no worries then they are selling, selling,selling the product. Anyone who inquires or questions they get no response. So essentially those types of TK companies are looking for YES investors and velocity without asking lots of questions to accelerate the profit and the dollar. That is short term thinking as a business and not long term client relationship thinking for a business. I know nothing about Morris Invest positive or negative.
For all investors out there just be careful with your hard earned dollars in life before investing with a company. It's not just about the cash flow or the property but the company and who is standing behind it 5,10,15,20 or more years down the road. No investment is perfect and things will happen. An investor wants to know that the sponsor or company that sold them the product will work together to solve the issues.
- Brooklyn, NY · Member since 2016 · 2 posts · 2 votes10y
100% agree with the last 2 @Jay Hinrichs @Joel Owens.
Everyone just please be careful, think about what you are doing when morris invest is asking you to TAKE from YOUR savings or RETIREMENT (40-80k). Think about your family. Your future.
Remember: It's no risk for him, he gets half of your retirement and puts it into HIS saving and retirement and you will NEVER hear from him again. For him it's a one-time transaction and 20k paycheck. For you, it's 40k and a lifetime of emotions and 40k less towards retirement.
If morris actually believes in this business:
- why not have the homes already purchasd/rehabed/rented before selling to you?
- (or) why not model the business to partner with you instead?
- (or) why not invest in all the good ones himself?
- (or) why not ask you for money as investors so he can purchase 80 homes and make $560,000 a year? 80 because morris told me they closed 80 deals over the summer.
- (or) why do banks NOT approve of this?
The answer is, he doesn't see these homes as long term investments. Hear his comments when he talks, try to understand his personality you will notice he himself thinks short term only.
Ultimately its your choice. Just do the research PLEASE and ask those QUESTIONS. Think about it a second before you give up your whole savings and retirement for this.
Just spoke with Dave from Morris Invest. I signed up for a call on a whim a few weeks ago. Dave was very casual and polite. He followed up with an email showing a property and a gallery of one of the rehabs. It sounds like the marketing, whether intentional or not, has overwhelmed the company a bit.
- Windham, NH · Member since 2016 · 9 posts · 11 votes10y
I talked to Larry from Morris Invest a few days ago. I felt he was very polite and not pushy at all. He did say that their volume on home sales are WAY up (like 5-10/month at the beginning of the year to 50-60/month now). The house he sent me that was rehabbed was in horrible condition before the rehab (as in, you couldn't pay most people to stay there for a night). Honestly, that rehab didn't make me feel better, but rather made me scared (what do the other houses look like in that neighborhood)! But maybe they have a strategy, they can buy all the crappy houses in a neighborhood, clean them up, and bring up the values of everything. BTW, I am a newbie investor that hasn't invested in real estate at all, but was intrigued by the Morris podcasts.
Originally posted by @Mark Senecal:
Many thanks to all the posters. I am currently in the market for a turnkey and know (and like) Clayton and Natalie Morris from their tech reporter days. Based on what I have read above Morris Invest is off the list.
Same here! Wow..I owe a huge thanks to everybody contributing to this thread and the various points of views stated here..
Just getting started with real estate investing we've stumbled upon Clayton Morris' podcast and the numbers just sounded too good to be true.
Having 'known' Clayton from his podcast appearances the whole thing didn't seem like a scam and I had my initial email to Clayton and list of questions for the call already prepared.. but having read through all the comments I'm now glad I did some more digging around and joined the BP community. Guess we'll better do some thorough research before investing in our first rental property!
Too good to be true indeed.
Cheers,
Jan- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Christopher Ryan 40 to 50 a month I think is a bit of puffing one would be hard pressed to put that many houses into contract in one month.. and if there are that many derelict houses in one area that can be bought at those price points then your squarely in the Ghetto Hood.. and once you have owned your rental the cycle will repeat... it just is what it is in those areas.. and neighborhoods they don't get better unless the tenants are completely different ERGO inner city renovations and displacement of tenants and replace them with buyers not renters... If you look at Bates Hendrix and fountain square you will see exactly what I mean.. RETAIL rehabbers are moving and so are homeowners.. these low end neighborhoods stay the same or get worse ... its a fact.
- Windham, NH · Member since 2016 · 9 posts · 11 votes10y
Thanks. I have not heard back from Morris invest. They really did make it seem "easy", so my too good to be true radar was blaring, but I had to do more investigation. Luckily this has lead me here and I can continue to learn/investigate before making "newbie" mistakes. That being said, I always find I have to really get my feet wet and make mistakes before I even know what kind of questions/things to look for, which is why I was willing to investigate Morris Invest more. The podcasts are still incredibly useful, even if they might also be an Ad in disguise for the business.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Christopher Ryan Yup we are all on here to make money and the Pod cast are defiantly a way for vendors to get a lot of attention and draw business to themselves..so you gut instinct is correct... its a marketing tool for sure.
however if you just go through this thread.. you will see some of the top Turn key providers in the country commenting on the lack of sustainability for many reasons with these types of homes.. and what this company has done is sucked in the new investor or the ones with limited capital.. so it was brilliant on their part they make a ton of dough and you end up with as Ben Lybovich likes to call them a 30 to 40k PIG.. and believe me you will rue the day you ever thought this was any kind of way to real estate wealth.. the only way one can make this asset work is to own ALOT of them and I mean a LOT like 50 to 200.. then its a business plane and simple these are not a passive investment by any stretch.
- Rental Property Investor · Wentworth Falls, NSW · Member since 2016 · 20 posts · 24 votes10y
Hi Guys,
Any Australians on BiggerPockets used Morris Invest? Clayton mentioned on his podcast that he has clients from Australia. Would be interested in talking to find out what the experience was like. Have listened to all Clayton's podcasts and interviews on BiggerPockets. Sounds like he wholesales these properties to his client base. Guessing he uses the funds he makes in wholesaling to then buy and hold his own properties. He also mentions some are rehabbed prior to sale while others are rehabbed post sale.
Looking forward to hearing more stories on people's experiences. I'm planning on pulling some equity out of my house and getting into some turnkey properties soon.
Kind regards,
Suvir
- Miami Lakes, FL · Member since 2015 · 133 posts · 83 votes10y
Originally posted by @Suvir Salins:
Hi Guys,
Any Australians on BiggerPockets used Morris Invest? Clayton mentioned on his podcast that he has clients from Australia. Would be interested in talking to find out what the experience was like. Have listened to all Clayton's podcasts and interviews on BiggerPockets. Sounds like he wholesales these properties to his client base. Guessing he uses the funds he makes in wholesaling to then buy and hold his own properties. He also mentions some are rehabbed prior to sale while others are rehabbed post sale.
Looking forward to hearing more stories on people's experiences. I'm planning on pulling some equity out of my house and getting into some turnkey properties soon.
Kind regards,
Suvir
Look up Engelo Rumora at www.OhioCashflow.com
He's a dingo from Down Undah just like yourself. His company gets much praise, and he's in the same general area as Morris; I.e., the Midwest.
- 10yEngelo RumoraBusiness MemberInvestor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
Originally posted by @Ken Badziak:
Originally posted by @Suvir Salins:
Hi Guys,
Any Australians on BiggerPockets used Morris Invest? Clayton mentioned on his podcast that he has clients from Australia. Would be interested in talking to find out what the experience was like. Have listened to all Clayton's podcasts and interviews on BiggerPockets. Sounds like he wholesales these properties to his client base. Guessing he uses the funds he makes in wholesaling to then buy and hold his own properties. He also mentions some are rehabbed prior to sale while others are rehabbed post sale.
Looking forward to hearing more stories on people's experiences. I'm planning on pulling some equity out of my house and getting into some turnkey properties soon.
Kind regards,
Suvir
Look up Engelo Rumora at www.OhioCashflow.com
He's a dingo from Down Undah just like yourself. His company gets much praise, and he's in the same general area as Morris; I.e., the Midwest.
Thanks Ken,
Hi Suvir,
I'm happy to help.
I've been living in the US for almost 5 years and have done 400+ deals.
I also run a cool turnkey company called Ohio Cashflow and we have established a great reputation over the years wth helping out of state and country investors enter the real estate investment game.
Thanks and don't hesitate to reach out
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Suvir Salins exercise caution just become these homes are the price of stamp duty in your country does not make them good investments.
I used to post of the property investors forum in your country.. and I met the Dingo there 6 years ago. he has done a nice job ... be very very careful.. and please read the entire thread..
working in the Ghetto in the US markets like they are doing is a great way to lose all your money.. and definatly do not refi your prime AU property to buy one of these.
- Rental Property Investor · Wentworth Falls, NSW · Member since 2016 · 20 posts · 24 votes10y
Hi @Jay Hinrichs,
Have read this thread and all the others I could find on BP on Morris Invest. Believe me I'm naturally cautious but also mindful of getting caught up in analysis paralysis. So totally agree that just because it's cheap doesn't make it good. Doing my DD via BP and any and all other means. Clayton spends a lot of time talking about these places being C class but not a ghetto market. He classes the tenants as good, hard working types who pay regularly and don't damage the properties. However he only seems to have had about 5 years doing C properties, and about 15 years prior to that in A properties. His move from A to C, according to the podcast, was for ROI and less troublesome tenants. From this thread, other investors have had the opposite experience with C tenants ie big turnover and high expenses. Morris Invest avoids some expense by loading that up-front in rehab. I thought the rehab costs sounded very low, but being an Aussie had thought that just might be how it is over there, given your labor rates are much lower than ours. However reading the threads, you local guys are skeptical as well. There was an interesting BP article on turnkey providers that gave me some perspective as to why some on these threads were complaining about not enough communications from Morris Invest. See https://www.biggerpockets.com/renewsblog/truth-tur... which explains why. So this didn't bother me. Also not surprised given their podcast has become so popular so that they're getting 40-50 deal requests/month. I also agree that I doubt they're able to service that many requests per month. If they are I'd start to worry about how well they are vetting deals.
I'm interested in your comment about TK investors lasting only 7-10 mths. If that's the case we should be hearing soon, if they are brave enough, from Morris Invest clients, as many should be in that range now.
Both Clayton and Natali are seasoned television presenters so they market themselves very well. They've had a great deal of well known real estate gurus on their show. I was at first thinking surely these guys wouldn't rip people off to avoid their highly public reputations being tarnished. But then again, if they ended up ripping off a few hundred people, they'd make a heap of money and what's a few hundred people going to do to their reputations. So at this stage still not convinced either way. Maybe others haven't made it work in these areas, but maybe Clayton has. Time will tell.
Thanks for the recommendation re @Engelo Rumora, and thanks to you too @Ken Badziak. Will check out your site and definitely reach out to you in the near future. Itching to get started in this business but only when I feel I've got an accurate picture.
Many thanks to all,
Suvir
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes10y
Suvir if you have a million and want to drop 40k on a PIG property then it's a gamble you might want to take.
If you have 60k total and 40k is going into this property from overseas in a rougher area you could end up taking a loss.
I have never heard of C tenants being less of a headache than A tenants. A tenants might want a nicer product to live in but generally the area appreciates more and you have stronger rent growth.
It seems across the country people are loading up on these junky houses. Next they will be refinancing these out and these properties will re-trade again when the next shoe drops. Make sure you have the patience to deal with residential tenants. I personally do not like it at all which is why I do not invest in residential.
- Rental Property Investor · Wentworth Falls, NSW · Member since 2016 · 20 posts · 24 votes10y
Thanks for the comment @Joel Owens Yes agree if someone has money to lose then making a risky investment is fine. I'm still in the process of determining what is and isn't risky. My understanding from Clayton is A tenants were constantly hassling him about the littlest things and so were costing him in time and money. Also the ROI was very low for the As. While his C tenants are in a newly rehabbed property and don't complain about little things, only major items, which the rehab should put off for a long time. Also there are grades of C tenants and the ones his PM filters for are hard-working, blue collar workers who are dependable. Gotta have a good PM. As for appreciation it seems he's not so worried about that in the short-term, more interested in cashflow. If the PM is good hopefully I don't need patience to deal with residential tenants :) The more I research the more interested in either multi-family or commercial I am. But as with most newbie investors, don't have huge sums to drop, so I guess that's why we're all drawn to these cheap properties with high ROI as a way into the market. Mostly no cashflow in Australia, so thus my interest in the US market.
- Investor · Mount Bethel, PA · Member since 2013 · 45 posts · 29 votes10y
I did extensive research and phone calls to both Morris Invest and Norada. Morris Invest only has C class properties which I'm not comfortable with for out of state investing. My call with Norada was much more in depth and informative. As we were getting ready to try our first home with Norada we stumbled across a local duplex that we couldn't pass on so perhaps next house. Please let us know what you end up doing and your experience.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Suvir Salins:
Thanks for the comment @Joel Owens Yes agree if someone has money to lose then making a risky investment is fine. I'm still in the process of determining what is and isn't risky. My understanding from Clayton is A tenants were constantly hassling him about the littlest things and so were costing him in time and money. Also the ROI was very low for the As. While his C tenants are in a newly rehabbed property and don't complain about little things, only major items, which the rehab should put off for a long time. Also there are grades of C tenants and the ones his PM filters for are hard-working, blue collar workers who are dependable. Gotta have a good PM. As for appreciation it seems he's not so worried about that in the short-term, more interested in cashflow. If the PM is good hopefully I don't need patience to deal with residential tenants :) The more I research the more interested in either multi-family or commercial I am. But as with most newbie investors, don't have huge sums to drop, so I guess that's why we're all drawn to these cheap properties with high ROI as a way into the market. Mostly no cashflow in Australia, so thus my interest in the US market.
this simply is not TRUE C class tenants being less of a hassle than A class.. Oh man I can't believe anyone would believe that statement.. Your right having a great POD cast or TV presence is influencing people and giving them a total false sense of security.. I personally have been in this space about as long as anyone 20 plus years and a few thousands transactions under my belt.
People that lose these properties or have bad experience simply will not post they just slink off into the sunset never to be heard of again.. mainly they are embarrassed .
I fund a lot of this stuff as my day job.. I have been funding many buys this past year from AUssies selling out of their superannation funds.. and they have been selling for 6 to 15k per door for homes they paid 50 to 70k for.. taking huge financial loss's.. the guys I fund are buying them and they do this for a living they run them themselves... not on selling them to out of area investors.. there is a place for this C and D inventory but its not appropriate long term for out of area investors.
But then again Buy one and see what happens... LOL
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