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
- Miami Lakes, FL · Member since 2015 · 133 posts · 83 votes9y
Originally posted by : @Suvir
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.
If you've got $50k to drop on a turnkey property then you've just found yourself the necessary 25% down payment on a $200k multi family.
And depending on what market you're looking at, that could be something as small as a duplex in Ft. Lauderdale, or an 8-plex in many of the great midwestern markets...
- Rental Property Investor · Wentworth Falls, NSW · Member since 2016 · 20 posts · 24 votes9y
Originally posted by @Jay Hinrichs:
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
That's why I'm glad you're posting. Newbies can be convinced of all sorts of things especially when the podcast features guests with 20+ year experience and 500+ units saying the same thing. Vested interests I think.
I've heard lots of stories of Aussies losing using their super funds. But the impression I got was they bought in crazy areas, didn't do DD and got caught with huge back taxes or other similar things, not C class properties that tanked. You've convinced me to aim for at least Bs. Seem to be a good compromise between ROI, sustainability and effort. Agree?
- Rental Property Investor · Wentworth Falls, NSW · Member since 2016 · 20 posts · 24 votes9y
Originally posted by @Ken Badziak:
Originally posted by : @Suvir
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.
If you've got $50k to drop on a turnkey property then you've just found yourself the necessary 25% down payment on a $200k multi family.
And depending on what market you're looking at, that could be something as small as a duplex in Ft. Lauderdale, or an 8-plex in many of the great midwestern markets...
Well my funds will come out of a HELOC on my primary residence here in Australia. So being new to the US market ie no credit history in your system, I was thinking I wouldn't be able to get further financing from your local lenders. Furthermore I'm not comfortable going that big for a first property. Maybe at the back end of this first deal I'll refi into something like the 8-plex. Happy to hear about alternative funding arrangements though.
- Los Angeles, CA · Member since 2016 · 41 posts · 29 votes9y
Hello, I'm newbie investor in Los Angeles and house hacking a duplex in East Los Angeles. I was lucky enough to buy a Property C at the right time where it began gentrify to Property B with crazy appreciation over the years since purchasing. It was a fixer unit and I intentionally placed my rental higher than my neighbors to attract A to B tenants and it worked out beautifully.
@Suvir Salins Trust me on this Class C is way more of a hassle than A class. I used to work as a rent collector and handling complaints for a guy who owned bunch of multi units from Class A to C in Los Angeles to Santa Monica. In my experience, Class C owners complained over little things all the time even breaking things on purpose to delay paying rent under the protection of 'Rent Control' in Los Angeles. I rarely had to go after Class A/B for rents mostly were just simple repair request or problem getting along with other neighbors so I don't know what Morris is talking about. Class C can be a nightmare to deal with and I can't even imagine how you are going to comprehend this from Australia lol. I understand the attraction is a turn key operations, but have you considered a backup plan when they bail out on you or bad things happens over and over finding yourself needing to find a new property management?
Having said that, I do like listening to Morris podcast with a grain of salt, first I love his voice, haha and he has really good episodes as well. But what I hate about his podcast is the way he markets his business like its relatively risk free and simple and easy "Just rehab really nicely and find 'hardworking honest' tenants" sounds way easier than done, all landlords want that ; ). In my experience there's no such thing as a risk free investment so you have to consider all the variables when things just don't work out. I personally consider "Turn key" business a high risk investment in any type of properties. Morris is just buying cheap and selling high without taking any risk. This is a great business for him for sure but I'm not so sure for investors.
Hope you find a good investment opportunity.
- Rental Property Investor · Wentworth Falls, NSW · Member since 2016 · 20 posts · 24 votes9y
Originally posted by @Michael Choi:
Hello, I'm newbie investor in Los Angeles and house hacking a duplex in East Los Angeles. I was lucky enough to buy a Property C at the right time where it began gentrify to Property B with crazy appreciation over the years since purchasing. It was a fixer unit and I intentionally placed my rental higher than my neighbors to attract A to B tenants and it worked out beautifully.
@Suvir Salins Trust me on this Class C is way more of a hassle than A class. I used to work as a rent collector and handling complaints for a guy who owned bunch of multi units from Class A to C in Los Angeles to Santa Monica. In my experience, Class C owners complained over little things all the time even breaking things on purpose to delay paying rent under the protection of 'Rent Control' in Los Angeles. I rarely had to go after Class A/B for rents mostly were just simple repair request or problem getting along with other neighbors so I don't know what Morris is talking about. Class C can be a nightmare to deal with and I can't even imagine how you are going to comprehend this from Australia lol. I understand the attraction is a turn key operations, but have you considered a backup plan when they bail out on you or bad things happens over and over finding yourself needing to find a new property management?
Having said that, I do like listening to Morris podcast with a grain of salt, first I love his voice, haha and he has really good episodes as well. But what I hate about his podcast is the way he markets his business like its relatively risk free and simple and easy "Just rehab really nicely and find 'hardworking honest' tenants" sounds way easier than done, all landlords want that ; ). In my experience there's no such thing as a risk free investment so you have to consider all the variables when things just don't work out. I personally consider "Turn key" business a high risk investment in any type of properties. Morris is just buying cheap and selling high without taking any risk. This is a great business for him for sure but I'm not so sure for investors.
Hope you find a good investment opportunity.
Thanks for your feedback Michael. Consider me convinced re C tenants :) Can understand rent controlled areas being a nightmare so was planning on avoiding those states. I was thinking that to remotely manage a property a PM was the way to go as I couldn't comprehend remotely managing myself. As for a backup plan if a PM fails over and over what would you suggest as the best way of replacing the PM? I'd want the initial PM to setup good communications practices with me ie regular emails/calls on a set schedule, send before and after photos of issues, let me know ahead of time what their strategy is for handling bad tenants etc etc. If they then start failing in this I'd have some other PMs pre-vetted and call them up to take over. Not sure if there is a defined protocol for replacing a PM ie certain amount of notice and paperwork, but those are my general thoughts.
I agree the podcast has useful info but that generally he makes it sound easy. That's why I turned to BP to test the hype.
I never believe things to be risk free but rather try to ascertain what the rough risk to reward ratio is in order to determine whether I should pull the trigger or not.
I understand I'd be paying a premium buying via a TK but the benefit for an international, new investor is you get the rehab, tenants and PM sorted locally, which for my first investment, I'm willing to pay for rather than trying to do this myself.
So atm I'm going to keep reviewing various turnkey operators and educating myself.
Hope the duplex deal goes well.
- Investor · Moseley, VA · Member since 2016 · 49 posts · 28 votes9y
Originally posted by @Merritt Whitman:
@Doug Poff I highly recommend you visit Clayton's operation in Indianapolis before you buy a property from him. I visited about two months ago and met with his acquisitions manager and property manager--it was an education I'll never forget. In case you're interested I detailed my experience on a different thread entitled "Suprising how little discussion of RE scams here". I would heed the advice already given by @Jay Hinrichs, @Chris Clothier, and others.
Merrit,
I read your thread, YIKES!
MorrisInvest posted a YouTube video (https://www.youtube.com/watch?v=W7rC2Dl3gs4) Sep 11, 2016 about a rehab project (see attached), but does not list the neighborhood or location.
I was wondering 1) is this the type of neighborhood you described - it does not look like what I read in your post, and 2) was this the type of home and rehab 'quality' you describe.
@James Wise in relation to the video, what would you characterize this neighborhood as? C, C+, C-, maybe even B- ? I know the classification is fairly subjective, but would like your input to use as a future gauge.
@Jay Hinrichs I know the video is short, but I'm interested in your opinions on the actual 'rehab' items that can be seen - and any feedback overall.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes9y
Originally posted by @Doug Poff:
Originally posted by @Merritt Whitman:
@Doug Poff I highly recommend you visit Clayton's operation in Indianapolis before you buy a property from him. I visited about two months ago and met with his acquisitions manager and property manager--it was an education I'll never forget. In case you're interested I detailed my experience on a different thread entitled "Suprising how little discussion of RE scams here". I would heed the advice already given by @Jay Hinrichs, @Chris Clothier, and others.
Merrit,
I read your thread, YIKES!
MorrisInvest posted a YouTube video (https://www.youtube.com/watch?v=W7rC2Dl3gs4) Sep 11, 2016 about a rehab project (see attached), but does not list the neighborhood or location.
I was wondering 1) is this the type of neighborhood you described - it does not look like what I read in your post, and 2) was this the type of home and rehab 'quality' you describe.
@James Wise in relation to the video, what would you characterize this neighborhood as? C, C+, C-, maybe even B- ? I know the classification is fairly subjective, but would like your input to use as a future gauge.
@Jay Hinrichs I know the video is short, but I'm interested in your opinions on the actual 'rehab' items that can be seen - and any feedback overall.
Without knowing anything other then what I saw in the video I would say somewhere between C & B.
Houses were roughly 1,200 sq ft. Looked to be older, yards relatively well kept only saw one or two homes that looked ruffed up. Decent cars in the streets, nothing fancy but no junkers either.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Doug Poff I am on an amtrack train today and its blocking my update of adobe so I can't look at the U tube
however I would take first hand accounts from those who took the time the money and effort to view the product in person.... videos are great but at the end of the day they are videos.
I just did a few rehabs in Indy that we are going to sell to investors.. ( normally do retail flips in Indy).
so I guess you could call them turn key..
However I can say this .. our purchase price of the asset BEFORE rehab is far greater than what these homes are selling for after rehab.. so you can imagine the quality difference and tenant base difference
I too fell for the blue collar bread and butter neighborhood pitch when I first got in to this in the early 2000's..... there is absolutely no correlation about blue collar and consistent rent. the idea that C or worse class and I would say based on price points I would venture to guess most of this stuff is
- North Hollywood, CA · Member since 2016 · 23 posts · 9 votes9y
@Jay Hinrichs "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."
Hi Jay,
With regards to one of your earlier comments about people being embarrassed, thats why we don't hear from them... That's a possibility I suppose, but from my experience, its those that are burned who are most vocal. Quite the contrary, its usually those that buy a product or service and are satisfied that go about their lives without taking the time to write about it. I actually found this thread because I wanted to give friends a well rounded view, beyond my own positive experience. Its unfortunate that this thread is primarily comprised of hypotheticals and speculation. I was hoping for a few more clients to provide their perspectives, for better or worse.
Assuming Morris Invest has been as successful as some have implied, there hasn't been much (any?) negative feedback from actual clients on this thread apart from some tire kicking without actually pulling the trigger. Those few clients that have, were positive. I think thats something to consider.
My 7th month is right around the corner and there are many that are way beyond that which came before me. Rent continues to come in month after month without any real drama. Sure, that could all change tomorrow, but I've yet to see any or hear any specific indications as to why it will. If the economy tanks, perhaps more factors will confirm what the nay sayers claim, I just don't honestly have the answer to that. But, I'm here to learn one way or another.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Jeremy Buttell I hear what your saying and in a consumer products setting.. Like my mac and cheese is no good or my batteries did not last 24 months.. or resturant reviews.
but I have been in this space for a long time now.. and you simply do not see it..
I fund this stuff for a living.. I can tell you I see the HUDS.. and those homes you bought were LOST by someone who came before you... who gave up ended up with a trashed home and sold it to a morris invest for a substantial loss.. its the reality. and of course you don't know what you don't know.. and of course its not every one.. But again if you went out and actually looked at what you bought if you looked at it before reno.. why do you think it needed reno in the first place ????? I know the answer do you LOL.... its not only me read up on top of this thread.. many of the most experienced and successful in the space left this price point a decade ago as its not financially sustainable..
- Stuart, FL · Member since 2016 · 15 posts · 10 votes9yI decided to move ahead with a property through Morris Invest. The purchase and rehab part of it went fairly well. We are sort of in limbo with the property management company. Not much response or any actually regarding some questions we have. I'll update this post as we make progress. Hopefully it is just a simple miscommunication that will be resolved quickly. Has anyone had dealings with Oceanpointe Investments LLC?
- Investor · Forked River, NJ · Member since 2016 · 7 posts · 21 votes9y
Originally posted by @Alex Peralta:
I decided to move ahead with a property through Morris Invest. The purchase and rehab part of it went fairly well. We are sort of in limbo with the property management company. Not much response or any actually regarding some questions we have. I'll update this post as we make progress. Hopefully it is just a simple miscommunication that will be resolved quickly. Has anyone had dealings with Oceanpointe Investments LLC?
Hi Alex, Oceanpointe manages my property in Indy. I've never had an issue with them, Natalie has always been quick to respond.
- Stuart, FL · Member since 2016 · 15 posts · 10 votes9y
Im hoping it is just a minor oversight. As of right now still waiting on a reply to emails and phone.
- North Hollywood, CA · Member since 2016 · 23 posts · 9 votes9y
Hi Alex,
It's your business so if it's an urgent matter, I recommend sticking with calling them rather than waiting, you'll get ahold of someone. Email hasn't been the fastest, but everything as ultimately been resolved when I reach out.
Jeremy
- Los Angeles, CA · Member since 2016 · 41 posts · 29 votes9y
Have you guys read this blog post today? https://www.biggerpockets.com/renewsblog/2016-inve...
- Stuart, FL · Member since 2016 · 15 posts · 10 votes9y
Originally posted by @Alex Peralta:
I decided to move ahead with a property through Morris Invest. The purchase and rehab part of it went fairly well. We are sort of in limbo with the property management company. Not much response or any actually regarding some questions we have. I'll update this post as we make progress. Hopefully it is just a simple miscommunication that will be resolved quickly. Has anyone had dealings with Oceanpointe Investments LLC?
We finally got a call back and got the needed info. Hopefully the transition they are going through caused a glitch and will all work itself out in a few weeks.
- Bonita, CA · Member since 2016 · 4 posts · 0 votes9y
Looks like they just moved offices and got some new people. I was also having a bit of trouble reaching them via email. I called the investor line and someone answered. The lady that answered said she did not have an answer for me at the moment but she would look into and call me. I got a call back about 20 minutes latter. She did mention that they were working to overcome some issues due to their quick growth. I did never get an answer to the emails though.
- Stuart, FL · Member since 2016 · 15 posts · 10 votes9y
Most everything has been answered. We were trying both email and phone calls. Hope it's just a one time thing. Other than that glitch, all went well, tenants in place and a couple of months rent to be deposited.
- Indianapolis, IN · Member since 2013 · 210 posts · 149 votes9y
I find it interesting that with all your advice, along with some other people on here, that people still buy these $40K TK properties anyway. Do they really think it's going to turn out different? I am curious.
- North, England · Member since 2016 · 3 posts · 2 votes9y
I am from the UK. My parents have 3 rental properties in the UK and were looking for another one. I told them about Clayton’s properties in Indiana. We were about to go for it, but I couldn’t shake the feeling that it seemed to good to be true. I am so glad I found this thread.
There’s a lot of information in this thread. I made a summary for my own benefit and I am posting it in case it helps anyone else:
SUMMARY
PROS
There are four reviews from people who have invested with Clayton. (Jeremy Buttell, Matthew Stellas, Jack Gibson Jeremy Buttell and Alex Peralta)
Key points form reviews:
- Happy with the service and property management company.
- Matthew notes that the property management company was quick to deal with an overgrown lawn issue.
- Alex notes that Clayton’s company, however, was slow to respond at times.
- Jemery Buttell is very positive after owning a Clayton house for 7 months.
CONS
The property management company is Ocean Pointe, which has been featured on TV news for poor service. (However the reviews posted in the Pros above suggest that Ocean Pointe are excellent)
There are two reviews from people who went to the properties in Indianapolis, but then decided not to buy. (Merritt Whitman, Shane.M)
On the podcast Clayton frequently says that as the properties are fully rehabbed, he generally has virtually no maintenance related problems for 10 years.
Both Merritt’s and Shane’s experience of viewing the properties don’t match with this. They were shown that the properties aren’t fully rehabbed, but just cosmetically improved. This means the risk of problems in the property is far higher than Clayton suggests.
There is a lot of feedback from people who have not used Clayton but have had experience in Indianapolis.
Their key points:
- Most of the areas are run down, so they attract poor ‘C class’ tenants, who may cause damage, have trouble paying rent or may leave after a few months. This is contrast to Clayton’s claims that C class tenants are generally better than A class, as they give no hassle and just pay on time.
- Indiana is a very diverse area. Some streets can be good, but right next to them can be a run down area. Hence, it’s a bit of a lottery as to what you might get.
- Because the properties are in a bad area, it will be difficult for them to be used as leverage for finance (i.e. the properties have no real equity)
- Because the properties are in a bad area, they will be very difficult to sell at a later date.
OVERALL:
The only advantage to these properties is their cash flow (from the rent). They don’t offer the usual property benefits of increasing in value or providing leverage (but to be fair, Clayton does advertise them as “Buy and Hold for Life”).
Reviews of people who have invested suggest that the cash flow provided is as Clayton promises. However, these reviewers haven’t had the property long enough to give a long term view.
Risks of damage, breakdowns and vacancies could also eat up into the cash flow provided.
After reading this thread, I am going to think about going for it. The cash flow is still very tempting. But I don’t think Clayton’s podcast has done a good job of communicating the risks, especially if you get a bad tenant who will probably eat up all of the cash flow (Clayton’s podcast really down plays this, especially with his comments about C class tenants being relatively hassle free). I guess this risk would be high for someone like me living in the UK, because it's not really possible to see the property before buying it.
I didn’t realize there were other turn key companies, so I think I am going to look into them first.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Madhu Sharma there are literally 100 turn key companies in the US working virtually every market were properties can cash flow with 20 to 25% down.
and there are reviews of many of them and pod casts with actual owners.. suggest you find those .. I wrote and e book that I give away it was for Australians who were buying in the US sight unseen and were getting taken on these low end deals.. not knowing what they really were doing.. happy to send that along if you wish.. no recommendations of companies just what to look out for when picking a company.
The most troubling quote from all these posts is the " C class tenants are easier to manage than A class and that there should be no cap ex in 10 years time" I have looked at some of these properties I know Indy and they are C and D at best.. and this is just not a true statement.. Most of the top teir turn key companies in the US started in these asset class's and soon moved up when it became evident that these simply will not perform over the long term.. And these companies have to manage these they no longer wished to manage props that were so tough to manage... there is a reason.
But a good description of the thread and I would take the feed back of the two gentlemen who actually flew out there and walked the properties.. they were excited to buy but became disenchanted once they realized what they were going to end up with.
- North, England · Member since 2016 · 3 posts · 2 votes9y
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Madhu Sharma send me a colleague request and will get it to you
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes9y
Just remember some of these TK companies want to sell,sell,sell to make that money before they go from BOOM to BUST.
Many TK companies have tried to scale and get big but I have only seen a few with staying power for years like Chris Clothier at Memphis Invest.
Also remember and think about new bigger pockets accounts with posters coming on this board giving positive reviews yet have no picture of themselves on the profile. Not saying it is the case but in the past some companies will send in shills to open an account and pump a company with positive reviews to create a (buy in) and frenzy etc.
Be careful out there folks unless you have money to flush down the toilet. Sometimes people put blinders on wanting to believe in something so bad does not make it true. If you are buying low end rentals (stay local) where you can manage it. Your cash flow you think you have try paying for plane costs, meals,hotel, etc. going down to fix a problem because you can't get a response back.
I do not buy low end turn key but if you look through bigger pockets archives you will see time after time where people lost money.
- Developer · Nashville, TN · Member since 2016 · 484 posts · 406 votes9y
We've buy from the same supplier that Clayton uses, with excellent results. I currently have 3 properties in these "C-class" areas, and they are performing well. The management company keeps them rented, and notwithstanding other comments above, our properties are fully rehabbed and in great shape. They're not houses I'd want to live in personally, but they make great rentals.
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