So here is a deal they offer. I would like you to comment on it.

Bare in mind that this was sent to a person I know that didn't even have an original conversation with them.

I guess they were put on a mailing list regardless (while still waiting for a conversation).

Here it goes:

1045 Almeda St Jacksonville, FL 32209

Bedrooms: 2 

Bathrooms: 1

Monthly Rent: $800.00

Per Year Taxes: $293.00

Acquisition Cost: $49,500.00

Now quick internet research shows that the house was purchased on the 15th of November for 33.000.

Rentometer says the rent is 600-650 (not 800 as advertised).

They are putting 16.500 in it, i guess to rehab it. Maybe that would increase the rent, but by that much??

Still how much can a 2 bedroom 1 bathroom rent in a shady part of Jacksonville .

The crime seems pretty bad to me:

31 COUNTS OF ASSAULT

27 COUNTS OF SHOOTING

21 ARRESTS 

https://www.trulia.com/real_estate/Robinson_s_Addi...

If somebody familiar with Jackson would comment is this a war zone?

I live in Oakland,CA and even though the areas are red in trulia rarely we have so many shots fired, and arrests, but it seems large parts of Jacksonville are war zones, or am I wrong?

I would say this deal sucks because it is a war zone, but would love to hear other opinions.

Thanks in advance

Hi. 32209, 32206, 32254 are rough areas. I personally tell my realtor to not send me properties from these areas. I ignore these areas even though the numbers are amazing. I would pass. 

They are trying to entice the out of state investor with these magical numbers.

A 2bd 1bath will rent for 600 or so in JAX.

OK so let me get this straight..  someone bought it for 33k in November  ( wholesale pre rehab price we assume correct) and they are saying they are going to put 16k into I.

and they will sell it to you for 49k.. is that right ?

now how would anyone stay in business not making any profit.. ?

is the management company Oceanpointe.. they just got shut down in INdy by the AG.. and to get shut down and lose your license is pretty serious offense you had to have REALLY done something not just clients whinning.. there had to be actual provable misdeeds..

Not Sure if Morris will continue there without their ground partner but I would really be careful of any property in any market at those price points that's in a major metro area.. smaller berg out in the cornfields of the mid west not so much.. but in those areas those are pretty much hoodie type props.. that only look amazing on paper..

@Milos N. There’s a lot on here about Morris invest. Just a few posts above this is another thread discussing how their PM company just got shut down by the state.

As for this “deal” I’d pass. Pass is probably understatement. I’d punt and not look back.

Someone bought a house for 33k, they’re good to sell it to you for 49 and then you pay for 16k more to rehab if. I’m guessing there’s no way this house would ever be worth that much or more.

There are ample threads on here about Morris invest and most of what I’ve seen is negative, in fact it’s overwhelmingly negative.

Thanks @Mushfiq S, @CalebH9, @JLH thank you for the input.

I wasn't planning on purchasing this. Just wanted to put it out there, so that everyone sees what kind of deals we are talking about. Maybe it will help some people decide whether to use MI or not.

PS I can't for the life of me understand how does mentioning people work in this forum

No no no no. I am an investor and started as an investor, I had enough properties quit my job and the opened a property management company. I say this because I am an investor first property manager second. I will not buy homes in those zips, I will not work with investors buying there, and I won't manage there. It's just not worth it. you will have a hard time finding a manger for that area as well, have tons of evictions and lots of money spent in turns.

we talking about the same place? Has tenant in place at 550... and sold for 27k

https://www.redfin.com/FL/Jacksonville/1045-Almeda-St-32209/home/108820872

Holy moly, it would be as if you were looking for the worst possible location available. These are rarely turnkey for the remote investor. As mentioned, seems like some of the locals might not even take it for free.

One recent poster took videos of his " Morris freedom number" rental. Morris used more leverage to get him to take the truth videos down. Be extra careful, don't fall for the bait and switch marketing and lifestyle BS REI promoters, even if they were on a BP podcast twice!

The area you mention is indeed a rough area, but so it Compton CA and houses there are $100k.  For Florida, Jacksonville is the cheapest rental house market given its economy/population to price point ratio. What that equates to is very high rental demand. The challenge is just managing that sort of property with high-risk tenants. Your only other option for rental housing in Jax will be at the 80k+ price point and even then, you are just moving from a 650 rent to an 800 / 900 rent, so that said, MI is correct that you will just bet on "equity" rather than cash flow. Bottom line is if you don't have a manager that "manages" property, then you won't succeed. Most so called Jax "managers" do nothing because their properties are at high price points with no-trouble renters, so of course it behooves that lot to only take clients with easy to rent properties. But that sort of property you should just manage yourself. Rent investment is just like anything else. A good analogy: Buy a used car, spend more time maintaining it, but have more cash flow because you bought it cash, vs. paying $600 / debt service. High risk, high yield in real estate is indeed the "rough areas." Any one that tells you different is likely not experienced or someone hoping one day their "equity" and "appreciation value" or financed properties will payoff...likely it won't because depreciation-based repairs will cut those margins drastically when trying to sell for a retail high value on the market. Hope this info helps. 

Originally posted by @Matt K. :

we talking about the same place? Has tenant in place at 550... and sold for 27k

https://www.redfin.com/FL/Jacksonville/1045-Almeda-St-32209/home/108820872

 It seems it is indeed the same place. So its even worse than I though

Well we at least found the missing profit lol

@Jay Hinrichs @Milos N. - I may be wrong on this, but taking the above numbers, my understanding of the way MI structures (based on what I read on another post) what they call "TK" is: 

33K MI wholesale/pre rehab purchase price

49.5K Investor purchase price

16.5 Rehab starts after Investor closes on property 6-12 week timeframe, and rehab is paid for by Investor in additional draws. 

So MI's profit is 16.5k

Investor is in for total of: 66k

Or am I missing something?  

Originally posted by @Paul Santos :

@Jay Hinrichs @Milos N. - I may be wrong on this, but taking the above numbers, my understanding of the way MI structures (based on what I read on another post) what they call "TK" is: 

33K MI wholesale/pre rehab purchase price

49.5K Investor purchase price

16.5 Rehab starts after Investor closes on property 6-12 week timeframe, and rehab is paid for by Investor in additional draws. 

So MI's profit is 16.5k

Investor is in for total of: 66k

Or am I missing something?  

 Yes your missing something... that 33k home is being bought from the local wholesalers for 5 to 10k  maybe 12k max.. so someone is also making the delta between 33k and the actual purchase price of the home.. I know most of the wholesalers in that market I know what this stuff is routinely bought and sold for.. so that's my knowledge based on first hand.. and funding some of it for wholesalers.. have not been involved with anything going to MI or oceanpointe  but the ones I have done were kept by locals who work those low value areas.

Be very careful to deal with them. Numbers look good but the reality will destroy your dream. Their theory sounds good, that is why so many people were appealed. I bet many of them regretted now just like me. I am not sure if it is a scam, they might be too greedy to control the crazily expanding business. There are so many hassles, what's the point to buy a property from a turnkey company like Morris Invest. I have bought two houses since March, no a penny comes in and I need to pay a lot of renovation bills even for a rent-ready house. Be careful.

Stay out of war zones and stay away from 2/1 as well.