Morris Invest & Oceanpointe management company

Morris Invest & Oceanpointe management company

Rental Property Investor · boston, MA · Member since 2017 · 202 posts · 222 votes

Inspired by @Tyler Jahnke and others on BP I've decided to chronicle my experience regarding the property i've purchased with MI & OP management company from now for as long as i own it. The purpose is to hold these companies publicly responsible and allow future investors to be aware of what they are getting into. If you want to know the complete frustrating experience i suggest you read Morris Invest Case Study 2.0 or 3.0 as i had very similar experience therefore see no need to repeat it here. I will only summarize what happened thus far.

10/26/2017: I told Larry, a contact representative from Morris Invest, that i've decided to purchase a property. (Please note that this is where Morris Invest stop, but i didn't know it at the time.)

11/8/ 2017: i received paperwork to close on the property with Oceanpointe Holding LLC. I immediately went through all the documents and sent it back the same day, along with same day ACH payment. I called them, every single business day, to make sure they've received paperwork and payment.

11/14/2017: Finally got someone on the phone who told me that they did receive payment. However, the person i replied email to could not receive email. (I still don't understand this part.) So i immediately resent the paperwork to him as requested. He emailed me within the hour that he received it and everything was all set. So i guess this is officially my closing date now, even though all documents were dated Nov 8.

11/16/2017: I received welcome package. I called them repeatedly to talk about their management, each time leaving my number for a call back. (Please note that up to date i have never received a call back from anyone at Oceanpointe ever)

12/8/2017: I got to talk to someone regarding management. She answered my questions well enough. i sent the management documents.

12/20/2017: My direct deposit info changed so i sent them the updated info and called to see if they received it. Plus they never sent me things i asked for such as sample lease form. Up to date i've never gotten anyone.

1/2/2018: I received update on my rehab saying the important things have been done and ready for drywall & paint. I called today to ask them to hold off on that until I have a third party inspect the plumbing & electrical. No call back. I'm afraid next time someone contact me the drywall will already be up and I will not be able to inspect it.

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Indianapolis, IN · Member since 2013 · 549 posts · 310 votes
8y

Hey @Son D....happy to drive by your place and take photos, or whatever is needed to get you closer to the finish line with Morris. Hell, chances are that my company sold Morris your house. I can provide "before rehab" pictures if that is the case. Just let me know where I can help.

Same goes with ANY Morris client looking for quick answers!

See this reply in the discussion

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  • Rental Property Investor · boston, MA · Member since 2017 · 202 posts · 222 votes
    8y

    @Michael Gansberg thank you for your empathy and advice. Right now i'm still waiting to hear back from my new PM before I decide what to do.

    Many of the legitimate PM in Indy have recently received an influx of OP clients. This understandably causes a delay in response time. Information is trickling in to reveal the extent of the problem. It will cost a lot of time and money for those who want to try to turn the property around. Some PM are beginning to realize that they may have taken on more than what they were prepared to handle. Tough times continue for MI/OP investors.

  • Las Vegas, NV · Member since 2017 · 54 posts · 9 votes
    8y

    I am flying out there from Vegas this weekend 7-6 to 9 to learn and understand the market, meeting agents and people, looking into PM's and all. Having been saved by you guys not to invest with Morris, and I was close to it, I would like to offer my help to you taking pictures or being boots on the ground for this short period of time there. Let me know if there is anything I can do.

    Also, having learned all this, what could one do to avoid these downfalls and issues? Certainly all could be avoided by finding a property myself with an agent, understand the area and where to buy or not too, rehab the place independently ( this is I see a big issue either way due to un-trusty contractors and industry in general), getting legally covered to be able to get inspections done before tenant placement, find my own vetted PM, test their communication and response time.

    What else could be done to avoid or better what went wrong? I see it all mainly failed with the properties not being worth what investors paid for, not having seen or inspected it, having paid all upfront including Rehab cost (can this be avoided with escrow or not having to pay all upfront cash). Rehabs then not being done in time or at all, time passing with no communication, increasing holding costs and driving one nuts not knowing and hearing back. 

    Once tenants go in, unaware of exact time of tenant placement, no lease documents provided, no rent payments received. From there it seems to be all about communication and not being avoided by the PM. I marked all PM's mentioned here not to use them. 

    I would like to not only read what went wrong, but during every stage of mistakes, how could one avoid or do better? 

    @Jay Hinrichs you are licensed or live in Summerlin?

    Are you now against Turn Key, or this business model of around 50K properties at $700 to $800 rent?

    Could other Turn Key do better or is it all just not possible in this market and area. Looking into High Return Real Estate by Jeff Schechter in Indy. I see same business model, but they seem to market and sell their own homes and still have their hands in and on the deal. Not much difference of overall business model, just probably did not get greedy like MorrisInvest did and just pushed them off to a 3rd party like OP they did not have control over. Such a shame MI truly fEd this up and still just shoots new videos.

    Let me know about looking up your place there. All about Indy this weekend for me.  And thanks @Son D. for your detailed experience. I would have gone nuts with this slow timeline. Any updates? 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Rijm D. I split my time between my home in lake Oswego and Summerlin but I am a NV resident.

    that said.. I am not at all against turn key.. what I do warn those is that 30 to 50k homes or low end duplexs  

    are pretty much only appropriate for locals that self manage.. out of state folks will find this to be a challenge.

    the companies that sell them can be fine they can deliver a product but your not renting to them your renting to those

    that live in those neighborhoods and that is where your challenge comes from.

    you will be amazed at how much better the areas are when you look at 80 to 120k SFRs and do not buy OLD duplexs in 

    the inner city of INdy…  the risk reward factor just goes up a lot.. Especially if your a cash buyer.. as an alternative if you just want to put 50k to work.. buy a very nice performing note on a 75k asset.. the return will be the same and usually a lot better since your income is consistent. your equity position is better your only risking 50k on a 75k property not putting out 100% which is full value .. no cushion .. 

    so that's one thing.. but really its just buying a quality asset in a quality area.. and the cheapest homes in a given MSA which basically 30 to 50k in Indy that are rent ready that's what those are.. your as stated going to find the bottom of the barrel tenants.. bottom of the barrel tenants give you inconsistent returns and can trash your houses and they move a lot turn over kills landlords just kills them .. 

  • Lexington, KY · Member since 2016 · 4 posts · 1 vote
    8y

    I’m a newbie that started down this path because I heard Clayton Morris guest on another podcast. I discovered BiggerPockets and Get Rich Education with Keith Weinhold from Clayton’s podcast. I’m at a Than Merrill Fortune Builders conference this weekend in Fort Wayne, IN. I credit Clayton for getting me started down this path. 

    That being said, I haven’t purchased a turnkey property from Morris Invest but have been considering it. It’s my understanding that the end product is a rehabbed house with the option to have it managed, which could mean that it’s already rented out by the time you take ownership. 

    It’s unclear to me how many of the problems people have been writing about are because of incorrect expectations and a poorly operated Property Management company. What do you guys think the final verdict is? Avoid buying from Morris Invest or buy but take the management elsewhere?

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y
    Originally posted by @Larry Walters:

    I’m a newbie that started down this path because I heard Clayton Morris guest on another podcast. I discovered BiggerPockets and Get Rich Education with Keith Weinhold from Clayton’s podcast. I’m at a Than Merrill Fortune Builders conference this weekend in Fort Wayne, IN. I credit Clayton for getting me started down this path. 

    That being said, I haven’t purchased a turnkey property from Morris Invest but have been considering it. It’s my understanding that the end product is a rehabbed house with the option to have it managed, which could mean that it’s already rented out by the time you take ownership. 

    It’s unclear to me how many of the problems people have been writing about are because of incorrect expectations and a poorly operated Property Management company. What do you guys think the final verdict is? Avoid buying from Morris Invest or buy but take the management elsewhere?

    I don't know how to put this.. but please read the threads on Bp there are people who lost their entire life savings how anyone would consider doing business with these folks just blows me away it really does.  there are hundreds of other folks that can do this for you. Morris is not a turn key provider he is simply a marketing person.. and a great one at that.. but he has no clue about real estate that I can absolutely tell you.. to infer that D class is better than A and B it takes someone who simply does not know better to make a statement like that.. its a total rookie who saw a niche to use his star power to make a ton of dough on the back of a lot of really innocent victims. 

  • Lexington, KY · Member since 2016 · 4 posts · 1 vote
    8y

    Thanks, Jay! I’ll look elsewhere for a turnkey rental provider.

  • Rental Property Investor · boston, MA · Member since 2017 · 202 posts · 222 votes
    8y

    I've been avoiding BP forum, specifically this thread, for the past few months fearing that I would something I shouldn't. However, I do feel that I should pop in once in a while to give a short update on what's going with this property since I already committed from the beginning.

    The one good thing in my situation is that I have a paying tenant. They seem like good people. Rent is $630, not $700 like MI advertised and OP pretended. 

    April: Tenant paid to OP. OP emailed me an invoice. To date no payment.

    May: Tenant paid to Blue Sky (I signed up with IPM). I had to retrieve proof of payment from tenant and sent it to BS. Finally got it back in July.

    June: Tenant paid to IPM. Minus all expenses, I still owed IPM money.

    July: Tenant paid to IPM. Minus expenses. Net $60 into my account. Yay?!?

  • Member since 2018 · 2 posts · 0 votes
    8y

    Hello, I closed on a property on 3/21/18, I received one rent payment for May for $700.00 and nothing since. Hired a new Management company outside of MI, they found out a lady by the name of  Marsha Davis came by on a white Malibu and picked up the rent for August, which I assume probably for June and July too from the tenant.  The tenant sent a receipt to my management company of that payment that said cash to Blue Sky, which closed on June 1st.  I called and left this Marsha a message, of course I don't expect her to respond or pay me.  Does any one have any suggestion on how to get my rent money legally?  I don't recommend buying from Morris Invest!

  • Wendy PattonBusiness Member
    Real Estate Consultant · Clarkston, MI · Member since 2009 · 864 posts · 350 votes
    8y

    This kind of story really concerns me as I am from this area and ALWAYS wonder how turn key flippers are justifying their deals now - (and this is coming from someone who sold over 200 turn key deals but back in 2009-2013 when the numbers made sense)  - anyway YES there are deals in MI however it is hard to find that many in a month and to rehab them all - sooooooo I do not know the details nor have I looked at the details however i am volunteering to "check out your investment" in the metro Detroit area if you ever need it - meaning BEFORE You buy it hopefully - otherwise if you need help you find a good property manager let me know (no I do not have a management company)   - 

    Michigan Real Estate Investors540 Reviews
  • Rental Property Investor · boston, MA · Member since 2017 · 202 posts · 222 votes
    7y

    So an update on my property. My tenant has been paying in full every month without fail. I've had to pay for repairs and management fees here and there but it's still better than having vacancy on a uninhabitable home. I still feel like I lucked out with having them as tenants from the beginning. They also renewed the lease so I have them for another year. My property remain stable for now.

  • Rental Property Investor · boston, MA · Member since 2017 · 202 posts · 222 votes
    7y

    "An Ex-Fox News Host Pitched ‘Financial Freedom.’ His Clients Want Their Money Back."https://www.nytimes.com/2019/03/25/sports/fox-news-clayton-morris-indianapolis.html

  • Rental Property Investor · boston, MA · Member since 2017 · 202 posts · 222 votes
    7y

    https://www.indystar.com/story/news/investigations/2019/03/26/clayton-morris-and-bert-whalen-partners-finger-pointing/3269815002/

  • Rental Property Investor · boston, MA · Member since 2017 · 202 posts · 222 votes
    7y
  • Rental Property Investor · boston, MA · Member since 2017 · 202 posts · 222 votes
    7y

    Thought I'd post an update since it's been 6 months. The situation remains the same. I still have the same tenant who pays monthly rent like clockwork. MY Management company has been excellent with responding to tenant requests. No really big expense so far. Property remains stabilized.

  • Rental Property Investor · boston, MA · Member since 2017 · 202 posts · 222 votes
    6y

    Seems it's time for another update. Tenant paid on time and in full until lease expired at the end of February. This would be my first vacancy since owning this property. I'm weighing my options. Meanwhile, I found the list of rehab items that MI/OP said they were going to do post-purchase but never did. Looking back now i realize how foolish i was to have believed these prices.

    Roof repairs 800.00

    Electrical upgrades 675.00

    Plumbing upgrades 700.00

    Siding repairs 675.00

    Foundation repairs 875.00

    Window/ trim upgrades 1075.00

    Water heater 650.00

    Furnace 1500.00

    Gutter/ downspouts 650.00

    Fascia, soffit repairs 400.00

    Total 8000.00

  • Rental Property Investor · boston, MA · Member since 2017 · 202 posts · 222 votes
    6y

    After the tenant left, my property manager quoted me over 11k+ to get it rent ready again. This was more than what I had received in cashflow from the past tenant. I would try to not go back in time to restart my quest to breakeven. I decided to find a way sell. Man talk about buyers lowballing you. They were giving me impossibly low offers. However, I was able to hold out until I got the price I wanted. The sale price was less than what I had paid for purchase + "rehab". However, considering the cashflow I had received plus the overly generous prepaid city tax account that the previous sellers left me, I was about breakeven. This was what I was aiming for. I found out later that I should have aimed higher but that's another story.

    This is the end of my relationship with a Morris Invest / Oceanpointe property. I like to thank @Todd Burton and the team at Evergrow for helping me manage the property these past couple of years. I'd recommend them to anybody asking for a PM in Indy and would work with them again if I have the chance.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Son D.:

    After the tenant left, my property manager quoted me over 11k+ to get it rent ready again. This was more than what I had received in cashflow from the past tenant. I would try to not go back in time to restart my quest to breakeven. I decided to find a way sell. Man talk about buyers lowballing you. They were giving me impossibly low offers. However, I was able to hold out until I got the price I wanted. The sale price was less than what I had paid for purchase + "rehab". However, considering the cashflow I had received plus the overly generous prepaid city tax account that the previous sellers left me, I was about breakeven. This was what I was aiming for. I found out later that I should have aimed higher but that's another story.

    This is the end of my relationship with a Morris Invest / Oceanpointe property. I like to thank @Todd Burton and the team at Evergrow for helping me manage the property these past couple of years. I'd recommend them to anybody asking for a PM in Indy and would work with them again if I have the chance.

    Anywhere close to a break even is a huge win.. even if you did not get caught up in Morris issues..  rentals to make money have to be held a decade or more.. or be in an area that ACTUALLY appreciates.. I am sure you had all the local wholesalers low balling you  I get it everyday and twice on Sunday.

  • San Diego, CA · Member since 2016 · 7 posts · 8 votes
    6y

    So this is interesting to me and after 4 years I am suspecting there may be some truth to it. So far, I have not made any money between rehabs, repairs and tenant turnover. In fact, I'm in the red. I should mention that I only have just bought my third property.

    However - if what Jay claims is true about needing 10+ years before you can hope to make money with a rental - that does not make me feel too warm and fuzzy about doing all this deal analysis and worksheet number crunching. It seems that any analysis you do is going to be so crude and not based in reality that all you can hope for is to eke out some minor head start in your buy-and-hold game. It appears to me that only if you average the numbers across dozens and dozens of rentals do they start to reflect reality. This makes the start-up phase when you still just own a few rentals rather risky.



    Originally posted by @Jay Hinrichs:
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Stephan Meister:

    So this is interesting to me and after 4 years I am suspecting there may be some truth to it. So far, I have not made any money between rehabs, repairs and tenant turnover. In fact, I'm in the red. I should mention that I only have just bought my third property.

    However - if what Jay claims is true about needing 10+ years before you can hope to make money with a rental - that does not make me feel too warm and fuzzy about doing all this deal analysis and worksheet number crunching. It seems that any analysis you do is going to be so crude and not based in reality that all you can hope for is to eke out some minor head start in your buy-and-hold game. It appears to me that only if you average the numbers across dozens and dozens of rentals do they start to reflect reality. This makes the start-up phase when you still just own a few rentals rather risky.



    Originally posted by @Jay Hinrichs:

    Ya know in the old days and really CA based comment.. it was just fine to break even or lose a little.. and its a long game your tenant pays for  your house.. if you have no debt you  are making money.. if you have debt the tenant is paying it and after 10 or 20 years you start to have some real equity..  If the idea is your going to make 100 or 200 month on a rental or two.. then yes your going to have ups and downs and if its just short term investing.. then I think your correct in your assessment.. real estate buy and HOLD is just that BUY and THEN HOLD .

    to make money I think folks scale up or get into MF were things are sold at True cap rates and you have an easier time determining rates of returns and real returns.

  • Specialist · OverTheRainbow · Member since 2020 · 607 posts · 909 votes
    6y
    Originally posted by @Stephan Meister:

    So this is interesting to me and after 4 years I am suspecting there may be some truth to it. So far, I have not made any money between rehabs, repairs and tenant turnover. In fact, I'm in the red. I should mention that I only have just bought my third property.

    However - if what Jay claims is true about needing 10+ years before you can hope to make money with a rental - that does not make me feel too warm and fuzzy about doing all this deal analysis and worksheet number crunching. It seems that any analysis you do is going to be so crude and not based in reality that all you can hope for is to eke out some minor head start in your buy-and-hold game. It appears to me that only if you average the numbers across dozens and dozens of rentals do they start to reflect reality. This makes the start-up phase when you still just own a few rentals rather risky.

    There are other, easier ways to make a great deal of money in real estate much sooner than 10 years. Rentals are the second hardest way to make money, (flipping is the hardest, riskiest and most taxed), commercial isn't a good choice right at the moment, but there are still a couple of other good routes. Don't give up.

     

  • Rental Property Investor · boston, MA · Member since 2017 · 202 posts · 222 votes
    6y

    Thanks for the words of encouragement Jay. 

    As for the other topic i am not anywhere near the 10 year mark, though i suspect it is true. I do intend to find out. Right now I'm in the process of pulling out all the cash i put in my 1st (possibly the 2nd) non MI/OP rental. After this i just plan to hold it for long term. My cash flow would be small but i have nothing in it so i don't really care. I have a free asset with a tenant building my equity.

  • Mike D'ArrigoPro Member
    Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
    6y

    @Son D. I know that was a terrible experience for you but you came out much better than most MI clients. I hope it didn't turn you off to real estate.

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