All Forum Posts by: Pete Barrow

Just an aside. If the legal system picks Clayton's bones clean, it will be interesting to see what the little lady does. The traditional thing would be for her to decamp and then make her own tearful podcast: How That Bad Man Made Me Do Those Bad Things.  

I'm waiting for Elizabeth Holmes' book of this title, by the way. 

I feel a little cruel just writing this...until I stop to think how many marriages and families might have been destroyed by MI / OP. It can't be very nice to have to come home one day and say, "Hey honey, you know all that money we've been saving for thirty years? It's gone. What's for dinner?"

Well yeah, those are two separate issues. The Ponzi scheme issue is obvious and easy for people see and label: it's fraud, it's stealing, it's evil. 

The other issue is that low-grade rental stuff is extremely time, labor, and skill-intensive, and difficult to manage profitably, and all but impossible for an OOS noob investor. And it is being represented as guaranteed easy money by people like MI. If you ask me, that's fraud in an ethical sense, although I doubt it's prosecutable fraud in a legal sense. 

It shouldn't surprise anyone that people who are so comfortable with ethical and moral fraud, are comfortable getting into bed with other people whose game includes wire fraud and Ponzi schemes.   

C and D class OOS investment is a recipe for disaster for a rookie investor. Those investors need to be discouraged from buying that stuff because most of them will be selling it a few years later at a big loss. That is the reality of OOS investment in ghetto properties, whatever the theoretical possibilities may be. What's not fair is that so many people are talking that stuff up on this forum and elsewhere, and people are losing their IRA money on it.

If you're feeling bad about "holding back", go back and read the top two trending discussions, Morris Invest and Horrible Situation. 

Your spouse and friends are very likely correct, you may well be crazy, and the market is very likely peaking.

As harsh as it is, this is the best advice. The house is very likely to be worth more now than it will be in a couple of years. 

You talk about not wanting to take a hit by selling: actually, you already took the hit when you bought a house for twice what it was worth. The saying is that you make money when you buy, not when you sell. The same is true for losing money. 

And in the future, don't believe anything anyone tells you about REI without verifying it yourself. Like the man said, "A more wretched hive of scum and villainy you will not find."

Experienced people are on BP every day warning about the danger of buying C and D class OOS. The reaction is always the same: You're killing our dreamzzz! You can't think outside the box! You're stodgy and, like, OLD!

But even without advice from BP, I think Clayton himself should have been warning enough. First of all, I know we shouldn't judge by looks, but we do, and Clayton looks to me like a guy who got fired from the used-car lot for being too sneaky and dishonest. 

Second, those podcasts! I watched one way back when, and I got a few minutes in, where he read a letter from a viewer, something like: Dear Clayton, Betty Sue and I love your podcasts, but we have a question. What if we buy a house from you, and the dryer breaks? His answer was, and I paraphrase, to the best of my memory: Jeez, you don't even have a house yet, and you're worried about the dryer? Relax, willya, I'm trying to help you here.

At that point I spit out my coffee and turned it off. I'm not sure how anyone could keep watching after that. 

I think it would be better for investors if every book, podcast and course about real estate were just replaced with the words : CAVEAT EMPTOR.  

It sounds like a terrible house for anyone's first flip, unless you can knock the price down by maybe half. Lead, mold, and asbestos can kill you, but dealing with city government over those issues can be a fate worse than death. Not an experience a beginner needs to have. 

That's leaving aside the fact that a lot of smart people think the market is making a top, and starting an expensive flip now might not be a great idea.   

I suggest you visit the city and get to know the areas and people, before you spend a nickel. 

Instead of watching Clayton's podcasts, why don't you Google a few terms like "Clayton Morris Scandal" or "Clayton Morris Ripoff" and see if any interesting educational material pops up?