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Turnkey Nightmare with Morris Invest - Indianapolis
Hi there fellow investors!
We've done our first turnkey purchase with Morris Invest in Indianapolis about 6 month ago. A house in a C neighborhood near downtown, for about 50k. For this price the house was supposed to be renovated and ready to rend. We had a hard time receiving photos of the process, and communication wasn't that good. Morris Invest gave the management part to Ocean Point, and things just got worse from there on, everyone is always too busy to come to the line, and calls are never returned. We got an email saying the property was still empty and they were having a hard time putting a tenant in place.
So we've decide to come by Indianapolis and find out what was going on... as most of you can already imagine, things were much worse than we expected. When we drove by the house we noticed right away that it was the only house in the neighborhood that didn't have any work done in a looooooong time. It looked empty from the out side, so we try to get a better look inside, and that's when we noticed there is people living in the house, by what looks like they are probably squatting! I talked to a lady in her twenties, who said that they bought that house, then said they were actually leasing, and already living there for 8 months, then changed her story to "we are living here for 4 months". I was standing by her door and could feel the strong smell of weed coming from the house.
We called Ocean Point, but as usual everyone was too busy to come to the phone. I was outraged and wanted to visit their office in person, only to find out the address they have listed on their website its only for mailing, and they don't actually have an office for the public.
It's safe to say that we didn't do our due diligence enough with this one, and looking back we would've done things much different.
It's my first time going through something like this, and I'm not sure how to best handle this situation, what would be the best action in this case? If anyone has gone to something similar any tips or advises would be greatly appreciated.
Thanks in advance,
Maria Dantas
@Maria Dantas
Here's a couple physical addresses for Oceanpointe:
8604 Allisonville Rd, Suite 256, Indianapolis, IN
1775 N Sherman Dr. Suite C, Indianapolis, IN (I believe this is their management office)
I have just spent some time reading over this thread and I want to offer my condolences to all those that have been deceived. It is tough on the coasts for cash flow and I understand the enticement of the midwest, but you got to have boots on the ground there if you want to be truly successful. Even if you find a local handyman on craigslist, pay him to take pictures and inspect things IF NOTHING ELSE. Or at the Very minimum I should say.
I understand the TurnKey concept but I also think that you are setting yourself up for potential failure by having 'all your eggs in one turnkey providers' basket. Investors can find a solid realtor who usually has contractor, management leads, etc. in the local market. I have learned that if you find a reputable realtor in the market you are interested in, that will go a long way towards building your team, and provide you with a means of checks and balances. There were so many red flags with these guys, but of course that is looking in retrospect, with the high pressure sales tactics employed and the lucrative numbers, it is easy to to get caught up.
Think about this, if you have a independent and vetted management company ready to take over your management, they would be extremely vested in receiving it in rent ready condition, as long as they did not have a financial incentive to do the exact opposite in the first place. Assemble a team in the market where you want to invest, and then find the properties. By the time you have talked to your Realtor, Management Co, inspector, etc. you will know what you are getting yourself into. Best of Luck to Everyone!
Wasn't Morris Invest on a podcast a while back? Like a few years ago? Crazy how many people are getting duped.
@David Riska Suddenly Clayton Morris wants to separate himself from OP. He has started a new company called Blue Skies PM. It is registered in Indiana with a NJ address. When one OP client inquired to Morris regarding who was the Indiana licensed broker he could not answer. He provided the name of his out of state client liason. When searching for a licensed broker affiliated with Blue Skies, there are none.
I suspect, nothing but having dealt with Morris/OP issues for a year now, that Blue Skies is just a re-brand of OP. Same cast of characters. I believe the demands for repurchase to Morris have become excessive and he may not be able much longer to do so. Watch out people in Jacksonville..your money is probably being used to pay off Indy owners.
For now, Blue Skies appears to be the path to buying time. I wonder how far we are from complete collapse?
@Maria Dantas I would encourage you to continue this thread and update often to chronicle your experience with this property. I would encourage everyone who has been duped by these companies to do the same thing. I have done so with mine since the beginning rehab stages and it's been helping one way or another. Keep them publicly responsible. These people claim they don't care about forum posts but they do! They read our posts and it does have an effect on their behaviors, even if only a little.
There is nothing embarrassing about a newbie being fooled by a more experienced person. Everyone says to do your due diligence but when you're brand spanking new, you don't know everything you're supposed to be looking at. Your actions were based on the trust of a t.v. personality over time, but nowadays that is not as crazy as it sounds. Look at us here on BP looking for advice from total strangers. There are a number of people on here that I absolutely trust and I've never met them in my entire life.
Even to this day, aside from BP, if you look up Morris Invest, you see nothing but good things. If you didn't know what bp was you may disregard it. You look at MI videos on youtube and all you see are his videos and those supporting him. It's hard for me to find MY own videos of a home inspection unless I type in specific keywords other than just Morris Invest. From time to time i see MI ads on fb and tons of people still say they're getting funds to invest with him. I message them individually with friendly buyer beware message but i know most of them don't open it. So I guess I understand why people are still continuing to invest with MI.
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Originally posted by @Paul Choi:
if so, I've watched some of their youtube videos and seem to give good nuggets of info about REI. crazy to believe that someone who is somewhat well known be involved in such scams.
one and the same and is using that notoriety to create this huge swath of business that well just read the threads.. as someone else mentioned its just fantasy the way he describes these areas.. and only those who just don't know what they don't know and rely on his internet and TV celebrity to to think investing in this model was safe and sound
I started with turnkey but then found brokers to work with.
Always buy with inspector and appraisal.
And stay above 900 a month in rents.
This is why I do not understand the appeal of turnkey providers. Just find a broker who will fight for your best interest and who has no financial interest in the property. The broker has no financial incentive to sell you an over priced bad property like these turnkey providers do and it's a referral business most brokers want you to make money and refer them to your friends after a successful deal. Then find the best property management company and have them manage it. There are usually only a few top PM companies in each city so not that hard to find a good honest one.
Look like you are not the only one who got ripped off. I keep seeing post about this particular turnkey provider from time to time.
@Ritch Bonisa and @Ross Denman are spot on in their advice. In addition to those suggestions, reach out to a local TV station. Every market has a news station that handles consumer reports stories. You and the other BP'ers that have had dealt with this company can be featured. While you are doing that, follow @Jay Hinrichs advice and contact the AGs office. I think you need 4 people for a class action. Band together and put this person out of business so no one else will get cheated. I am sorry this happened to you. Hope this company is stopped so it does not happen again.
It's shocking that people continue to use this company. Most people look up reviews when they go out to eat or buy some new toy on Amazon, yet don't simply search for reviews when using a new company to BUY A RENTAL PROPERTY!
I mean, in the top 5 google results of "morris invest," there are a ton of case studies on exactly why you should not use them.
It's sad to see so many people getting duped by these guys, but what do people expect when doing zero research on a purchase of tens of thousands of dollars?
OOS turnkey under 50k!!! Good luck.
I had a phone call with Morris invest early in my turnkey rental property purchase investigation. I recall them mentioning they focus on low grade neighborhoods....something I am not personally interested in.
I have had great experiences with Smartland in the Cleveland market and hope to do more with them and also Holton-Wise soon.
I have done a great deal of research and both firms are very reputable.
James is 100% right, always get a 3rd party inspection contingency...and evaluate the inspection results before purchasing.
Same sad story. Same sad outcome. People losing hard earned money. They are giving INDIANAPOLIS a bad name unfortunately.
We have taken over more than a dozen properties previously managed by them and it’s really insane and down right fraudulent what they are doing. Sometimes when owners come over they will tell us that rent is $700 and they have actually been receiving $630 ($700-fees), but when we go out to meet the current tenant they say, “No it’s actually $450,” and here is a signed lease and bank records proving its $450. Plus the signatures on the two leases won’t match! I’m assuming they make so much money selling trash that they can afford to float the extra rent payments to the owners. Additionally, I have personally had to “re-rehab” some of their properties because the work was so bad. I can’t believe they still operate here. Also, our local news channel did a story on them. I think it was because they moved a single mother in a house with no furnace during winter. You can’t make this stuff up.
Jay Hinrichs you’ll get a kick out of this. Ocean is now in the new construction game. I was looking at another house and saw a new build where only charity would build. Thought it didn’t make sense and sure enough, guess who was on title. Same cast of characters. Pretty soon they will be offering “new construction rentals”. The place only had 4 windows. At least there won’t be as many to replace when they get shot up.
Morris Invest uses a ton of YouTube. Why don’t you do a video of the property and call it a “Morris Invest Review” and add tags that include Morris invest.
If you need a video editor to help you send me a PM and I can help with the edit.
Help save other investors from the same issues and get their attention at the same time.
I am sorry to hear this story...again.
Lot's of good advice has been offered here. You've been praised for taking control by getting on the airplane. Guys, it may by extraordinarily keen sense of the obvious, but isn't a situation requiring you to get on an airplane for one house really nuts?!
Here's the larger issue. If, as it has been mentioned, the ultimate responsibility is yours, which it is, and if same requires you to get on an airplane, does this not definitively tell you something about the viability of TK?
What am I missing? I got on an airplane the other week to fly to Indy to complete DD. But this was 150 units. A plane ticket makes sense. But a $50,000 house?!
Let us ponder...
Not to derail this thread to much but not all turnkey is bad. I found it a good way to get started. Instead of paying some guru 20k I used that money to buy a rental. Maybe I overpaid slightly (I think I did) but it still cash flows, and it’s been a consistent rental so far.
Just do your homework
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Originally posted by @Ben Leybovich:
I am sorry to hear this story...again.
Lot's of good advice has been offered here. You've been praised for taking control by getting on the airplane. Guys, it may by extraordinarily keen sense of the obvious, but isn't a situation requiring you to get on an airplane for one house really nuts?!
Here's the larger issue. If, as it has been mentioned, the ultimate responsibility is yours, which it is, and if same requires you to get on an airplane, does this not definitively tell you something about the viability of TK?
What am I missing? I got on an airplane the other week to fly to Indy to complete DD. But this was 150 units. A plane ticket makes sense. But a $50,000 house?!
Let us ponder...
Ben your late to the Morris debacle.. this Is far more in depth than buying a 50k.. house.. Morris was a Fox news and on air TV personality with a monster online presence and following.. I can see how this happened with basically good trusting people.. the guy had way to big of a presence and then of course a BP pod cast and other pod casts and there you go.. folks let their guard down.
the idea that 50k turn key in rotten neighborhoods is separate they were told these were good neighborhoods.. common sense does come into play.. but again.. I can see how this happened and Morris exploited it to the hilt.
Chuks Erinne
Interesting points you have made there
Caleb, thanks for the reply. Yes, I had a local real-estate friend in Indy actually confirm there was a tenant, although I never saw and actual lease from OP.
Some of the name brand fellow Indianapolis investors here in town offer solid advice.
What I have offered in the past, and will offer to ANY Morris Invest/Oceanpointe client, is to drive by your home free of charge and try to get you pictures and a good idea on where your property stands.
No investor should have this spur of a taste in their mouth when it comes to our wonderful city!
David Riska you’ll get a lease but it could be fake. On my desk right now I have one from an old client from OP signed and everything and one from the current tenant signed and everything, but at different rates. So not only does the out of state buyer get a horrible product he/she gets $200 less in cash flow since the tenants lease is clearly the valid one. It can’t be more clearly fraud then that.
If someone is serious about a case please reach out and I’ll provide what proof I have. We’ve been through this more than a dozen times.
Also, for others thinking of buying and want a second opinion just reach out to a local property management company. There are a few active here in BP forums.
Originally posted by @Jay Hinrichs:
Wow this is quite a story. Anyone else want to hear more? Maybe a BP podcast about this topic. I had no idea a show was pulled down.
Originally posted by @Josh C.:
David Riska you’ll get a lease but it could be fake. On my desk right now I have one from an old client from OP signed and everything and one from the current tenant signed and everything, but at different rates. So not only does the out of state buyer get a horrible product he/she gets $200 less in cash flow since the tenants lease is clearly the valid one. It can’t be more clearly fraud then that.
If someone is serious about a case please reach out and I’ll provide what proof I have. We’ve been through this more than a dozen times.
Also, for others thinking of buying and want a second opinion just reach out to a local property management company. There are a few active here in BP forums.
There are multiple layers of criminal activity. It appears that much of this is a variation of a Ponzi scheme. They are paying dividends/returns on their investment out of the profits of the home sales. Understand... this is not a turn-key company. When you purchase a TK, it's a finished product. They are holding so much cash because the buyers are paying both the product and the rehab cost at closing, but no work is being done. Many of the homes that they are selling were purchased for less than $15k. They are banking $30k+ on every sale. If they are selling 50 units monthly (like they claim) that's $1.5M/month in money for rehabs that aren't getting done. They have plenty of money to pacify their buyers with rental income... even if it's non-existent.
Everything we are seeing that appears to be criminal or civil is actually just part of creating, controlling, and covering up the giant pyramid scheme that they are running.