Wow, this post has really generated a lot of feed back! Thanks all for the constructive comments!
I am a first time investor, with my fiancé, we thought since this is an affordable property, this could be an entry into real estate investing, and boy what a lesson we learned! So this is at least a good experience. Expensive, but important lesson going forward.
So here’s the update:
We contacted Ocean Point the same day we discovered the house in that condition. I, as usual, could not get in contact with the person in charge, or any body that could help me. Go figures, I thought. Next day after my initial post here, we got a call back from Ocean Point. On that call, we talk to them very gently, with a purpose, and calmly explained that we haven’t had the tenant in 6 month. A surprising comment that came back was we had tenants in our property since the middle of March, and that we should have money coming into our account very soon. (It didn’t, yet, btw). Of course I complained I had never received a lease, or had been notified of property being rented. And the reported amount of rent was much lower than what was presented in the pro forma. OP’s argument was the property wasn’t renting so they had to lower the rent (but of course, the house hadn’t been rehabbed properly! Back to this later). We waited for them to finish talking to inform them that we were actually in town and had drove by the property to find tenants living there reported for more than 4 months, and in very questionable conditions. OP said they had no information about such a thing and that they would check and let us know…which they didn’t get back to me.
So the facts are, 1. they didn’t notify the owner for the supposed “lease” and the new tenants, 2. lowered the rent without notice, 3. the house looks abandoned, 4. and the story doesn’t check out with the tenants who supposed live there for more than 4 months. It’s been exactly month and a half now and no rent has come in. It’s another thing we’ll have to wait and see. Looking at the condition that the house is in, no wonder one would had to drop the rent. It looks like an abandoned house, with paints falling off everywhere, broken glass window patched up with some wooden board, unpaired and crudely nailed in railings, etc. The pro forma picture (which is the before photo) looks much, much better than the current “rehabbed” one! And for those who maybe wondering why I didn’t ask for the before and after pictures, of course we had asked. But there were supposedly waiting list for the pictures to be taken, and most likely you wouldn’t get those before and after photos. So MI asks you to just trust them, and only get very low resolution photos of what seemed like a 80% rehabbed (interior only) pictures. Now I know why.
We contacted Clayton about their extreme negligence with rehab not being done in the property, and all the problems with OP. The response we got next day (not Clayton) was that they would like to move us to Blue Sky, and get our property back on track. They would assess a crew to complete whatever it's left of the rehab work. Ending the email with: "after that get the property market, tenanted and cash flowing”. No explanations, no apologies, just the same pitch from 6 month ago. While our cash it's been invested, taxes and insurance are being payed, and not a single check from rent has been received, due mainly to rehab work not being done and negligence by the property management which he vetted as “turnkey.” This, being
We understand now that this is not a turn-key company. Proper turnkey is buying a finished product, ready to rent. But with Morris Invest, buyers are paying both the product and the rehab cost at closing, and no proper work is being done for the rehab and marketing it for rent.
Following a lot of the great advice we got here, our next step it's to figure out the best way to reduce losses, whatever that may be. This was an expensive lesson, but important one for us. While in Indianapolis we took our time to meet with few people that we got good reviews here on BP, that would help us solve this nightmare of situation, and also saw the market in person.
Just to clarify few things: When we purchased that property we weren't aware of BP, and didn't know about all the other nightmares stories that were already going on with Morris Invest. There is no shame for me in admitting we are beginners, and we are not very familiar with the ins and outs of Real Estate Investing. I trusted too much, and from a reputable source, I thought, from a public figure who would not want to damage his reputation, and “not over analyze and just take action,” as he says. As someone said in the post above, maybe we will see a headline “Former Fox News Host Indicted in Massive Real Estate Scam”?
Thanks you so much everyone for the kind words and advice (also thankful for the tough love). We will keep everyone posted!
