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Morris Invest Case Study
I want to apologize ahead of time for the long post but there are a lot of members asking questions about @Clayton Morris , with Morris Invest ( morrisinvest.com ) and not much information out there. I wanted to provide a case study on my time with the company and hopefully provide an unbiased “face based” documentation of my dealings with the organization.
In early July 2016 I heard about Clayton Morris, through his BiggerPockets Interview, which led me to the Morris Invest Podcast. I had bought a duplex a few months before and while it was a positive experience, traditional bank financing took forever so I decided to use cash for my next purchase. I spent a few weeks on vacation, listening to every Morris Invest podcast and over 30 of the BiggerPockets podcasts and decided I was going to buy another rental house.
When I got home from my vacation I looked on the Morris Invest website and couldn't find an available phone interview with Clayton for almost 3 months. I looked again a few days later and low and behold, a spot had opened up the next day. I immediately schedule the phone consult and impatiently waited.
I didn't end up talking to Clayton but I did get to talk to Dave (Client Specialist). He was courteous and intelligent and walked me through the process. I didn't get pressured to do anything and after our conversation I felt comfortable moving forward. Dave explained that he would send me details on a property and the first to claim the property would have the right to purchase.
The next day,I received a picture of a house in Indianapolis, with a sale price of $20k, projected renovations of $20k and projected rental price of $700 per month. I spent 24 hours trying to conduct my due diligence but by the time I was done, the property had already been sold to someone else. Two days later I received an email for a a $30k duplex with $30k projected rehab cost and projected rents of $1,300. I jumped on this deal and immediately go the house under contract.
The purchase only took a few days and by July 17, the house was mine. I was immediately handed over to Nicole, the Operations Manager, to start the rehab. She explained that 50% of the rehab was due up front, 25% after the crew was complete with half of the rehab, and the final 25% once it was complete. At first, email contact with Nicole happened very quickly, but as the renovations started it took longer and longer to receive a reply. I was able to get a scope of work (after a few requests), paid 50% of the rehab cost and everything seems to be going smoothly.
Aug 19 - I received my first set of pictures of the rehab and things look good. They crew built new kitchens, bathrooms, electrical, and replaced the flooring and new interior paint. I still haven't receive my deed or any official documentation that shows that I own the house other than a contract and purchase agreement. I also payed another 25% to continue the rehab.
Sep 24 - Received my second set of pictures showing the new plumbing and more of the interior. Everything looks good so I ask for some exterior photos and more information on the status of my deed and paperwork and am told the house should be ready in the next few days.
Sep 30 - have still not heard back from Nicole with the final pics of the rehab, status of the paperwork, and if we are ready for tenants.
So far, we have had a few hiccups and communication is getting slower and slower. We are over two months in and I do not know if the house is ready for tenants and I only have email contact information so I am in “wait mode”.
I will keep this forum up to date as I continue through the process so people can use it as a case study for Morris Invest. Please let me know if you have any questions.
After over 2 months & a significant amount of capital spent, do you have confirmation that you even actually, legally "own" the property?
@Ian - thank you for posting your case study. Anxious to hear the remaining part of the process.
Thank you for posting this! I literally just signed up for an appointment with them for next week. I'm not quite ready to buy yet, but I was interested. Your case study will be quite helpful!
Ian, I'd also ask for a live walkthrogh via facetime, skype, etc as these pictures can easily be repurposed time and time again (not saying that they are in this case, but these things do happen).
You know I'm just not a fan of these lower lever rentals that are under 70k. What makes real estate so great is the ability to leverage and no lender will want to touch these properties unless charge you a huge origination fee. In the end it will not be worth the effort.
I have always bought turnkeys above 85k that rent for at least 900. Why because that's me.
If someone wants a POS 50k property for 35-40k let me know. I want it gone.
Ian E. - You will find a lot of BP members have posted their experiences with Clayton Morris. (MorrisInvest).I made a trip to Indianapolis myself to meet their team and I couldn't have been more disappointed. The properties are in awful neighborhoods. I had the same experience in getting any piece of communication from them. My emails to Nicole were never returned and I had a tough time getting anyone return my calls. Needless to say, I didn't invest with them. I hope you did your due diligence before investing with them. Good Luck.
Yes I would want a HUD-1 from the title company before they got 1 penny for rehab. I hope it works out well for you. Did you deal with the title company at all? You should have signed the settlement documents.
Ned Carey and Matthew Schroeder I did sign the HUD-1 during closing and have all of my closing documents but the closing was done virtually so I am still waiting for the copies showing everything was filed with the county. Right now I am giving everyone the benefit of the doubt but will let everyone know as things move one way or the other.
IMO, I do not believe that you should have purchased a property without doing your DD first. Just because you missed out on the other one does not mean you should just jump on the next one that comes up. I have seen investors, including myself, make this mistake to many times because either their impatience or emotions gets the best of them. You should never rush into buying a property. If you miss out on one there will be another one that will come along. Caution should always be used when buying in a sellers market. My reasoning for this is because an investor can over pay for a property in a bad area, over pay for a rehab, or just buy the wrong property all together. I am not saying that this is what is going to happen to you but the risk is there.
Closing docs - You should have received, by now, an email with a link that should provide you with all signed documents from the title company, not from Morris. If you have not received this then you need to contact the title company directly and ask for them. There should be a Warranty Deed in these documents that would have been signed by the seller, not by you. This would be the document that conveys the property over to you. If you want to know for sure it has been done, which I believe it has, then send me a PM with the prop address and I will confirm it for you or go to the Marion County Assessors site, click on "on-line mapping", type your address in, and pull up the property card. This will identify who the owner is. There are links below.
Steve L. thanks for the info. i do have the scanned copies of the HUD-1 and Warranty Deed but I was expecting hard copies or something more official to come in the mail. The County Assessors site you sent was extremely helpful and showed that I am registered as the owner. I agree with your DD comment. It is hard to ride the fence between the proper amount research and wanting to jump in and learn from experience.
Glad the site helped you out. Since the site says you are owner of title then it's officially your property. Now Marion County will send you a tax bill, lucky you! :) You should have received a hard copy of the warranty deed from Marion County recorders office. It really is not a big deal that you have this because you have the HUD, the signed warranty deed, and the site already shows you that you are the owner of title. If you want it for your records I would reach out to the Marion County Recorders office and ask them to resend it to you. See link below.
I agree that the best way to learn is to jump in and get experience. I did back in '06 and '07 by buying on hype and emotion. It cost me but I became wiser for it. The only way to be successful is to make mistakes and learn from them. I do wish the best for you with this property and your other endeavors. I will keep following to see how successful this property becomes for you.
http://www.indy.gov/eGov/County/Recorder/Pages/hom...
Give the person at the recorders office the tax ID number of the property. It will be a 7 digit number.
@Ian E. OK glad to hear you have signed closing docs. Getting original deeds back does not seem to be a priority for either the recorders office or title companies in my experience. In my area it is normal for that to take months sometimes.
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as long as the deed is of record your fine on that end...
buying that price point of a duplex in INdy though puts you squarely in the HOOD.. Hope it works out Ok for you... there is a reason these types of properties need total renovations.. past owners could not make them work and walk from them... As @Lane Kawaoka mentioned MUCH MUCH safer to buy higher end and have rents north of 800 per door.. much better quality tenant.. when your talking a 600 or 650 tenant the quality of tenant goes down exponentially .
I've listened to some of Clayton's podcasts and also the BP podcast interview with him. I have not looked at investing w/him other than I signed up to get a weekly email. Out of curiosity, has Clayton, his wife or any other member of his team tried to rebut or defend any of the criticisms of Morris Invest in BP?
Originally posted by @Chris Falk:
I've listened to some of Clayton's podcasts and also the BP podcast interview with him. I have not looked at investing w/him other than I signed up to get a weekly email. Out of curiosity, has Clayton, his wife or any other member of his team tried to rebut or defend any of the criticisms of Morris Invest in BP?
He did chime in on the other "Morris Invest" thread but never said anything other than "hi"
I too am really curious what kind of properties they really have but can't get much info at all. I spoke with someone there named Larry who was great, but never really got much else. He sent me 3 listings then disappeared, odd as we have cash and would like to move forward. But considering some bad posts here I would rather wait until we can get some real reviews(other than his Podcast)
3 Oct- Finally was able to get ahold of Dave. He sent my deed request to Nicole and she was able to contact the county and have them scan and email all of the completed Deed. The Morris team did a good job on this part...once I was finally able to reach them.
As far as the rehab goes...In my last post I explained how I started asking for a rehab update on 24 Sep. I asked again on 30 Sep, 3 Oct, and now today, 6 Oct. The pics on 24 Sep were looking good and I was told we were almost complete. I am hoping that the last two weeks has been enough time to finished up the house and prepare it for a Zillow/Craigslist.
I will let you know once I hear something new.
This is so scary. I wouldn't want to go through this, even if it does somehow work out. I mean just getting ahold of someone will cause you to lose many days off your life due to the stress. No thanks. Subscribed and eating popcorn.
Time to get on a flight and see what's going on in person ... I would just show up, no need to announce that you are going to stop by and look at your property.
Thanks for sharing your experiences!
Did you get to see photos of the property pre-rehab?
(And of the neighbourhood you're buying into?)
Cheers,
Jan
I only saw a few photos pre-rehab, and my research included Google Streetview.
Ian E - I am in the same boat with you. I think they are just very busy and currently understaffed due to explosive growth (it's a great podcast). Last I heard from Nicole they placed tenants but I have not even spoken to the property management team or how much rent will be charged.
Shouldn't all this explosive growth mean that they have more people than "Dave" answering phones and "Nicole" communicating about operations? The notion that they don't respond to emails within any normal time frame (of 24 hours), is a big red flag. If there's an "explosion" of business, there should be a corresponding growth of employees. I'm not seeing that, and--as a current successful business owner (with 8 employees)--there should be SOME sign of business growth too!
Any News?
In a weird coincidence of timing, I was contacted after my above post by the property management team. They are setting me up for October rent roll now and sending some post-rehab photos. They placed tenants really fast - almost right when the light 6 week rehab ended.