Morris Invest Case Study 2.0

[Tyler Jahnke]

Hello BiggerPockets!

I stumbled upon the Morris Invest Case Study by @Ian E. and am now inspired to document my current investment with the company. This is kind of a long post, but I hope you stay with me. Clayton Morris (founder of Morris Invest) has an amazing front facing impression with his valuable podcast (I listen to it everyday) and the multiple interviews he's had with reputable sources (BiggerPockets, EOFire). That's how I got hooked on the buy and hold model his company sells.

Even with all that exposure, and the fact that he's a TV host, it was hard to find and really dig into the details of his company online and there's not a lot of specific content on Morris on BiggerPockets. So here's what transpired:

November 12 - Had a scheduled call with Morris Invest. Thoughts: first, I thought I'd actually be on the phone with Clayton, but it was with Larry, who is an Acquisitions Manager. He gladly answered the 20+ questions I had as if he was reading a script. I get it, he gets the same questions all the time from new investors. Very friendly and easy to talk to. We ended up talking about a couple properties at the end of the 30 minute call and he said he'd email over additional details.

Couple days pass and no email from Larry regarding properties.

November 16 - I assumed I'd get an email from him within 24 hours maybe even 48 but nothing came through so I gave him a call. He explains he sent an email the same day we spoke. I check my SPAM folder, and sure enough it's sitting there. Can't blame this on Morris Invest, feel a little embarrassed, and assess the properties. One of the properties catches my eye:

Acquisition: $24,000 + Rehab: $15,000

Rent: $600

I do my research - LOTS of Google Street View, research on Zip Code, crime stats, Zillow for home value and comp values (I know, not the best) tax numbers. At this point I'm VERY interested and have cash ready.

November 18 - Another Call with Larry for additional questions on the specific property. I ask about everything from Inspection Reports, rehab details (I have specifics for what I want in a rehab), potential scope of work, etc. His general answer was: he'll have my answers by November 22.

November 22 - I follow up with Larry via email as he said I'd have final answers to my questions today.

November 23 - I receive an email from Larry stating the property I'm interested was SOLD over the weekend. He attaches another property in the email for me to look at. I am not interested as it sits directly next to a bar. He states I need to put a property under contract as soon as possible if interested otherwise it'll get picked up quickly.

Obviously, this was not the best example of communication, and set me a little off. I began to question investing with Morris Invest.

November 30 - I receive an email from Larry checking in saying he hasn't forgotten about me. He has some properties becoming available soon. I appreciate this communication and am glad he checked in.

December 5 - I get a property from Larry that catches my eye! $37,000 acquisition + $9,000 in renovations. Should rent at $750/month. I get introduced to Nicole, Operations Manager, I ask to put it under contract, but don't sign just yet.

December 5-7 - I send a couple emails to Nicole regarding the Purchase Agreement, but don't get any answers. I get them answered by asking a colleague who owns his own Realty company. I send another email to Nicole as I need my name revised and cc Larry on the email in for hopes of a prompt response.

December 8 - I sign the Purchase Agreement. Introduced to Danny for Insurance (answer three questions he sent via email) and Daniel for Title work (also answer 3 of his questions via email).

December 12 - I finalize Insurance on the property.

December 13 - Check in with Daniel as I didn't get any updates on closing or next steps after answering his initial questions on 12/8.

December 14 - I receive closing documents, wire instructions, and title work. Need some time to read over everything before signing.

December 15 - Nicole said I'd receive the Scope of Work before closing, but didn't yet, so I check in with her and get it.

December 16 - I send over closing documents, wire money.

December 22 (TODAY!) - I receive the final closing package from Title company with all signed documents. They're saying I should get the Owner's Title Insurance Policy and Deed via email in a couple weeks.

I also am now officially in the rehab phase. Nicole reached out with the Scope of Work and wire instructions. I pay 50% of rehab cost to start construction, 25% in 3 weeks, and the last 25% at completion of renovations. I responded back with numerous questions regarding the Scope as I really want to know where my money is going. I have not wired anything yet. The scope had a number of typos and unreadable line items. Hoping I get a response soon!

I'll keep you all updated!

[Gary L.]

@Tyler Jahnke Thanks for the thread and updates! It definitely has been a roller-coaster ride reading through all the posts as someone said. I'm glad it all worked out at the end for you.

Got a question for you - Since you have visited the house you purchased in person, do you agree with some of the posters here calling its neighborhood as unsafe, "ghetto," or a war zone?

Maybe @Andrew Buchanan can chime in as well? Thanks guys!

[Andrew Buchanan]

Hi @Gary L. - I cannot comment as I have not made a trip out there (yet).  I do plan on going soon.  I've looked at google earth and "driven" down the road virtually and mine doesn't appear to be on the best street, but I have nothing to base it on since I've never been there.  Once I do get out there I will definitely post back here on my impression.  I do feel like we all have our own bias and what we feel comfortable owning, so you'll need to take my POV with a grain of salt of course, just like everyone else's.

[Vera Herlihy]

@Tyler Jahnke thanks so much for this. How is it going now. I'm about to fly to indie to meet the team. I am also working with Larry and like you have experienced less than favorable communication. Would be so grateful for any info you can give me now that you are done and rented. I'm assuming since this post was from 8 months ago. 

in gratitude, 

vera

[Vera Herlihy]

@Andrew Buchanan did you by chance go to indie to meet their team. I'm am flying out from Ca to meet them and take a tour. 

Would you recommend them?

Thanks vera

[Andrew Buchanan]

As I just mentioned above, I have not gone out to Indy yet. I can't either recommend or not recommend them at this point.  At the end of the day I did receive a rented out property within 6 weeks.   I would be happy to discuss more with you over the phone if you'd like.

[Gary L.]

@Andrew Buchanan Thanks for the reply and honesty. Yeah, we definitely have our own bias on these type of things. 

I really appreciate your willingness on sharing your journey and opinion with us. Looking forward to hear more from you.

[Thomas Jonsson]

Thank you @Tyler Jahnke for sharing your journey. I'm following this thread and hope to see further non-eventful updates. Same to you @Andrew Buchanan !

I went to Indy last weekend for the first time. Was able to schedule a meeting with a turnkey provider but not Morris because Larry never got back to us. Covered about 300 miles and just looked at several neighborhoods. All in all, I'm very impressed with Indy even though driving through some of these C and D neighborhoods was at times scary. I've read on BP several times that Indy is a street-to-street kind of place - and it truly was remarkable the feel of one block to the next. 

[Will Zena]

@Tyler Jahnke i was curious how things are going 7 months later. any updates?

[Tyler Jahnke]

Hi @Will Zena the past 5 months have been pretty smooth. I should be getting my next rent check next week. If you've been following along, I've reported once each rent check comes in and mention my expenses (which have been $0 so far...*fingers crossed*).

-Tyler

[Nate Hammond]

@Tyler Jahnke When are you planning on purchasing your second property, if at all? And have you given any thought as to which turnkey company you want to use for number two?

[Will Zena]

thanks for the update @Tyler Jahnke  I will be following in your footsteps and purchasing from Morris Invest is the very near future. I will share my experiences which to date have been very positive. 

[Cameron Davis]

Originally posted by @Tyler Jahnke:

... the past 5 months have been pretty smooth. I should be getting my next rent check next week. If you've been following along, I've reported once each rent check comes in and mention my expenses (which have been $0 so far...*fingers crossed*).

-Tyler

 I never saw your total cost for purchase AND rehab. You talked about a $9k estimate for rehab but said you weren't going to do all that work right away. I think you've posted all other numbers. It looks to me like you might have gone a bit overboard with some of the renovations, depending on the neighborhood... painting the basement walls? If your tenants stay, this could turn out very well for you. From your experiences with the Property Manager, I'd consider finding a new one.

And just to compare numbers, I have 9 properties in Indy, and typically for a duplex I can spend $65k while renting each side for $750/month. I'm sure with all the people you've met here, you realize that you don't need to go through a company like Morris.

[Kraig Kujawa]

@Tyler Jahnke how has the mgmt company been? Any bumps or second purchases incoming? Lastly did you mention how much cash flow they set you up with?

[Kraig Kujawa]

@Cameron Davis      wow, how and why did you end up investing so heavily in indy?

[Mark Keeler]

I had a good conversation with James at Morris Invest.  No sales pitch.  Seems like properties get sold quickly.  The properties photos that James sent looked beat up-just as Clayton Morris said.

I live in California and it's a great sellers market.  Seems like the Morris Invest is a good option as they have a team in place.  No doubt many of us could find and put together deals like this.  However, it requires a lot of time and patience.

I saved up enough money this past year to purchase a rental.  Hind sight says I should have been spending time on Bigger Pockets and doing my home work before I had the money.

I am fortunate enough to be friends and coworker with Investor/Podcaster David Greene (Bigger Pockets).  I text him with lots of questions.  I will ask him about Morris Invest.

[Eidref Laxa]

For those just jumping in at then end, the first few pages are such grabbers. Super useful rehab info for newbs from pros.. Seriously. @Tyler Jahnke should be receiving a check any day now and should be updating us. I would really love for him to follow up on @Cameron Davis question regarding total rehab and all in cash amount. I have other questions but I'll leave it at that hoping you have the chance to answer!  

[Gustavo Munoz Castro]

@Tyler Jahnke Just spent 2 hours going through all 17 pages of the thread. LOVED it, I'm heading to Indy next month and will spend an entire month there getting to know the areas and building a team. Would love to connect and see if I can do anything for you while I'm out there. Cheers!

[Glenn Paulson]

Hey BiggerPockets!

Got another super quick and boring update for you. Hoping these updates become very very very routine! I officially received my fourth rental check deposited to my account today. Details:

$750 gross rent - $75 management fee = $675 in my account.

No expenses for the month of July.

-Tyler

@Tyler Jahnke

Thanks for your posts. I'm a pretty good judge of a persons character. I have a high impression of Clayton (and his wife). I am glad I read through most of this thread to help balance it all out. Still not confident to move forward just yet. Can you answer a few questions?

1. What class neighborhood would you classify your property? C or D?

2. What is your Cash Flow after expenses?

3. Will you invest with them again?

Thanks in advance

Glenn

[Glenn Paulson]

Take 2

@Tyler Jahnke

@Tyler Jahnke

Thanks for your posts. I'm a pretty good judge of a persons character. I have a high impression of Clayton (and his wife). I am glad I read through most of this thread to help balance it all out. Still not confident to move forward just yet. Can you answer a few questions?

1. What class neighborhood would you classify your property? C or D?

2. What is your Cash Flow after expenses?

3. Will you invest with them again?

Thanks in advance

Glenn

[Brandon Stevens]

8 month later, Tyler how has it all worked out?

[Tyler Jahnke]

Hi @Nate Hammond - my plan is to close on a second rental property and have it rented by the end of 2017. I'll use my connections made out in Indy to target, acquire, and manage this second property.

-Tyler

[Tyler Jahnke]

@Kraig Kujawa - Conservatively, my cash flow is $375/month.

[Tyler Jahnke]

Hey BP!

Here's another quick update for you. I officially received my fifth rental check deposited to my account last week: $750 gross rent - $75 management fee = $675 in my account.

I also sent a casual check-in email to my property manger on August 20th (19 days ago...) asking a few basic questions about maintenance, repair, and if they've been by the property in the past 5 months.

I have not heard from them at all. I even sent a second follow-up email on August 24th. Communication continues to be very frustrating.

-Tyler

[Mark Whitted]

You need to pick up the phone sir. 

[Soh Tanaka]

If one method of communication (email in this case) doesn't work, you need to try another way (phone call).