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!

[Cameron Davis]

Originally posted by @Allen Harris:

Tyler's original post from last year says it was $9,000 in rehab on the property he selected. It is on his time line marked December 5th in that first post of this thread. I am not sure what the mystery is. The price Morris gives you up front is the price you pay. If the rehab goes over, Morris eats the cost overruns. At least, that is what they promote and what others have reported. I have not bought a property from them.

One of his posts shortly after his first post:

"Hi @Par Attaran - Just to clarify with everyone on this post regarding the rehab costs: I am not paying for a FULL REHAB at $9k....

-Tyler"

I guess I read it as he wasn't going to pay for all the work that was quoted. Now that I'm re-reading it, I guess he was just saying that $9k doesn't get a "full rehab."

[Eric P.]

@Tyler Jahnke

So throughout your whole experience, would you say going through Morris Invest was a good investment? And for your second property, would you go through them again?

[Catalino Rodriguez]

Originally posted by @Eric P.:

@Tyler Jahnke

So throughout your whole experience, would you say going through Morris Invest was a good investment? And for your second property, would you go through them again?

 He already answered that question some pages back.. Make sure to read all the pages to get all of his updates and replies. 

[Eric P.]

Not sure if I had missed it again or something but i went back and read through the last 10 pages. If possible, can anyone direct me to where he states whether he would go through with them again?

[Paul Ewing]

He never said flat out that he wouldn't work with them again, but he did say he plans to buy another house in Indy this year going through contacts he made on his trip there instead of using MI.

[Manuel Luz]

I stopped getting updates about this thread for some reason. Really glad the investment is working out for you OP.

[Sourabh Bora]

Just finished going through the whole thread. Phew!

Summary of my learning:

1)

@Tyler Jahnke , @Andrew Buchanan have had some problems regarding communications, but otherwise, things are working out fine.

2) @Jay Hinrichs  He is a true legend of BP, with experience in all aspects unlike anyone else here. He has nothing personal against Clayton. Rather, he is questioning the WHOLE model of going after cash flow in low income neighborhoods. Many people agree with him. Most experienced players are with him (@Diane G.), and has their own personal gains with appreciation play to show for it.

3) I had a call with James yesterday. They are not hiding anything. The neighborhoods are solid C , appreciation may never happen. But They truly believe this model will work out.  James works from near where I live. Letting people work from home is in line with their philosophy of "freedom" (I like that)

4) My take:  a)Things are working out for both Clayton and the customers

                      b) But .. 2/3 .. or even 10 years is too early to tell. Demographic trends, economy, jobs, automation, robot cars.. I have done a whole lot of research, seen reports using machine learning, GIS etc. Indy's phenomenal population growth has stalled. 

               c) I would personally go for $950+ rent range in a state/city with solid population/ economic growth. (Jacksonville, FL ?  or Forth Work, TX, or San antonio, TX ? ) Exit strategy, and some appreciation potential is important to me. I would use the peace of mind + turnkey experience to work on some bigger and better deals.

[Bob E.]

Someone mentioned that @Tyler Jahnke was looking to invest in another property directly, without MI, using local contacts he had made.  That is awesome.  

I think what a lot of folks lose sight of is that Turnkey offers a way for people to get into the business.  Nothing says you have to keep doing turnkey but starting with turnkey and then evolving is a very realistic way to get started.  If your returns are a little less but you get your foot in the door and learn the business you can grow on your own latter.  If you never start there is nothing to grow.

[Tyler Jahnke]

Hey All!

Eighth rental check in the bank: $750 gross rent - $75 management fee = $675 in my account.

No maintenance expenses yet (*knock on wood*). Crazy, December marks the 1 year mark since closing.

-Tyler

[Anwar Selo]

Hello @Tyler Jahnke, thank you for this amazing case study. You have inspired me to begin investing. All the best!

[Mehul Parekh]

Just finished binging on this thread. Got so very close to pulling the trigger on CM just a couple of weeks ago and then got cold feet after my buddy pointed me to some articles on BP about people's opinions (not always experiences) about his properties. Still haven't decided if I will pull the trigger with CM, yet. I do get regular emails from their group - but the ROI on most properties that they have sent recently has bene around 8-10%, not the 'at least 12%' that CM promises in his videos. @Tyler Jahnke, thank you for posting through your experience.

For anyone thinking of pulling the trigger with CM, maybe this type of open forum discussion is the right way to do it. It might hold them more accountable if their progress is being broadcasted.

[Paul Ewing]

Originally posted by @Mehul Parekh:

Still haven't decided if I will pull the trigger with CM, yet. I do get regular emails from their group - but the ROI on most properties that they have sent recently has bene around 8-10%, not the 'at least 12%' that CM promises in his videos. @Tyler Jahnke, thank you for posting through your experience.

If he would have kept them they very well could be 12%+ properties. But CM is probably getting at least $10k in profits from each house sale so there goes 4% at least in ROI.

[Joshua C.]

Originally posted by @Mehul Parekh:

Just finished binging on this thread. Got so very close to pulling the trigger on CM just a couple of weeks ago and then got cold feet after my buddy pointed me to some articles on BP about people's opinions (not always experiences) about his properties. Still haven't decided if I will pull the trigger with CM, yet. I do get regular emails from their group - but the ROI on most properties that they have sent recently has bene around 8-10%, not the 'at least 12%' that CM promises in his videos. @Tyler Jahnke, thank you for posting through your experience.

For anyone thinking of pulling the trigger with CM, maybe this type of open forum discussion is the right way to do it. It might hold them more accountable if their progress is being broadcasted.

 If you listen to the CM podcasts, he has repeatedly said he avoids forums and any negativity so he probably doesn't care what people have to say on BP or any other forum.

[Jennifer D.]

Wow this was a long thread! Thanks for all the info @Tyler Jahnke.

My husband and I are getting an inheritance and are unsure of what to invest in and how. We both work, so we thought turnkey might be an easy solution, but doesn't seem as easy as I thought now that I've read your thread. 

thanks again!

[Patrick Shawn Faherty]

Originally posted by @Jennifer D.:

Wow this was a long thread! Thanks for all the info @Tyler Jahnke.

My husband and I are getting an inheritance and are unsure of what to invest in and how. We both work, so we thought turnkey might be an easy solution, but doesn't seem as easy as I thought now that I've read your thread. 

thanks again!

 TK is easier, but not hands off... I have one property and am now mainly focusing on Note investing. You could also consider some of the RealtyShare, etc. platforms. 

[Bob Moran]

I just went through this monster thread. it was like binging Netflix.  My major takeaway from it it all was most all the haters were from the left coast or notably direct competitors.  I also noted that they died off the more rent checks and positive results were posted, Amazing!

[Andrew Eshbaugh]

Originally posted by @Bob Moran:

I just went through this monster thread. it was like binging Netflix.  My major takeaway from it it all was most all the haters were from the left coast or notably direct competitors.  I also noted that they died off the more rent checks and positive results were posted, Amazing!

 That's a good assessment Bob. I noticed the same thing!

[Anwar Selo]

Actually, I wanted to work with Morris Invest and his videos were what got me in interested. I tried to book a call and couldn’t get the timing right. 

Finally, I went ahead and I’m doing it alone. It takes longer and It’s more expensive to begin with.

However, you can learn so much and it doesn’t occupy much more time once you get started. 

I’m new and have much to learn, taking the first step is the most important thing. It’s like a domino effect. One thing you do required that you follow with another action or payment and so on. 

Thanks to everyone who contributed to this thread.

[Michael Drinkwater]

Great thread! Looking to start my investing career.  After reading this I will be much better equipped to do it in a way that works for me.  

[Paul Ewing]

I had a call with them and it was interesting.  I am not sure I would invest through them, but it is an interesting was to get started in out of state investing.  I think they target mostly California investors though because by the time MI takes their profit on the flip it isn't that much of a better deal than similar D class properties in Ft Worth I have looked at. 

I think I asked too many questions about the property management companies they set you up with because I haven't heard back from either the PM for more info or MI with any deals.  I am most concerned about the PM in low end rentals out of state especially since it sounds like they take multiple months to place tenants.  I am used to a couple weeks max on a turnover and that includes light renovations.

Anyway I like to listen to the MI podcast for inspiration to keep expanding.  I just wish they so many cringe worthy statements about the financials and how income and expenses are reported.  They don't seem to understand how Schedule E works.

[Tyler Jahnke]

Hello BP!

Hope everyone had a great Christmas! It's still technically "holiday season" and while everyone is hanging out with family/not thinking about work...naturally it's time for me purchase rental property #2...plus the market is a little easier on buyers in the Winter...

I've secured financing and am currently looking for another property in Indianapolis.

But don't worry, I'll continue to update this thread with any pertinent information regarding this specific property.

Happy Holidays everyone and Happy Investing!

-Tyler

[Nate Hammond]

Hey @Tyler Jahnke,

Thanks for the update! Are you planning to use another turnkey provider for property #2 or are you sourcing the property yourself? Thanks in advance!

[Tyler Jahnke]

Hi @Nate Hammond - I have a couple options lined up for my second investment. I've met some great people through BP, this post, and in person in Indy...whom will be key players in the purchase of my next property. I will keep you updated.

Contemplating another post similar to this one..we'll see

[Nate Hammond]

@Tyler Jahnke

Thank you for the reply! I’d love to hear about your experience with property #2 as well. I’m currently in escrow for my first property in Indy with a different turnkey provider (not Morris Invest). I’m planning on heading out to Indy this summer and attempt to create the relationships that you’ve made. Thanks again!

[Jay Hinrichs]

Originally posted by @Andrew Eshbaugh:

Originally posted by @Bob Moran:

I just went through this monster thread. it was like binging Netflix.  My major takeaway from it it all was most all the haters were from the left coast or notably direct competitors.  I also noted that they died off the more rent checks and positive results were posted, Amazing!

 That's a good assessment Bob. I noticed the same thing!

 you guys may  want to read this very thorough comprehensive post with tube videos to back it all up.

https://www.biggerpockets.com/forums/92/topics/522621-morris-invest-review-after-8-months-of-ownership?page=1#post3191046