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!

[Tyler Jahnke]

Hey BiggerPockets Fam!

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

No maintenance expenses for December. I've officially owned this rental property for over a year now. Looking for #2. Wishing you all an amazing 2018. It'll be the best year of your life!

-Tyler

[Jay Hinrichs]

Originally posted by @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

and now this  

https://www.biggerpockets.com/forums/92/topics/523577-oceanpointe-investments-llc

I think that about sums up the Indy run LOL... hopefully Mr. Morris will choose a better ground partner next go around.. as its apparent he is a marketer and is putting 100% of the operational success on another company.

 

[Nate Hammond]

@Jay Hinrichs

Wow! That’s crazy! How will this effect their clients, like @Tyler Jahnke?

[Will Zena]

@Jay Hinrichs in a case like this all property owners need to look for new PMs? what happens to the monies being held for security deposit; rents etc?

[Jay Hinrichs]

@Nate Hammond  I suspect  Morris is in major damage control.. if he is not then he is leaving his clients to whistle in the wind.. oceanpointe from 18th of December can no longer collect rent period end of discussion all their leases are null and void.. and all the owners need to jump in and find new managers.. low end tenants will abuse this to no end.. you being an licensed appraiser undertand professional liability.

when you change managers here is what happens.

1. you get a long laundry list of what's wrong with your property

2. new manager wants things done as well .. as they should they don't want to manage a pig.

but I have not heard anyone come on here and say hey  MI contacted me with issue with the ground partner PM and you all need to find someone new.. I think its taking most of the owners by surprise as well.

lastly having been licensed broker in CA OR MS for 40 plus years.. I can tell you to get what oceanpointe got which was the AG to step in and put them out of business there had to be massive amounts of complaints and easily provable situations that the state deemed intentional.

And since we have finally come to realize that morris is simply a marketer.. he has his fee's and off he goes will be interesting to see if he stands up for the product he promoted and makes good on all these folks who got houses that were never completed as advertised.. No one can fix the hood.. it is what it is and these folks simply did not realize that even though its one persons opinion that D class and C class is easier to manage than A class and that these people are just happy for a place to live.. those that bought that story line well they are about to get a lesson over the next few years.

[Jay Hinrichs]

@Chris Clothier  maybe Chris can answer this .. what happens when a PM gets his ticket pulled..

I suspect all security deposit need to go to the owner or a new PM..

@Will Zena  the big question I guess will be are there any deposits to get..

most of the PM's I have seen flame out did so for commingling IE security deposits rent goes missing. NOt at all saying that's the case here but I have seen it happen more than once in the deep south.

Chris new were this was headed day one.. so did I frankly.

[Will Zena]

@Jay Hinrichs whats interesting is @Tyler Jahnke just posted a couple hours ago he  just received his rent check. If Oceanpointe has been unlicensed for 3 weeks now I wonder who processed the rent payment

[Jay Hinrichs]

Originally posted by @Will Zena:

@Jay Hinrichs whats interesting is @Tyler Jahnke just posted a couple hours ago he  just received his rent check. If Oceanpointe has been unlicensed for 3 weeks now I wonder who processed the rent payment

 no clue maybe they moved licesnes already.. heck half of these people when asked don't even know the name of the company that sold them the property.. much less anything else..

Ok I am done with this company.. anyone form here on out thinks this is the way to go.. its on them.. all of us that know better have tried to help...

wish you the best

[Tyler Jahnke]

WOW! No surprise here as you all have read how frustrating communication has been with Ocean pointe.

Reaching out now to dig down to the bottom of this!

I want to make this crystal clear: I am in no way promoting Morris Invest or recommending them as a company. I am simply documenting my transparent and real journey as a new Real Estate Investor. I just happened to use Morris Invest for this particular property.

This whole post is about the Ups, the Downs, the frustration, the challenges, and the wins. Right now, rent is rolling in consistently, so that's great, but we'll see how things are in 5 years, 2 years, 1 year, 3 weeks, tomorrow...

Bottom line: I'm in a better place than I was a year ago. I've learned more in a short year than I have ever before. I made some great connections on this site and in person, and am now lined up to purchase my second property (not with Morris Invest).

Love you BiggerPockets!

-Tyler

[Matt R.]

It is my understanding after reading the AG letter, OceanPoint was not operating under a brokers license, so they did not really lose a license...they never had it from the start it appears. There were other issues regarding unreported criminal matters that were piled on so they could revoke any remaining agents license. The actual crimes were lower level non REI related.

Maybe bpers could unite on this and get another PM in mass faster? I half predict possible class action stuff once a same attorney gets wind of the multiples. 

Good luck!

[Will Zena]

@Tyler Jahnke have you been able to get to the bottom of Oceanpointe losing their license? Do you have a plan moving forward?

[Tyler Jahnke]

Hi @Will Zena - I had a very brief email exchange with Clayton and he stated there was nothing to worry about. He attached a screen shot of the still active license. With that, I'll continue to use them as my PM.

-Tyler

[Will Zena]

@Tyler Jahnke is Clayton saying that letter about Oceanpointe losing their license is a fake then?

[Liliana Ruano]

My husband and I bought a property through Morris Invest in 2016.  We have not had issues per se, but the lack of communication is unacceptable.  It takes a lot of time for them to reply to my messages (which are not many) or send me a copy of the lease.  All the invoices they send each month for rent collections are incorrect.  They are not worth my time or frustration.  I tried to get a hold of 3 people at Oceanpointe for 2 weeks with no luck.  We have switched companies, and so far, I am very pleased with the service we have been receiving.  

I feel that as soon as Clayton heard about this 'issue' with Oceanpoionte's license, he should have emailed all his clients to clear things up and put everyone as ease.

[Gerhard Maree]

I have 4 properties with morris , and just switched to a new amazing PM @Joel Wilmoth this week. 

None of the leases matched, the properties look like hey never got repaired , no heat , pipes frozen , 2,5ft sewer in the basement. 1/2 in gap between front door and door jam. Best is they actually collected more rent than reported to me , how low do you have to go to make money and screw people . but karma is a *****.

[Matt K.]

Originally posted by @Tyler Jahnke:

Hi @Will Zena - I had a very brief email exchange with Clayton and he stated there was nothing to worry about. He attached a screen shot of the still active license. With that, I'll continue to use them as my PM.

-Tyler

 Seriously, you know the owner made death threats to another member on here, and not like it's a rumor legit left a voice mail lol.

[Matt K.]

Originally posted by @Gerhard Maree:

I have 4 properties with morris , and just switched to a new amazing PM @Joel Wilmoth this week. 

None of the leases matched, the properties look like hey never got repaired , no heat , pipes frozen , 2,5ft sewer in the basement. 1/2 in gap between front door and door jam. Best is they actually collected more rent than reported to me , how low do you have to go to make money and screw people . but karma is a *****.

 Not sure what thread it was in, but people were talking about having vacant units w/ "fake" leases but they were still getting rents. Were you one of them?

[Gerhard Maree]

Originally posted by @Matt K.:

Originally posted by @Gerhard Maree:

I have 4 properties with morris , and just switched to a new amazing PM @Joel Wilmoth this week. 

None of the leases matched, the properties look like hey never got repaired , no heat , pipes frozen , 2,5ft sewer in the basement. 1/2 in gap between front door and door jam. Best is they actually collected more rent than reported to me , how low do you have to go to make money and screw people . but karma is a *****.

 Not sure what thread it was in, but people were talking about having vacant units w/ "fake" leases but they were still getting rents. Were you one of them?

 Yes

[Joel Wilmoth]

@Gerhard Maree  thanks for the compliment!  I'm afraid our business model works a little differently though.  We are honest, family-owned, ethical, and transparent....but unfortunately we only distribute to our owners the rent less expenses.  I can't make the OP model of paying out more to the owner (than the actual rent) work for our company...lol.

Believe it or not..you are the third owner that has had this experience.  We can only speculate what may really be going on with that business.  

[Liliana Ruano]

Hi everyone, typically I am not embarrassed to ask questions when I don't know or am unsure of something, but in this case, I am embarrassed.  As mentioned before I have signed up with another management company, but my question is, considering the situation they are in, what is would be the proper method of informing Oceanpointe that I no longer need/want their services?  I assume to follow the agreementt?

Thank you!!

[Jay Hinrichs]

Originally posted by @Matt K.:

Originally posted by @Tyler Jahnke:

Hi @Will Zena - I had a very brief email exchange with Clayton and he stated there was nothing to worry about. He attached a screen shot of the still active license. With that, I'll continue to use them as my PM.

-Tyler

 Seriously, you know the owner made death threats to another member on here, and not like it's a rumor legit left a voice mail lol.

 At this point Matt Tyler is either a shill for Morris or not making logical decisions LOL.. can't believe it.. and his posts on here about getting rent every month while probably accurate in his account was hugely damaging to other investors who then decided to go down this rabbit hole because of those post. sad really

[Matt K.]

Originally posted by @Jay Hinrichs:

Originally posted by @Matt K.:

Originally posted by @Tyler Jahnke:

Hi @Will Zena - I had a very brief email exchange with Clayton and he stated there was nothing to worry about. He attached a screen shot of the still active license. With that, I'll continue to use them as my PM.

-Tyler

 Seriously, you know the owner made death threats to another member on here, and not like it's a rumor legit left a voice mail lol.

 At this point Matt Tyler is either a shill for Morris or not making logical decisions LOL.. can't believe it.. and his posts on here about getting rent every month while probably accurate in his account was hugely damaging to other investors who then decided to go down this rabbit hole because of those post. sad really

 He doesn't want to lose he rent money for a vacant unit (sarcasm).....

[Son D.]

@Liliana Ruano I believe it says on the contract that you have to inform them in writing 30 days prior to discontinuing their services.

[Liliana Ruano]

Yeap. Done it already.

[Ray Sizzum]

Looks like Tyler here has discovered the secret to risk free investing. He's still getting rent checks on a house that the neighbors say has been abandoned for months.

Either that or he's the victim of an obvious ponzi scheme.