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Has anyone done recent business w/ Morris Invest or SDIRA Wealth?
Hi BP community! Has anyone done recent business (2020 or 2021) with Morris Invest or SDIRA Wealth? When I asked them about the fraud/lawsuits they said that was Clayton Morris' old partnership with a different company and now they only refer to SDIRA Wealth which only sells new construction homes that are usually pre-leased to buyers (currently they are building in Lubbock, TX). I also have been speaking or will speak with Roofstock, Home Union, Rent to Retirement, and Marshall Reddick. If anyone has any advice or tips that would be great, I'm new to real estate investing and live in an expensive area, and wanted to invest out of state. Thank you!
#3 Investor Mindset Contributor
- Handyman
- Pittsburgh, PA
I suggest you don't think about getting into business with Clayton Morris until he moves back from Portugal and makes restitution to the victims of the Ponzi scheme he was involved in. The only defense he has offered against the charge of being thoroughly corrupt is that he is unfathomably ignorant about the residential real estate business.
@Jennifer Hung While I do not know their work personally, I think it's fair to assume that one shouldn't do business with someone who was/is being investigated by an Attorney General and the FBI.
Reading the news articles it seems they were selling dilapidated homes as turnkey to out of state investors. If you choose to work with them however, I recommend flying out, or call a Real Estate Agent/Contractor/friendto video call you, and see the property before you sign the dotted line.
@Matt Moreland have you heard anything about these companies here in Lubbock?
Completely agree with the above statements. As one who was personally defrauded by Clayton (despite his claims it was all his partner's fault), it really is disingenuous for him not to take responsibility when his Ponzi scheme fell apart. Just read through some of these articles and you'll get the idea.
https://www.indystar.com/story/news/investigations/2020/05/06/clayton-morris-bert-whalen-accused-by-indiana-attorney-general-deceptive-home-sales/5175543002/
https://www.forbes.com/sites/forbesfinancecouncil/2020/01/31/who-can-you-trust-in-the-real-estate-investing-business/#720fb12c356f
https://www.nytimes.com/2019/0...
https://www.nytimes.com/2019/0...
https://www.indystar.com/story...
https://www.indystar.com/story...
https://www.indystar.com/story...
https://www.indystar.com/story...
https://www.indystar.com/story...
https://www.newsweek.com/clayt...
https://www.usatoday.com/story...
https://thehill.com/homenews/m...
https://www.mediamatters.org/f...
https://fox59.com/2019/03/26/e...
Clayton Morris Lawsuit Case No. 1:18-cv-02797-WTL-DML
https://onedrive.live.com/?aut...
https://www.scribd.com/documen...
Clayton Morris Lawsuit Case No. 1:2019cv02467
https://dockets.justia.com/doc...
It should be telling that not a single person is coming to Clayton's defense. What Clayton is selling is a lie. He's a fraud and a criminal. There are plenty of opportunities out there, do yourself a favor and stay away from anyone and anything associated with Clayton Morris.
Oh wow! @Brittany Warner I had not heard anything until reading this thread. Wow! A whole sea of red flags waving, this is wild.
I'll chime in here as I just closed on a new property by SDIRA (by way of Morris). This is our first REI property and it is out of state for us - thus the "build to rent" model works for us. It was a brand new 4/2 SFR with a tenant already placed. The overall experience was ok, I think the Morris group realized that partnering with new construction groups is a cleaner approach rather than selling dilapidated properties and trusting rehab teams to remediate the property in earnest.
Overall we are not unhappy per se. Yes you "pay for convenience" with the build-to-rent REI model, but as a 1st time investor it was an easier path for us to at least get in the game knowing we have kids, jobs, life, etc. We also reviewed a few duplexes from SDIRA/Morris in Lubbock & nearby Sweetwater, but we felt they were charging too much for them. Also we became uncomfortable not having seen these out of state properties. We want to close on one property and just see how things go, end to end.
Will I buy another property from SDIRA/Morris? Likely not as the margins are not that great. As we learn more we will learn how to squeeze better margins out of properties.
I'm still bullish on Lubbock and hope to pickup 1-2 multifam properties soon.
Thanks @John Howard I appreciate your feedback and hope your next investments go well! I’m doing research on other companies for now.
Good luck to anyone who invests with SDIRA Wealth a.k.a. Growth equity group. Read the forums. If you did not do independent appraisal and inspection, you experience what 170+ investors experienced. Its matter of time.
Turnkey Company via SDIRA Wealth (biggerpockets.com)
I recently had a phone call with Johnny at Sdira Wealth, through Morris Invest. Although the call was educational, I did not learn of these allegations until a day later. As someone who is excited about turn key/out of state investing, I am going to continue to do more research and circle back to Morris Invest/Sdira Wealth. I will keep everyone posted on my future experiences.
Quote from @John Howard:
I'll chime in here as I just closed on a new property by SDIRA (by way of Morris). This is our first REI property and it is out of state for us - thus the "build to rent" model works for us. It was a brand new 4/2 SFR with a tenant already placed. The overall experience was ok, I think the Morris group realized that partnering with new construction groups is a cleaner approach rather than selling dilapidated properties and trusting rehab teams to remediate the property in earnest.
Overall we are not unhappy per se. Yes you "pay for convenience" with the build-to-rent REI model, but as a 1st time investor it was an easier path for us to at least get in the game knowing we have kids, jobs, life, etc. We also reviewed a few duplexes from SDIRA/Morris in Lubbock & nearby Sweetwater, but we felt they were charging too much for them. Also we became uncomfortable not having seen these out of state properties. We want to close on one property and just see how things go, end to end.
Will I buy another property from SDIRA/Morris? Likely not as the margins are not that great. As we learn more we will learn how to squeeze better margins out of properties.
I'm still bullish on Lubbock and hope to pickup 1-2 multifam properties soon.
Quote from @John Howard:
I'll chime in here as I just closed on a new property by SDIRA (by way of Morris). This is our first REI property and it is out of state for us - thus the "build to rent" model works for us. It was a brand new 4/2 SFR with a tenant already placed. The overall experience was ok, I think the Morris group realized that partnering with new construction groups is a cleaner approach rather than selling dilapidated properties and trusting rehab teams to remediate the property in earnest.
Overall we are not unhappy per se. Yes you "pay for convenience" with the build-to-rent REI model, but as a 1st time investor it was an easier path for us to at least get in the game knowing we have kids, jobs, life, etc. We also reviewed a few duplexes from SDIRA/Morris in Lubbock & nearby Sweetwater, but we felt they were charging too much for them. Also we became uncomfortable not having seen these out of state properties. We want to close on one property and just see how things go, end to end.
Will I buy another property from SDIRA/Morris? Likely not as the margins are not that great. As we learn more we will learn how to squeeze better margins out of properties.
I'm still bullish on Lubbock and hope to pickup 1-2 multifam properties soon.
Quote from @John Howard:
I'll chime in here as I just closed on a new property by SDIRA (by way of Morris). This is our first REI property and it is out of state for us - thus the "build to rent" model works for us. It was a brand new 4/2 SFR with a tenant already placed. The overall experience was ok, I think the Morris group realized that partnering with new construction groups is a cleaner approach rather than selling dilapidated properties and trusting rehab teams to remediate the property in earnest.
Overall we are not unhappy per se. Yes you "pay for convenience" with the build-to-rent REI model, but as a 1st time investor it was an easier path for us to at least get in the game knowing we have kids, jobs, life, etc. We also reviewed a few duplexes from SDIRA/Morris in Lubbock & nearby Sweetwater, but we felt they were charging too much for them. Also we became uncomfortable not having seen these out of state properties. We want to close on one property and just see how things go, end to end.
Will I buy another property from SDIRA/Morris? Likely not as the margins are not that great. As we learn more we will learn how to squeeze better margins out of properties.
I'm still bullish on Lubbock and hope to pickup 1-2 multifam properties soon.
@John Howard what is the update on the rental property you bought in Lubbock from SDIRA Wealth?
We still own the Lubbock property, no issues especially since we happen to get a good rental rate upon purchase. The only change I have is I'm a little bear-ish on Lubbock overall - its a very linear market that doesn't have a ton of "job pull" like other markets have (tech/aerospace). Lubbock just has healthcare & education as major employers. Overall, that doesn't drive up the price of homes like tech markets tend to.
We tend to lean towards a healthy balance of linear markets that are starting to have "something" that people are moving there for.
Hello All,
I was just trying to get some other opinions to see if anyone else is dealing with what I'm dealing with.
I bought one of the Duplexes in Lubbock. I was able to travel down and see the property just before closing. Basically completed just needed some clean up from construction, so to be expected. Closing was pushed off until January as they said they were backed up.
I was originally told I would have tenants in place before closing and I missed my commercial loan was partially based on this. So when I was getting closing to signing on the loan it cost me %.5 extra in interest because the property wasn't occupied. This was back in about August. So basically there was no way that it could have been occupied as it didn't finish until late December(closed Jan22).
Moving on from there I closed in early January. I keep getting the run around and saying oh it's just the slow months and things will be picking up soon. It is now May 6th as I post today. No tenants, I check up about every week, they say maybe a showing or so, but no tenants. City Wide property mgt is who I deal with and honestly when I ask for real numbers and updates I get a lot of BS run around sales talk speech. In my opinion the way they sell these I should have had tenants by December, so I'm going on about 6 months depending on how you start with no tenants in either side.
I can't remember the exact amount of Duplexes on the street when I drove down but they say there about 8 to 9 units unoccupied. Supposedly I'm on top of the priority list. We'll see...
Is anyone else dealing with these same issues and or hearing other things?
My other concern is they are supposed to be building another round of these and they can't fill the ones on my street. This is my first property so of course it's harder to keep my head in the game with %100 vacancy. I planned for it financially, but it's a headache for sure.
#4 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
- 61,572
- Votes |
- 41,792
- Posts
#4 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
Quote from @Jesse Beach:
Hello All,
I was just trying to get some other opinions to see if anyone else is dealing with what I'm dealing with.
I bought one of the Duplexes in Lubbock. I was able to travel down and see the property just before closing. Basically completed just needed some clean up from construction, so to be expected. Closing was pushed off until January as they said they were back up.
I was originally told I would have tenants in place before closing and I missed my commercial loan was partially based on this. So when I was getting closing to signing on the load it cost me %.5 extra in interest because the property wasn't occupied. This was back in about August. So basically there was no way that it could have been occupied as it didn't finish until late December.
Moving on from there I closed in early January. I keep getting the run around and saying oh it's just the slow months and things will be picking up soon. It is now May6th as I post today. No tenants, I check up about every week, they say maybe a showing or so, but no tenants. City Wide property mgt is who I deal with and honestly when I ask for real numbers and updates I get a lot of BS run around sales talk speech. In my opinion the way they sell these I should have had tenants by December basically so I'm going on about 6 months depending on how you start with no tenants in either side.
I can't remember the exact amount of Duplexes on the street when I drove down but they say there about 8 to 9 units unoccupied. Supposedly I'm on top of the priority list. We'll see...
Is anyone else dealing with these same issues and or hearing other things?
My other concern is they are supposed to be building another round of these and they can't fill the ones on my street. This is my first property so of course it's harder to keep my head in the game with %100 vacancy. I planned for it financially, but it's a headache for sure.
your rent is too high if they are sitting vacant.. there is more inventory than butts to put in them.. therefore competition for the few qualified tenants this will cause rents to go DOWN.. if a property is not rented in 2 to 4 weeks your rent is too high .. this is one of the major risk factors that many dont see when buying in a subdivision of group of ALL new rentals.. No one is factoring in Absorption ..
Quote from @Jesse Beach:
Hello All,
I was just trying to get some other opinions to see if anyone else is dealing with what I'm dealing with.
I bought one of the Duplexes in Lubbock. I was able to travel down and see the property just before closing. Basically completed just needed some clean up from construction, so to be expected. Closing was pushed off until January as they said they were backed up.
I was originally told I would have tenants in place before closing and I missed my commercial loan was partially based on this. So when I was getting closing to signing on the loan it cost me %.5 extra in interest because the property wasn't occupied. This was back in about August. So basically there was no way that it could have been occupied as it didn't finish until late December(closed Jan22).
Moving on from there I closed in early January. I keep getting the run around and saying oh it's just the slow months and things will be picking up soon. It is now May 6th as I post today. No tenants, I check up about every week, they say maybe a showing or so, but no tenants. City Wide property mgt is who I deal with and honestly when I ask for real numbers and updates I get a lot of BS run around sales talk speech. In my opinion the way they sell these I should have had tenants by December, so I'm going on about 6 months depending on how you start with no tenants in either side.
I can't remember the exact amount of Duplexes on the street when I drove down but they say there about 8 to 9 units unoccupied. Supposedly I'm on top of the priority list. We'll see...
Is anyone else dealing with these same issues and or hearing other things?
My other concern is they are supposed to be building another round of these and they can't fill the ones on my street. This is my first property so of course it's harder to keep my head in the game with %100 vacancy. I planned for it financially, but it's a headache for sure.
Sorry about the headache you are dealing with Jesse. Do you have control on the management group/rent price?
Quote from @Brian J.:
Quote from @Jesse Beach:
Hello All,
I was just trying to get some other opinions to see if anyone else is dealing with what I'm dealing with.
I bought one of the Duplexes in Lubbock. I was able to travel down and see the property just before closing. Basically completed just needed some clean up from construction, so to be expected. Closing was pushed off until January as they said they were backed up.
I was originally told I would have tenants in place before closing and I missed my commercial loan was partially based on this. So when I was getting closing to signing on the loan it cost me %.5 extra in interest because the property wasn't occupied. This was back in about August. So basically there was no way that it could have been occupied as it didn't finish until late December(closed Jan22).
Moving on from there I closed in early January. I keep getting the run around and saying oh it's just the slow months and things will be picking up soon. It is now May 6th as I post today. No tenants, I check up about every week, they say maybe a showing or so, but no tenants. City Wide property mgt is who I deal with and honestly when I ask for real numbers and updates I get a lot of BS run around sales talk speech. In my opinion the way they sell these I should have had tenants by December, so I'm going on about 6 months depending on how you start with no tenants in either side.
I can't remember the exact amount of Duplexes on the street when I drove down but they say there about 8 to 9 units unoccupied. Supposedly I'm on top of the priority list. We'll see...
Is anyone else dealing with these same issues and or hearing other things?
My other concern is they are supposed to be building another round of these and they can't fill the ones on my street. This is my first property so of course it's harder to keep my head in the game with %100 vacancy. I planned for it financially, but it's a headache for sure.
Sorry about the headache you are dealing with Jesse. Do you have control on the management group/rent price?
Yes, we do have some control, although we haven't pushed much on that. We agreed to offer a first month's rent free to help stir some business. The original quoted rent they were saying they would get was $1575 per side(It's 3 bed 2 bath 1500sq ft). It's advertised now at $1500, maybe another adjustment needs to be made. Or should I hang on to that and hope the busy summer months pick up?
I'm hoping there are some other invertors on this forum that might have some other insight.
#4 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
- 61,572
- Votes |
- 41,792
- Posts
#4 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
Quote from @Jesse Beach:
Quote from @Brian J.:
Quote from @Jesse Beach:
Hello All,
I was just trying to get some other opinions to see if anyone else is dealing with what I'm dealing with.
I bought one of the Duplexes in Lubbock. I was able to travel down and see the property just before closing. Basically completed just needed some clean up from construction, so to be expected. Closing was pushed off until January as they said they were backed up.
I was originally told I would have tenants in place before closing and I missed my commercial loan was partially based on this. So when I was getting closing to signing on the loan it cost me %.5 extra in interest because the property wasn't occupied. This was back in about August. So basically there was no way that it could have been occupied as it didn't finish until late December(closed Jan22).
Moving on from there I closed in early January. I keep getting the run around and saying oh it's just the slow months and things will be picking up soon. It is now May 6th as I post today. No tenants, I check up about every week, they say maybe a showing or so, but no tenants. City Wide property mgt is who I deal with and honestly when I ask for real numbers and updates I get a lot of BS run around sales talk speech. In my opinion the way they sell these I should have had tenants by December, so I'm going on about 6 months depending on how you start with no tenants in either side.
I can't remember the exact amount of Duplexes on the street when I drove down but they say there about 8 to 9 units unoccupied. Supposedly I'm on top of the priority list. We'll see...
Is anyone else dealing with these same issues and or hearing other things?
My other concern is they are supposed to be building another round of these and they can't fill the ones on my street. This is my first property so of course it's harder to keep my head in the game with %100 vacancy. I planned for it financially, but it's a headache for sure.
Sorry about the headache you are dealing with Jesse. Do you have control on the management group/rent price?
Yes, we do have some control, although we haven't pushed much on that. We agreed to offer a first month's rent free to help stir some business. The original quoted rent they were saying they would get was $1575 per side(It's 3 bed 2 bath 1500sq ft). It's advertised now at $1500, maybe another adjustment needs to be made. Or should I hang on to that and hope the busy summer months pick up?
I'm hoping there are some other invertors on this forum that might have some other insight.
this is one of the biggest mistakes investors make that own only one property or two.. hanging on in hope to get an extra 75 bucks in rent.. so now you have waiting at least 3 months of vacancy and lets say you should rent for 1400 so thats 150 a month .. how many months will it take to make up 3 X 1400 if you hold out for that extra 100 to 150 a month. thats 4200 in lost rent at 100 a month it will take you 42 months to get that money back.. and if you keep waiting it just gets worse.. price your rental to be the BEST priced one on the block the first one to get occupied not the last. this is were competition for rentals can bring rents DOWN and does. do the math.. @Jim K. will have some wisdom on this one.
@Jesse Beach sorry to hear that you have had such a rough go of it on your first property. In my experience these brand new rentals don't get the rents anticipated by out-of-state buyers. Renters see that the whole neighborhood is available for rent and they push to see who will give them the best deal (or which agent will cut them a deal).
@Jay Hinrichs said it exactly right. Every month of lost rent while holding out for a few extra dollars only puts you behind in the long run. I would recommend dropping the rent to get it occupied, and only raising rents slightly while occupied and making more significant jumps to get closer to market rate when a tenant has to relocate and cannot renew.
Jesse, we've got quite a few new and newer duplexes in Lubbock and have not had any issues getting multiple qualified apps per vacant unit within a few days of listing it. The demand here far exceeds the supply so there is no reason why your property should not have been leased months ago. Feel free to shoot me a message and we can talk through what has and hasn't worked for us in the Lubbock market and come up with a strategy to get it rented so you can stop eating those holding costs every month.
Cheers!
Matt
@Jennifer Hung. Can I ask why you are looking for a turnkey company vs working with an investor friendly realtor who has a network for you. Then you just pick your market and focus on that. Just a suggestion.
@Jay Hinrichs I agree on the pricing, honestly this could be me listening to much to the property mgt team saying what they thought they should get, maybe time to make a bigger cut. There is still plenty of room above how much the mortgage is.
@Matt Moreland I'll take you up on that and just see if I'm way over the line on how much the suggested to rent the property at for what I have.
Thanks everyone for chiming in
#3 Investor Mindset Contributor
- Handyman
- Pittsburgh, PA
I have to agree with what's been written here. High rents aren't worth holding out for. But I would add this: the right tenants are most definitely worth holding out for.
In the LTR game, good tenants, in any long-term rental situation, almost always understand that they ARE good tenants. They understand what neighborhood rents are and what they should be paying. They understand that there's value in what they provide, which is steady, documented income, minimal turnover, steady payment, quality references, no drama, and peace of mind. Good tenants do not typically apply for overpriced apartments. Bozo and Krusty, who are absolutely desperate for a place (almost always for good reason), are who WILL apply for overpriced apartments, usually because they have no real concept of how they're going to afford the rent.
Turnover and vacancy are what kill you in the LTR game, and they kill you faster if you're working with a small portfolio.
@Jennifer Hung can't speak to Morris Invest, but I can speak to R2R and they have been awesome. Super helpful and their CEO Zach is very knowledgeable and obviously cares about making sure his clients are taken care of. I'm currently building a new build 4/3 with them out in Cape Coral FL for an all in cost of $265k. The prices have gone up a bit since then, but the post construction appraisal on a dry lot are coming out to about $375k and rents about $2300 or so. Pretty dang impressive!! May even refi and take all my money out similar to a BRRRR when it's done. Feel free to reach out if you want to bounce ideas. Good luck!