All Forum Posts by: Jacob Carlson

Thank you guys for your responses! So, far I have been able to find out I have several fines piling up from the city and that the property is in worse condition than I thought. It is in a C- neighborhood as Harvey Management told me. I am in the process of getting more opinions from other PMs but it is looking like the numbers work out to be fairly close either way... If I sell now as-is or spend the extra time and money to try to recoup some of the costs. Either way I will be in the hole and still own my lender roughly the same amount. I do not think that the extra effort is a smart move in this position and I think my best move will be to sell it soon. 

First I want to do what @Mark Maly suggested and try to see if Morris Invest will purchase back the property. I have heard some investors sold their properties back to Morris but at this point with the damage so wide spread on so many people I doubt he will buy back now. Its worth a shot though. 

I am also going to get an inspection on the property so I can document everything that did not get accomplished as our agreement said when I purchased the property. I can take this proof to court if I ever need to and hopefully someday there will be justice.  This is a slow process and several steps back. I felt I was gaining ground and starting my climb up the mountain but have to now start again from a lower point.

I will definitely be staying in Omaha and I am kicking myself for not doing that to begin with. I was just so excited to "take action" and start with something I thought was a solid and easier first step to ease my way in... As you know - not the case. So, I am going move forward and treat this as a hefty learning curve and I am going to get a great local property by the end of the year and start paying back my lender. 

Again, thank you all for your help! I will keep this post up-to-date as I move forward.

Hello BP community, I have found myself in a predicament and I am in need of advice. So, here is the background: I bought my first investment property through Morris Invest this January 25th in Indianapolis. My plan was to invest with them to get my feet wet and get one rental under my belt then use the BRRRR strategy from there. I was told 90 days and the rehab would be complete and a tenant would be set up in it soon after. Without getting into too much detail, I waited 4 very long months for the rehab to be completed by Oceanpointe and was told several times to trust the Morris Invest system and be patient as this is a “hands-off” way of investing. I came to find out after 4 months that nothing had been done to my investment property. I paid $46,000 for rehab and the property and have NOTHING to show for it except personal lost money and even worse; the loss of money to a private investor. As of right now my property is a complete gut job and needs roughly $30,000 of work (As I was told by Harvey Property Management in Indianapolis). I have city fines piling up and no income producing asset to pay anything off. So, I am in need of advice in what to do in this situation. I, like many others, have been wronged by Morris Invest. Yes, I have come to realize that I should never have done this in the first place and should have done better due diligence - Omaha is a great market to invest in, but I was too excited by all the podcasts and youtube videos that Morris Invest made so I jumped on it. Now, I find myself wondering if I just sell the property as-is and be done with it taking a huge loss or try to rehab it. If I sell as-is I would get $5k-$10k most likely. That is not an attractive option but neither is paying for the rehab that should have been done AGAIN. I will pay back my private investor no matter what with the interest promised. Here are the options that I see: Find a Hard Money Lender to cover rehab costs and have a local contractor and management team complete the rehab (4-6 months) then sell it for as much as I can and pay off the HML and give whatever is left to my private investor. Then I will try to do side jobs and flips (locally) until I have my private lender paid off. Try to obtain a 203k loan for the rehab and roll my expenses into a mortgage for the next 30 years Sell my property. Not sure what implications this could have.. Am I able to write this loss off and benefit very much from that? I need to talk to my CPA If I sell as-is and take the loss I would get $5k-$10k Here are the numbers: Purchase price: $46,000 (P.P. + Rehab) Rehab costs: $25,000 (as quoted by Morris Invest) My rental income would have been $725/mo Currently looking at $30,000 rehab (as quoted by Harvey Property Management) If I sell after a total rehab I would imagine I could get around $55,000-$60,000. So $46,000 + $30,000 = $76,000. Sell it for $55,000 that means we still lose $21,000. As of right now I do not have a Hard Money Lender lined up as I am still trying to pick up all the pieces of this shattered situation and get a bearing on what direction I will take. I would be happy to give anymore information that would be needed. I just know that I am in need of some guidance and would like to move forward and on with my real estate career. It is unfortunate that this happened, but I am not the only one. There are hundreds of other investors that got swindled by Morris Invest and Oceanpointe. And so many more tenants that are affected by this “bomb” that is going off in several markets connected with Morris Invest/Oceanpointe. At the end of the day, I know that my wife and I will get past this, but it is a bad start to our real estate investing career. I am not turned off to investing though, I have never been more sure that real estate is my passion and I will whole-heartedly and more intelligently now, achieve it. My goal is to obtain 15 units, SFH or Multi, by 2023 (3 a year for the next 5 years) and I am not going to let my experience with Morris Invest stop me. If you have read up to this point so far, I truly appreciate your time. I have many questions and do not know exactly what to do at this point but I am going to take the little steps everyday until my wife and I are out of this mess. Your help and replies are appreciated! Thank you in advance Bigger Pockets!

@Aram V. to answer your question, yes it is in Indiana.  Sorry for the late response.  I have received picture confirmation that next to nothing has been done on my house after waiting over five months.  

My PA also was signed by Natalie Bastin. So, my next course of action is to try to get information on what state the property I purchased through Morris Invest is at. Thanks @Jay Hinrichs for the recommendation. I am sure that rehab is not complete (if started). Once I see what I am dealing with then I will make a decision... Do I try to sell it for way below the amount I paid for the property itself + Rehab ($46k) and just get out of this mess or do I wait it out and see what comes of all this? I feel like there are many investors in the same boat as me and there is no way we are all just screwed out of our time and money.. at least I would hope not.

I bought a property from Morris Invest back in January of this year. I, like many others was allured by the numbers and podcasts and as a newbie thought it was a great way to kind of get my foot in the door of real estate investing. Boy was I wrong. My rental was supposed to be completed in 90 days and we are well over a month over that and I cannot get an answer from anyone as to what condition the property is in. No updates. I don’t know if it has even been touched since the day I bought it. I was told to “trust the system and if I can’t handle that then this way of real estate investing isn’t for you.” - this is a system no one should trust... I am fairly certain no rehab has been done on my property or at least is not complete given the facts of what is currently going on in the Indy market with MI. Everything is a mess over there right now and they are unable to help their investors. I was told since we bought the house through “Jax property” (a subsidiary company of Oceanpointe-which we didnt know) its our property and Morris invest never actually sold it to us nor will they accept any responsibility in their failures of business. We went into this believing they had their business model together and could provide what they say they can all over their online videos. That’s far from the truth and so many people are getting screwed because of it. I have seen 0 returns and do not know what state my property is in.This is not something anyone wants to get wrapped into. I was told by a Morris invest my best course of action is to find property management team myself and have them assess the property. What a JOKE! Morris Invest is something to avoid and they need to answer for all of this. I feel they have misrepresented many things and keep the wool over your eyes the entire process. It is a slimy, unethical and untruthful way to do business. My heart goes out to any other investor that trusted Morris invest with their money.

Jonny, I am in a similar situation and have reached out to Pen Fed as well. I do not want to add my own scenario in here since this is your post. I am considering the HELOC for the BRRRS strategy as well, I hope that someone can answer your question to benefit us both! Good luck!

@James Riggs

I appreciate your response. I think that turn key providers are a good way to jump into real estate but maybe not long term as they do take a slice of the cake that you can keep yourself after you become confident in your ability to find good deals yourself. They are basically wholesaling the house to you - where you could find the property yourself. But it is a convenience thing - they are proving you with a contractor, insurance, property management and the property itself. As I move forward I am going to look locally and use my "team" I am setting up. 

I may end up not using the property management company that Morris Invest provides because a solid p.m. is what can give you the peace of mind that your property is actually being taken care of.  Best of luck to you as well James! The best advice I can give is to do your due diligence and just take action!

@James Riggs 

What I did to get my first property was construct a note with a private lender laying out what numbers should be and showing them that I will be able to pay them off in the event a cash-out-refi/Heloc is not available that I can pay them off in 7 years @ 5% with the cashflow from the rental (As a secondary payment option-which they agreed with). I found a bank that will allow me to do a HELOC at 75% LTV immediately so I can pay them back at that point - Or roll it over to get another investment property. I bought it pre-rehab. And what I did was collect my money and my private investor's money together and purchased the property upfront (including rehab). I am not trying to entice you into buying from MI in anyway. There are a lot of scary posts out there on BP. Do your due diligence. Are you planning on going through MI? I do not know if I will be using them again.

I learned a lot from listening to the podcasts and they helped spur me to take action and realize that real estate is what I want to do, which I am grateful for. I will keep you all informed as I move on with my investment property. It is my first one and I am still optimistic. Oceanpointe (Bert Whalen) has had their real estate practicing privileges revoked and I heard that Morris Invest has cut ties with them. I will look into that more and get a concrete answer. 

Since, I am the one invested in them I will let you guys know the truth about how it is going.

I appreciate your concern. I have read the threads and it appeared there were times when communication could have been improved and that things did not go smoothly for some that worked with MI. In the end of all of the threads I have seen, I see that people received their rent checks and at the end of the day that is what you sign up for. It's a scary thing to trust others with your money and to do what they say they will. I know it won't be perfect but I am glad I am gaining experience and took the jump in. My property is expected to be done with rehab soon and rented out in May. 

@Eric James can you explain what some of the issues are that others have had with Morris invest?