Ref: Maverick Investment Group.
Recently I sat threw a web presentation put on by Maverick Investment Group promoting turnkey properties in Kansas City. Initially I was impressed with the presentation, but, thereafter I fell in turmoil regarding what I had seen …. rather, NOT seen. I then felt compelled to share my experience with members in the Bigger Pocket community so that they may be fully aware of what they may be confronting when dealing with Maverick going forward.
With full disclosure, other than sitting through the webinar, I have had no further dealings with Maverick, nor its principals, representatives, Sellers or “Property Manager”.
Because of my background, my approach in performing due diligence may be a little different than how others move forward when evaluating an investment. If ‘back of the envelope’ calculations show that a transaction is viable, I shift FIRST into performing due diligence, not on the subject property, rather on the operator or the seller. In this case that would be Maverick and/or its management company. Mysteriously, the name of the PM company would remain unidentified during the presentation.
As the presenter was moving forward with the presentation slides, there was one slide which was quickly glossed over with little elaboration or explanation. That portion of the slide was not present but for a fleeting millisecond. If a viewer was not attentive to the missed detail of what was being presented during the webinar, one could easily assume the missed portion of information was not overly important. Long story short, I was later able to access that portion of the presentation. Paraphrasing, Maverick stated that the information provided on subject properties was not warranted and was provided as-is by the “Sellers”. Initially, I did not know how to interpret that statement, and was conflicted in that Maverick was introduced to me via a third party as a ‘turnkey provider’.
Now, I am a firm believer in the concept of transparency and full and fair disclosure. I will never deal with an operator who is not fully transparent and does not provide all information that an investor would deem to be material. So how does materiality play a role? …. A piece of information is ‘material’ to a prospective investor if a piece of information would impact the decision making process of the investor. I went into the web presentation believing that Maverick was a turnkey provider; at least that was the way it was presented to me initially by the third party. If, as the previous thread posts indicate, Maverick is a ‘marketing company’ and ‘not a turnkey provider’, then, the web presentation withheld material information and was therefore NOT fully transparent. Would it have been fair for Maverick to disclose during the web presentation that they were not a turnkey provider, rather a third party intermediary / marketer bringing together investors, sellers and PMs? Yes! Further, would this information have be ‘material’ to my decision making process? I argue yes!, yes! However, clear disclosure that Maverick is a marketing firm and not the turnkey provider was NOT provided, further aggravating the opaqueness of the presentation via a fleeting millisecond duration “slide” lamely and cryptically revealing (again paraphrasing) Maverick is not the “Seller” and information provided on the subject properties is provided NOT by Maverick, rather the some yet unidentified third party ‘seller’.
Was Maverick fully transparent during the web presentation? … was full and fair disclosure provided? I don’t think so!
I would like to expand on the viability of projects presented through Maverick. We all know that the economy is in the late stages of the cycle. I would not know when the recession will kick in, but I do know that there are key leading indicators to show that we are headed into an economic slowdown. Prudent investing would indicate it is imperative that safety margins be built into the purchase of an investment property. The safety margin is NOT there to generate profits; rather, it is what assures the preservation of capital. This is a vitally important concept in surviving as an investor, especially as we go through the contractions of the economy. Projects put forth through Maverick are encumbered with increased intermediation. Third party referrers, Sellers, PMs, and now even Maverick are participating and vying for a piece of the profit on a property sold. What then is left for the investor? I am speculating that the “fully rehabbed”, “tenanted”, and “property managed” property sold to the unwary investor, will be with WITHOUT a safety margin, likely at full retail price (a big no, no), or even at a premium. Purchasing an investment property under these conditions is unwise.
I will NOT transact further business with Maverick Investment Group.
Remember, always perform a thorough due diligence on the principals and operators of turnkey projects, PRIOR to investing in any property!
Best regards to ALL,
R. M.
