All Forum Posts by: Par Attaran

I am from the UK. My parents have 3 rental properties in the UK and were looking for another one. I told them about Clayton’s properties in Indiana. We were about to go for it, but I couldn’t shake the feeling that it seemed to good to be true. I am so glad I found this thread.

There’s a lot of information in this thread. I made a summary for my own benefit and I am posting it in case it helps anyone else:

SUMMARY

PROS

There are four reviews from people who have invested with Clayton. (Jeremy Buttell, Matthew Stellas, Jack Gibson Jeremy Buttell and Alex Peralta)

Key points form reviews:

CONS

The property management company is Ocean Pointe, which has been featured on TV news for poor service. (However the reviews posted in the Pros above suggest that Ocean Pointe are excellent)

There are two reviews from people who went to the properties in Indianapolis, but then decided not to buy. (Merritt Whitman, Shane.M)

On the podcast Clayton frequently says that as the properties are fully rehabbed, he generally has virtually no maintenance related problems for 10 years.

Both Merritt’s and Shane’s experience of viewing the properties don’t match with this. They were shown that the properties aren’t fully rehabbed, but just cosmetically improved. This means the risk of problems in the property is far higher than Clayton suggests.

There is a lot of feedback from people who have not used Clayton but have had experience in Indianapolis.

Their key points:

OVERALL:

The only advantage to these properties is their cash flow (from the rent). They don’t offer the usual property benefits of increasing in value or providing leverage (but to be fair, Clayton does advertise them as “Buy and Hold for Life”).

Reviews of people who have invested suggest that the cash flow provided is as Clayton promises. However, these reviewers haven’t had the property long enough to give a long term view.

Risks of damage, breakdowns and vacancies could also eat up into the cash flow provided.

After reading this thread, I am going to think about going for it. The cash flow is still very tempting. But I don’t think Clayton’s podcast has done a good job of communicating the risks, especially if you get a bad tenant who will probably eat up all of the cash flow (Clayton’s podcast really down plays this, especially with his comments about C class tenants being relatively hassle free). I guess this risk would be high for someone like me living in the UK, because it's not really possible to see the property before buying it. 

I didn’t realize there were other turn key companies, so I think I am going to look into them first.