All Forum Posts by: Steve K.

@Jonathan White the time to stop supporting his cause was over a year ago. There’s no way Clayton and Natali didn’t know they were a part of a scam back then, they were getting reports from clients and people on here way back then but still pressed forward with fraudulent videos and kept selling more “turnkey” properties for $50k that they knew were practically worthless. Clayton’s first lie can be found in his intro bio on his Morris Invest channel. He claims “I’m Clayton Morris, longtime real estate investor...”  I wouldn’t consider someone who just got into real estate investing to be a “longtime investor”, and anyone who is a longtime investor knows that selling falling down properties in war zones and claiming  they’re turnkey properties is a scam. If you rewatch the YouTube videos through the lens of knowing what happened, you can pick out lots of lies: “Nurses and doctors rent these properties”, “C class properties are easier to manage than class A properties”, promising 12% returns without lifting a finger, etc. bottom line is Clayton and Natali should not have put themselves in a position to be trusted with people’s life savings. They were posing as experts when they actually had limited experience investing themselves. People who went through the process or got partway into the process have said Clayton and his employees told them they couldn’t get an inspection or come see the property first or they would lose the deal. That’s a sure sign of a scam. I’d say at the very least Clayton and Natali were negligent in the beginning and then became complicit. At this point they’re guilty of helping people lose their hard earned money.

@Dr. Jordan E Smith Knowing your numbers is a good basis as a starting point, but don't let numbers be the only thing that informs your decisions. In your comment you state "obviously more is better", but I'm here to warn you that when it comes to real estate this is not entirely true. At least, there's more to it than that. Cap rate and NOI and COC are important, but don't assume the better the numbers the better the deal for you personally. One thing someone wiser than me once told me when I was first getting into analyzing deals is that cap rates aren't linear as in the higher the better. It was counter-intuitive for me at first to realize how caps max out and stop being good at some point, but it totally makes sense. A 15 cap in a market where 6 is average should be a giant red flag. The building probably has structural issues or is inhabited by rival gangs or both to be priced that low. That building looks great on paper, but you'll be getting into a specialized market that requires expertise you might not have such as evicting gang members or fixing major structural issues. In my market for me the sweet spot is 6-10%. You have to learn both your own market and your own sweet spot. My advice would be rather than getting too focused on cash per door, think about what kind of business you want to run. For example I have an apartment complex in a transitioning neighborhood, C- property, great cash flow on paper. Up until doing that deal I thought the bigger the building, the more cash in my pocket each month, the better. However since doing that deal I have learned that I actually prefer owning smaller buildings closer to downtown that are A's and B's. They have less cash flow on paper but I like them better overall for other reasons. I like doing business in those neighborhoods better. I like driving to those buildings more so I go more often. I like improving those buildings more so I make more improvements. I'm seeing better appreciation. I have less vacancies and less evictions. I'm using my managers less so I'm paying less management fees. On top of all that they're less stressful to own and take up less of my precious time. Since you're a doctor, you might prefer dealing with A and B class properties even though the numbers aren't as good on paper simply because they might be something you'll stay interested in and have more pride of ownership in. I think that's a big factor that shouldn't be overlooked. It sounds like you plan to self manage in the beginning so this is definitely something to consider for you personally. Real estate is like any job in that the more you put into it the more you get out of it. Your profit, like any business, will depend on how well you run the business. Since you're making doctor money and working doctor hours, real estate may be a big opportunity cost for you to put effort into to begin with anyway, and you may be even less likely to divert time away from your high paying career for properties you don't like. You should only start a second job in real estate if you have passion for it, and maybe in your case that means buying more expensive properties that you actually like. In addition to calculating how much money you want to make, think about what kind of business you want to run.

Solar hot water systems (popular in the Carter administration), used large, usually tilted up panels on the roof to preheat hot water or glycol in order to lower the homes electricity and/or gas consumption and to heat hot water. Also sometimes the hot liquid was used for radiant heat. These systems are mostly obsolete, except for heating swimming pools usually in commercial applications and there aren’t many installers left in business and even fewer installers that like to work on rehabbing older systems. Does the home still have the panels on the roof and the large tank somewhere in the house? I would remove all of it, if it hasn’t been maintained perfectly over the years it is likely to have leaks. The solar industry today is focused on photovoltaic panels, which create electricity instead of heating water or glycol.

Morris blaming OP is not acceptable. Morris was selling the rehabs, he should have known it was going to cause a massive backlog and that he wouldn’t be able provide what he was selling. It’s called basic expectation setting and having a clue if you can deliver what you’re selling or not. Playing dumb is not okay when you’re dealing with people’s life savings. He should never have been giving financial advice to begin with, he’s not a CPA or an MBA or even an experienced investor, he’s a novice. He definitely shouldn’t have put himself in a position to be trusted with other people’s money given his lack of experience investing himself. Either he’s really dumb or knew it was a scam at some point during the last year and continued selling anyway. 

@Son D. sorry the local PD was less than helpful. Kind of surprised by that but then again, I guess I’m not that surprised. 

Simon C. I recently started using Mavi, headquartered in Lakewood. I interviewed dozens of PMs in this area last year and finally settled on Mavi. It’s only been a few months but so far I really like them. It may be hard to find someone good to just find tenants for you without getting their monthly %, but one thing I like about Mavi is that they are okay with ordering their services a la carte like that. They don’t mind when I step in and want to turn a unit or rebuild a deck myself, so maybe they’d consider just fillin units for you or splitting the workload with you somehow for a discounted rate. Most PMs want total control and for owners to be hands off, which makes sense and that’s my end goal but for now I still like to save money by doing a lot of my own work and find I do a better job than most handyman type people that a PM would hire anyway so being somewhat hands on is what works for me.

@Account Closed thanks for weighing in. Dividends should definitely not be overlooked when deciding how to invest. I’ve cherry picked a few individuals as well (MSFT has been a good one, and the Vanguard high yield ETF I mentioned is heavily weighted with MSFT anyway as it is which I like but I still like SPDR better overall so I have SPDR and I’ve supplemented that with adding shares of MSFT to my portfolio for example) but wanted to keep it as simple as possible by pointing the OP towards high yield funds. Cherry picking individuals can be dangerous and I don’t recommend it for unless 90%  goes into a fund and 10% is play money used trying to outsmart everybody else (be prepared to lose it, but you’ll learn from it too). Another good thing about dividends is when the market takes a dive, aristocrat companies tend to actually increase their dividend payments in order to keep investors from selling. Hopefully GE isn’t a proxy for the market! I think that one  is an anomaly and a prime example of why I would steer most investors away from picking individuals. It could be a great buy at it’s current price, or not. You never really truly know what’s going on inside of a company, even if you work in the same industry or even if you work for that actual company and think you know, even if they look great on paper and seem like a slam dunk, **** happens. I’ve learned that myself the hard way just when you think you’ve got a pick nailed something comes out of left field that’s why funds are great. 

Just checked out the most recent Morris Invest youtube video. It's about how to use debt to protect your personal assets in the case of being sued. Very topical video! 

@Son D. Also congrats on getting access to their client email list. That's amazing. You should write a book and make a movie. I have a feeling this investment might pay off after all but in a much different way than expected! 

@Son D. Not doing the rehab work you paid them to do is a physical crime no different than any old fake contractor scam on Craig's list. It's simple grand theft. People get arrested for that every day and I bet local PD would be all over it. They wouldn't drive to NJ and get the kingpin but they'd get the guys in Indy. The larger interstate fraud piece, that's obviously more complicated, seems like that could be a RICO case the FBI would be interested in, get them for wire fraud at least possibly a host of other crimes. Creating fake leases for example I bet is a crime (forgery?). Not a lawyer, but if you feel you've been robbed, never hurts to call the cops!