To Consumer Protection Division,

 

The complaint that we (Ivie Shelton-Broker-Investors Choice Realty & William Curry-Owner/Contractor-Fourth Dynasty Enterprise) received regarding John Kelly is one of fabrication and defamation. The complaint we received is outlined with many hypocrisies, an unorganized timeline of events and blatant lies! As we dissected Mr.Kelley's complaint Mr.Kelley accuses us of deception , deceit, and misrepresentation with no evidence to support such claims.

 

In our answer below, we will outline an organized timeline of events that led us to this point. I have attached the necessary emails, pictures and email links to support each point in this answer. I (Ivie Shelton)  was taught by my father, who was a laywer, to always have evidence to support your case. Throughout this situation with Mr.Kelly and his new property management company, we have asked for documentation to support his claims a variety of occasions (evidence attached) but none was ever supplied. In this answer, we will also dive a little further in this situation then what the Mr.Kelley would like too. At the end of Mr.Kelley's complaint, he would of course like to say “But, just in summary”, but we will show you evidence of threatening emails from Mr. Kelly to myself and Mr. Curry.  Let alone, Mr.Curry was threatened by a contractor of the new management company.  Lastly, we will outline that the two core issues of Mr.Kelly’s complaint is that the property did not rent as quickly as he would liked, in which we understand. The second issue is once he cancelled the property management contract with us, the new property management company that he choose fabricated the repairs needed to be made to the house. Mr.Kelly decided to believe everything that the new management company said and that is where the story takes a turn for the worse. Please see below the answer to Mr.Kelly’s complaint.

 

 

We initially talked to Mr.Kelly in the beginning of August of 2015.  We talked about the Michigan (metro Detroit area) market, different investment strategies (including “house flipping” and “buy and hold" investing) and of course risks of investing in the metro Detroit area. Mr.Kelley also asked us questions about our licenses, references, insurance proof for Fourth Dynasty and other checks to feel secure about the validity of our companies. We understood Mr.Kelly's reservations and made sure to provide all the information necessary to assure Mr.Kelley we were owners of legitimate companies. Mr.Kelley seemed to be satisfied and we continued on with our conversations. Initially Mr.Kelly was interested in buying a home and flipping it. We advised that there were opportunities in that area but that they were not as prominent as before.  We discussed that many investors are buying and holding properties now to take advantage of the long term income potential. Mr.Kelly understood our point and said he would think about it in the long run. (I wanted to mention the above point because it will come up later in this answer) . 

 

Mr.Kelley advised us he had access to an exclusive list and could get properties at a discount and would like us to see if we could visit them and take some pictures. August 8, Mr.Kelley identified a certain property, paid a $50 evaluation fee (Attached Aug 8 Receipt Document) for the services provided, and we sent him pictures of the property he inquired on the list(Attached Aug 15-Liddesdale Property ). 

 

Conversations continued throughout September about potential craigslist ad and other marketing ideas, other investment strategies, and more due diligence for properties on the "property list" . (Sept 14 Emails Attached (3)-Saratoga Property). In Mr.Kelley's complaint, he said that he was "told" that the properties were not worth investing in. We in fact provided Mr.Kelly pictures of visits to properties to help him decide along with us if it made sense for him as an investment. Mr. Kelly did not just "blindly trust" what we said about the properties. We showed him actual pictures of properties on his list.  

 

It was mutually agreed by all parties that many of the properties were not idea investments for Mr.Kelly’s objectives.  We all agreed that we would still keep the "property list" as an option but that we (Will & Ivie) also had some other options that may fit his objectives as well. 

 

One thing Mr.Kelley had correct is there was a communication issue in October in behalf of myself (Ivie Shelton). My family was going through a tough time and I did not return his call or email for a couple of days. I made sure to try and rectify the issue once I was able to return back to work. (October 16 Email Attached). I do want to bring up the point that outside of the initial $50 that Mr.Kelley paid for the first initial property evaluation, there was never any other payment that was exchanged up to this point. We discussed with Mr.Kelley that we would rather not charge him for the property due diligence because we would rather develop a business relationship rather than be a service provider.

 

We sent Mr.Kelley a list of four properties with all the approximate details. After conversations about the properties on the list, Mr.Kelly grew some interest in the property located on 4415 Wayburn St- Google Street View  (October 25 Email & Fourth Dynasty Wayburn Repair Estimate Attached). It is a four bedroom , 1 bathroom home on the east side of Detroit. We sent him pictures of the property as well as other information that he requested. I advised to him that the property is owned by a client that  is a current property management client of ours. They are selling it because the previous management company mismanaged the property and the owners were not willing to put money back into it since they had it for so long. The property had been vacant for about 4 months, had great potential and was previously rented for $975 per our clients.

 

After more discussions, Mr.Kelley decided to move forward with purchasing the Wayburn property. The original listing price was $15k. After negotiations, Mr.Kelley ended up contracting the property for $9,500 and the sellers agreed to pay for the furnace installation . ((November 11-Counter Offer Acceptance). There are two major items that are stolen from Detroit properties if left vacate for an extended amount of time. They are furnaces and hot water tanks. Once the owner of the Wayburn property knew they were going to sell  the property they took those units out of the property. There was always an understanding that the furnace was never missing, but that Mr.Kelley was initially (per the initial quote) paying for the installation of the furnace that the seller had. If you look at the Wayburn quote that was sent, it says "Install Furnace". In Mr.Kelley's complaint, he said that he thought he was paying $1,500 to have a "new" furnace installed but that we left out the word "new". He is implying that we are trying to charge him for a service that is not performed. This claim is false because the "SELLER AGREED TO PAY FOR THE FURNACE INSTALLATION" per the purchase agreement. That is the reason why the repairs that Mr.Kelley paid were $11,400 ($5,700 *2) and not 13k (per the repair quote). Also, if you just google average furnace installation, you will see that $1500 for furnace installation alone is relatively cheaper than industry standard. Mr.Kelley never paid for a furnace installation and to to imply he thought he is getting a "new" furnace installed for $1500 is a pretty ridiculous.

 

December 17, we finally closed on the home through Fidelity National Title (Dec 17 Email Attached). This was not a wholesale deal in which brokers included their own "commission" on top of the transaction. It was a standard transaction in which Mr.Kelley received a warranty deed for the property. Total commission made was $1500. Also, by this time, Mr.Kelley indicated to us that he is no longer looking into flipping the house, as initially discussed but that he would like use the property as a "buy and hold" investment. Once the property was closed and we executed the property management contract (PM Contract Attached), Mr.Kelley and Mr.Curry would coordinate on how to move forward  with the "rent ready" repairs. Mr.Curry advised that repairs would range anywhere from 4-6 weeks because of the holidays and the elements when dealing with a Michigan weather. 

 

January 18, Mr.Curry emailed Mr.Kelley an update of property pictures (Jan 18 Email Attached). Since we were 80-90% close to finish, I decided to list the home later in the week. The home was listed on a website called Rentlinx for $975  because it was a four bedroom house. Rentlinx is a website that posts to many other websites such as Zillow, Trullia and other major websites.  I discussed the use of Rentlinx with Mr.Kelley and since he did not want to "flip" the property, there was no reason to list the home on the mls. Initially Mr.Kelley wanted to ask for a deposit equal to a month and a half rent. I advised him that leaving the security deposits equal to one month usually rent quicker but Mr.Kelley decided to keep it at a month and a half.  In February, Mr.Kelly and I exchanged emails regarding lowering the price of rent to drum up more interest. (Feb 12- Email Attached). I indeed lowered the price. There was an issue in which the property was de-listed for a day for some reason. Though Rentlinx is a website I use often, it is software based and I cannot control a website that I do not operate. Usually when I input a price change it does take 24 hours for the price change to show on the other websites. That could have been part of the reason why it was down for the day. 

 

We will say that Mr.Kelley was a micro-manager as an investor. He wanted to know updates almost on a daily basis. In most cases we tried to respond to our clients within 24 hours but that was too long for Mr.Kelley in most cases. At this time, we can also admit that we were and still are experiencing positive growth in our company and it was a bit overwhelming at the time. Between February 28-29 I talked to Mr.Kelley on the phone about the communication issues. I did in fact advise Mr.Kelley that he was not my only client and that we work with many clients. The statement that was made and the conversation itself was not in any way derogatory, aggressive, high toned or unprofessional in its manner. I just wanted Mr.Kelley to understand that sometimes we are not going to be able to answer every call and/or email exactly when it arrives. I thought we both came to an agreement without but from Mr.Kelley's complaint, it sounds like he took it differently. (Feb 29 Communication Email Attached). 

 

The renter market in the Detroit area is unlike any other in the country. One thing that we have learned in screening tenants is that just because a person is interested in the property , does not mean they qualify. We screen many people. Many do not qualify. The ones that do qualify are then setup for a showing. If the person does show to the showing, it is not guaranteed that they will fill out an application on the house. It is a game of numbers. During the months of March-April (March 14-23 Email Attached) we screened and showed the property many times. We had some potential candidates but for one reason or another they could not qualify (background check, lack of documentation...etc.). As a property manager, my job is to place a QUALIFIED tenant in the property in hopes that they will become a long term tenant. My job is not to place a tenant that can just pay "move in costs" but I will have to evict them three months later. The owner will ultimately want to know why I placed them in the first place. We understand every tenant is not "perfect" but we don't want to place just any tenant in a property that is going to cause more problems in the future. 

 

Obviously, Mr.Kelly did not appreciate this approach because between the dates of April 26-May 3, Mr.Kelley advised us that he would like to cancel his property management contract with us and transfer his property to ********** Properties & Management, LLC. I transferred the keys to one of the representatives on May 8th. After that, William was to coordinate with ********** Properties to transfer the furnace and hot water tank. THIS IS WHERE ALL THE MADNESS BEGINS! 

 

It is no secret that many property management companies make money on the rehabilitation costs of properties. I agree that there are unethical companies everywhere that do pray on outside investors. They feel that because they cannot see the property, they can quote them whatever price and the client in many cases, if already invested in the property, has no choice. You hear unfortunate stories everyday about management companies getting over on their clients. This is not the case with us as Mr.Kelley is accusing but we do feel his new property management company fabricated the repairs needed to make to the property . We provided pictures to support everything we stated. Our pictures were not "selective" as Mr.Kelley has implied but detailed and clear of the work that had been done. Below you will see that we asked for proof of pictures from Mr.Kelley and *********** Properties and were never provided with such proof as Mr.Kelley also implied in his complaint.

 

On June 4 (almost a month after the keys were provided to ********** Properties) (June 4 Email Attached)  we receive an email from Mr.Kelley saying the *********Properties advised him that there was extensive work that needed to be done to the property in order for it to be "rent ready". They then quoted him a repair estimate of almost $3200. Needless to say we were flabbergasted at the amount of the quote, let alone the majority of the items that were on the quote itself. We asked to see pictures that evidenced such a quote but they were not supplied. Mr.Kelley also sent a separate email (June 4 Threatening Email Attached) to us because he believed the false accusations issued by his new management company. Mr.Curry assured Mr.Kelley that we were not moved by threats but that we would fulfill our end of the of the initial agreement. Mr.Kelley agreed. 

 

Please see below the pictures of the property before the renovations. 

 

Wayburn Before Renovation Pictures

 

 

Now, please see the pictures of the renovations as they are being performed as well as completed.

 

Wayburn After Renovation Pictures

 

 

Throughout the month of June through early July, Mr.Curry was attempting to fulfill his portion of the agreement but was met with much resistance from the representatives of ******** Properties. (June 28 Emails Attached) At one point, Mr. Curry was also threatened physically on the phone by one of the workers of *********** Properties when trying to coordinate the furnace transfer. Mr.Curry felt physically threatened by this action and thus had more reservations regarding resolving this situation. Needless to say , we did not appreciate the threats we were receiving but did not want to stoop to such unprofessional behavior. We just wanted to move forward from this situation. 

 

As Mr.Curry was attempting to finish , he noticed a couple of issues in regards to security of the property and brought them to Mr.Kelley's attention. He did so, to make sure that everyone knew that the issues were not as a result from him or his contractors. Mr.Kelley advised us that we were responsible for anything to do with the property until he felt it was "rent ready". At this time, I sent all parties an email (July 6 Timeline Email Attached) which showed the dates of the transfer for all parties. It outlined that as of May 8 when the keys were given to ********** Propeties, we were no longer liable to anything that happened to the property. In the email, I also asked ********** Properties to provide pictures to support the estimate they quoted Mr.Kelley. AGAIN, I RECEIVED NO RESPONSE FROM ANYBODY.

 

After I sent that timeline, Mr.Kelley stopped including me in any emails to Mr.Curry and Mr.Curry had to forward over any communication he received from Mr.Kelley to me. In September, Mr.Kelley sent an email (September 2 Email Attached)  to Mr.Curry stating that we owed him a certain amount of money in an attempt of a "money grab". Mr.Kelley advised that he paid another 10k in repair costs and lost money due to rent that was not collected. Mr.Kelley initially said that he owed him close to 10k. He later sent an email saying he would settle for 5k. We explained to Mr.Kelley that he paid for services that were performed and that we did not steal any money from him. The fact that *********** Properties even originally quoted him a "rent ready" estimate of $3200 and it ended up being 10k should have sent red flags to Mr. Kelley. There is no way that any investor is going to pay another 10k for the same repairs without at least "seeing it with their own eyes".  Mr.Kelley did not even attempt to check on his investment but would rather take the word of another property management company that is just looking to make money off of him. He believes their fabrications, issues accusations towards us without any proof at all and then issues threats when we do not adhere to his accusations. 

 

To address Mr.Kelley's accusation of our company name change. Our original property management company name was Michigan Turnkey Solutions, LLC. It was initially started with three partners. One of those partners decided to leave the company to pursue their own career. Will and I always expressed the desire to change the name of the company to better suit property management and thought that was the idea time. We later changed it to Michigan Management Soltuions, LLC . The change was not done to in a attempt to deceive anyone. If that was the case, we would have never told Mr. Kelley we were changing our name in the first place. My brokerage company Investors Choice Realty has always been Investors Choice Realty. It has never changed. 

 

As you can see from all of the evidence that we have provided that the core of the issue was that Mr.Kelley (and ourselves) was frustrated that the property was not rented in a more timely fashion. That frustration coupled with false accusations of repairs not being done by the new management company further escalated what was already a sensitive situation. As you can see from the pictures, the property repairs were made to the property and that there was no money stolen from Mr.Kelley. If anything, his new property management company is the one stealing from him. We pride ourselves as being ethical professionals and hold ourselves accountable which is why Mr. Kelley could not find any complaints from our past. We do things the right way but unfortunately, others in our industry do not and when that happens, we are faced with situations such as this one. We do wish things would have gone differently with Mr. Kelley, but we will not just sit back while he makes false accusations and fabrications about us or the companies that we represent. We have been notified by various sources that Mr.Kelley, has indeed posted his fabrications and accusations on other websites and we will be taking the necessary actions to clear our name. We will not stand  for defamation from anyone and will take action to make sure that our names and the names of our companies are protected.  

 

If you have any questions, please feel free to contact either myself (Ivie Shelton) or Mr. Curry.

 

Thank you for your time.

 

Best Regards,