Tulsa Real Estate Fund: A Revolutionary Investment Opportunity or a Risky Venture?

Real estate is one of the most lucrative and stable forms of investment, but it is also one of the most expensive and inaccessible for many people. Especially for the African-American community, which has historically faced discrimination, segregation, and gentrification in the housing market, owning and developing real estate can be a challenge. That is why the Tulsa Real Estate Fund (TREF) was created in 2018, as the first African-American owned Regulation A+ Tier II crowdfund designed to revitalize urban communities across the U.S.

TREF was founded by Jay Morrison, a former high school dropout, drug dealer, and three-time felon who turned his life around and became a successful real estate investor, entrepreneur, author, speaker, and activist. Morrison named the fund after the Greenwood District of Tulsa, Oklahoma, which was once known as “Black Wall Street” for its thriving African-American businesses and wealth in the early 20th century. However, in 1921, a white mob attacked and destroyed the neighborhood, killing hundreds of Black residents and leaving thousands homeless. Morrison wanted to honor the legacy of Black Wall Street and create a platform for collective investing and community empowerment.

TREF allows both accredited and non-accredited investors to buy shares in the fund for as little as $500 and own a stake in a portfolio of real estate projects that aim to provide affordable housing, commercial spaces, and agricultural land for urban areas. TREF also claims to offer a reasonable rate of return for its investors, as well as social and economic benefits for the communities it serves. TREF has raised over $11 million from more than 14,000 investors since its launch, and has acquired or financed several properties in Atlanta, Baltimore, Chicago, Detroit, Memphis, and other cities.

What happened to the Tulsa Real Estate Fund?

Despite its ambitious vision and initial success, TREF has also faced some challenges and controversies in its operation. Some of these include:

Delays in financial reporting and dividend distribution. TREF has been criticized for not providing timely and transparent information about its financial performance and returns to its investors. According to its website1, TREF has not published its annual report for 2020 or its quarterly report for Q1 2021 as of June 2021. TREF has also not paid any dividends to its investors since 20192, citing the impact of the COVID-19 pandemic on its cash flow and operations.

Lawsuits from former employees and partners. TREF has been sued by several former employees and partners who allege that they were wrongfully terminated, defrauded, or harassed by Morrison or his associates. For example, in 2019, Ernestine Johnson Morrison, the ex-wife of Jay Morrison and the co-founder of TREF, filed a lawsuit against him for breach of contract, fraud, conversion, unjust enrichment, and other claims3. She accused him of mismanaging the fund’s finances, diverting funds for his personal use, and engaging in extramarital affairs. 

The lawsuit was later dismissed by mutual agreement of the parties4. In another case, in 2020, Tony Robinson Jr., a former business partner of Morrison who goes by the name “Tony the Closer”, sued him for breach of contract, fraud, defamation, and other claims5. He alleged that Morrison failed to pay him commissions for his role in raising capital for TREF, stole his intellectual property, and spread false rumors about him online. The lawsuit is still pending in court.

Complaints from investors and customers. TREF has also received numerous complaints from investors and customers who claim that they have not received the services or returns they were promised by Morrison or his affiliates. For example, on the Better Business Bureau website6, 

TREF has an F rating based on 17 complaints filed against it. Some of these complaints accuse TREF of not providing updates on its projects, not responding to inquiries or requests for refunds, not honoring its refund policy, and not delivering on its educational programs or mentorship opportunities. Similarly, on Trustpilot7, TREF has a 2.4 out of 5 rating based on 29 reviews. Some of these reviews express dissatisfaction with TREF’s customer service, communication, transparency, accountability, and performance.

Tulsa Real Estate Fund Scandal

One of the most serious allegations against TREF is that it is a scam or a Ponzi scheme that is taking advantage of unsuspecting investors who want to support a noble cause. Some of the reasons why some people suspect that TREF is a scam are:

Lack of due diligence and regulation. TREF is registered as a Regulation A+ Tier II offering under the Securities and Exchange Commission (SEC), which means that it can raise up to $50 million from the public without going through the rigorous process of a traditional IPO. However, this also means that TREF is subject to less oversight and disclosure requirements than other types of securities, and that investors have less protection and recourse in case of fraud or mismanagement. TREF is also not registered or licensed as a real estate investment trust (REIT) or a real estate fund in any state, which raises questions about its legal status and compliance with state laws and regulations.

Lack of experience and expertise. TREF is managed by Jay Morrison, who has no formal education or training in real estate, finance, or business. He also has a criminal record and a history of bankruptcy, which may affect his credibility and trustworthiness as a fund manager. TREF’s board of directors and advisory board also consist of people who are mostly affiliated with Morrison’s other businesses or organizations, such as the Jay Morrison Academy, the Legacy Center, and the Black House8. Some of these people have also been involved in legal disputes or controversies with Morrison or TREF, such as Ernestine Johnson Morrison and Tony Robinson Jr. TREF does not seem to have any independent or qualified professionals or experts who can provide guidance, oversight, or accountability for its operations.

Lack of transparency and accountability. TREF has not been consistent or clear about its financial performance, returns, projects, or strategies. It has not published its audited financial statements or reports for 2020 or 2021, nor has it paid any dividends to its investors since 2019. It has not disclosed how much money it has raised, spent, earned, or lost since its inception, nor has it provided any evidence or documentation of its assets, liabilities, income, or expenses. It has not revealed how it selects, evaluates, acquires, develops, manages, or sells its properties, nor has it shared any details or updates on its current or future projects. It has not explained how it calculates its net asset value (NAV), which is the basis for its share price and valuation. It has not established any clear or realistic goals, objectives, metrics, or benchmarks for its performance or impact.

Tulsa Real Estate Fund Lawsuit

As mentioned earlier, TREF has been sued by several former employees and partners who allege that they were wrongfully terminated, defrauded, or harassed by Morrison or his associates. One of the most notable lawsuits is the one filed by Ernestine Johnson Morrison, the ex-wife of Jay Morrison and the co-founder of TREF. Here are some of the key facts and allegations from her lawsuit3:

Ernestine Johnson Morrison was married to Jay Morrison from 2017 to 2019. She was also his business partner and co-founder of TREF. She claims that she contributed significantly to the creation, development, marketing, and fundraising of TREF.

She alleges that Jay Morrison mismanaged the fund’s finances and diverted funds for his personal use. She claims that he used TREF’s money to pay for his lavish lifestyle, including luxury cars, clothes, jewelry, travel, gambling, and entertainment. She also claims that he used TREF’s money to pay for his extramarital affairs with multiple women.

She alleges that Jay Morrison breached their prenuptial agreement and their operating agreement for TREF. She claims that he failed to pay her alimony and child support as agreed upon in their divorce settlement. She also claims that he failed to honor her ownership rights and interests in TREF as agreed upon in their operating agreement.

She alleges that Jay Morrison committed fraud, conversion, unjust enrichment, breach of fiduciary duty, and other torts against her. She claims that he deceived her about his financial situation, his marital status, his business dealings, and his intentions. She claims that he converted her property and assets for his own benefit. She claims that he enriched himself at her expense. She claims that he violated his fiduciary duty to act in the best interest of TREF and its investors.

She seeks compensatory and punitive damages, as well as injunctive relief, from Jay Morrison and TREF. She also seeks an accounting and a dissolution of TREF.

The lawsuit was filed in the Superior Court of Fulton County, Georgia, on October 15, 2019. The case number is 2019CV328697. The lawsuit was later dismissed by mutual agreement of the parties on February 18, 2020. The terms of the settlement are not publicly disclosed.

Tulsa Real Estate Fund Performance

One of the main questions that investors and potential investors have about TREF is how well it is performing and what kind of returns it is generating. However, as mentioned earlier, TREF has not been transparent or consistent about its financial performance, returns, projects, or strategies. Therefore, it is difficult to assess or evaluate TREF’s performance objectively or accurately.

According to its website, TREF’s share price as of June 2021 is $10.00, which is the same as its initial offering price in 2018. This means that TREF has not appreciated or depreciated in value since its launch, and that investors have not gained or lost any capital from their investment. However, this also means that TREF has not provided any capital appreciation or growth for its investors, which is one of the main objectives of any investment fund.

According to its website, TREF’s last dividend payment was in December 2019, when it paid $0.10 per share to its investors. This translates to a dividend yield of 1% per annum, based on the share price of $10.00. This means that TREF has provided a modest income for its investors, but not a significant or competitive one compared to other investment funds or options. For example, the average dividend yield for U.S. REITs as of June 2021 is 3.2%, which is more than three times higher than TREF’s dividend yield.

According to its website, TREF’s net asset value (NAV) as of June 2021 is $10.00 per share, which is the same as its share price and its initial offering price. This means that TREF’s NAV has not changed since its launch, and that it reflects the fair market value of its assets minus its liabilities. However, this also means that TREF has not increased or decreased its NAV since its launch, and that it has not created or destroyed any value for its investors or stakeholders. Moreover, it is unclear how TREF calculates its NAV, what assumptions or methods it uses, and what sources or data it relies on.

Tulsa Real Estate Fund Bankruptcies

Another question that investors and potential investors may have about TREF is whether it is solvent or insolvent, and whether it has filed for bankruptcy or not. According to public records, TREF has not filed for bankruptcy under Chapter 7 (liquidation) or Chapter 11 (reorganization) of the U.S. Bankruptcy Code as of June 2021. This means that TREF has not declared itself unable to pay its debts or obligations, and that it has not sought legal protection from its creditors or court supervision over its operations.

However, this does not necessarily mean that TREF is financially healthy or stable, or that it will not file for bankruptcy in the future. As mentioned earlier, TREF has not published its audited financial statements or reports for 2020 or 2021, nor has it paid any dividends to its investors since 2019. It has also faced several lawsuits from former employees and partners who allege that it owes them money or compensation. These factors may indicate that TREF is facing financial difficulties or challenges that may affect its liquidity or solvency.

Furthermore, Jay Morrison, the founder and CEO of TREF, has a history of bankruptcy himself. According to public records, Morrison filed for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code in New Jersey in 2014. He listed his assets as $217,546 and his liabilities as $1,545,478. He also reported his income as $19,583 per month and his expenses as $24,150 per month. He claimed that he had no disposable income to repay his debts. He was granted a discharge of his debts by the court in 2015. This may raise questions about his financial management and credibility as a fund manager.

Tulsa Real Estate Fund SEC

Another question that investors and potential investors may have about TREF is whether it is regulated or supervised by the Securities and Exchange Commission (SEC), which is the federal agency that oversees and enforces the securities laws and regulations in the U.S. According to its website, TREF is registered as a Regulation A+ Tier II offering under the SEC, which means that it can raise up to $50 million from the public without going through the rigorous process of a traditional IPO. However, this also means that TREF is subject to less oversight and disclosure requirements than other types of securities, and that investors have less protection and recourse in case of fraud or mismanagement.

According to the SEC website, TREF filed its initial Form 1-A (offering statement) with the SEC on March 16, 2018, and received its qualification (approval) from the SEC on May 29, 2018. TREF also filed its annual reports (Form 1-K) for 2018 and 2019, and its semiannual reports (Form 1-SA) for Q2 2018, Q2 2019, and Q2 2020 with the SEC. However, TREF has not filed its annual report for 2020 or its quarterly report for Q1 2021 with the SEC as of June 2021. This means that TREF has not complied with its reporting obligations under the SEC rules, and that it may face penalties or sanctions from the SEC for its failure to do so.

According to the SEC website, TREF has not been subject to any enforcement actions or investigations by the SEC as of June 2021. This means that TREF has not been accused or found guilty of any violations of the securities laws or regulations by the SEC, and that it has not been ordered to cease or desist from its activities or pay any fines or restitution by the SEC. However, this does not necessarily mean that TREF is free from any wrongdoing or misconduct, or that it will not be subject to any enforcement actions or investigations by the SEC in the future. The SEC may initiate an enforcement action or investigation against TREF at any time if it suspects or receives evidence of any fraud, misrepresentation, manipulation, or other violations by TREF or its affiliates.

Tulsa Real Estate Fund Reviews

Another question that investors and potential investors may have about TREF is what kind of reviews or feedback it has received from its existing or former investors, customers, or stakeholders. As mentioned earlier, TREF has received numerous complaints from investors and customers who claim that they have not received the services or returns they were promised by Morrison or his affiliates. For example, on the Better Business Bureau website, TREF has an F rating based on 17 complaints filed against it. 

Some of these complaints accuse TREF of not providing updates on its projects, not responding to inquiries or requests for refunds, not honoring its refund policy, and not delivering on its educational programs or mentorship opportunities. Similarly, on Trustpilot, TREF has a 2.4 out of 5 rating based on 29 reviews. Some of these reviews express dissatisfaction with TREF’s customer service, communication, transparency, accountability, and performance.

However, TREF also has some positive reviews or testimonials from investors and customers who claim that they have benefited from their investment in TREF or their participation in its programs or events. For example, on its website, TREF features several video testimonials from investors who share their stories and experiences with TREF. 

Some of these testimonials praise TREF for its vision, mission, impact, education, community, and empowerment. Similarly, on YouTube, TREF has several videos of its projects, events, interviews, and webinars that showcase its achievements, activities, and opportunities. Some of these videos have thousands of views, likes, comments, and shares from viewers who support or appreciate TREF’s work.

Therefore, it is important for investors and potential investors to do their own research and due diligence before investing in TREF or engaging with its affiliates. They should not rely solely on the reviews or feedback from others, but also verify the information and claims made by TREF or Morrison themselves. They should also be aware of the risks and challenges involved in investing in a crowdfunded real estate fund that is subject to less regulation and oversight than other types of securities.

Tulsa Real Estate Fund Reddit

Another source of information or opinion about TREF is Reddit, which is a popular online platform where users can post, comment, vote, and discuss various topics in different communities called subreddits. There are several subredd its that are related to TREF or its topics, such as r/RealEstate, r/RealEstateInvesting, r/BlackInvestors, r/BlackOwnedBusiness, r/BlackWallStreet, and others. There are also some posts or comments about TREF or Morrison in other subreddits, such as r/Scams, r/PersonalFinance, r/Entrepreneur, and others.

On Reddit, users can find various perspectives and opinions about TREF or Morrison from different people who may have different backgrounds, experiences, or interests. Some of these perspectives and opinions may be positive, neutral, or negative, depending on the user’s viewpoint, bias, or agenda. Some of these perspectives and opinions may be based on facts, evidence, or logic, while others may be based on speculation, hearsay, or emotion. Some of these perspectives and opinions may be informative, helpful, or constructive, while others may be misleading, harmful, or destructive.

Therefore, it is important for investors and potential investors to be critical and discerning when reading or participating in Reddit discussions about TREF or Morrison. They should not take everything they read on Reddit at face value, but also verify the information and claims made by other users themselves. They should also be respectful and civil when interacting with other users on Reddit, and avoid engaging in arguments, insults, or personal attacks. They should also be aware of the rules and guidelines of each subreddit they visit or join, and follow them accordingly.

What is the Tulsa Real Estate Fund?

The Tulsa Real Estate Fund (TREF) is a crowdfunded real estate investment fund that was launched in 2018 by Jay Morrison, a former high school dropout, drug dealer, and three-time felon who turned his life around and became a successful real estate investor, entrepreneur, author, speaker, and activist. TREF is the first African-American owned Regulation A+ Tier II offering under the Securities and Exchange Commission (SEC), which means that it can raise up to $50 million from the public without going through the rigorous process of a traditional IPO. 

TREF allows both accredited and non-accredited investors to buy shares in the fund for as little as $500 and own a stake in a portfolio of real estate projects that aim to provide affordable housing, commercial spaces, and agricultural land for urban communities across the U.S. TREF also claims to offer a reasonable rate of return for its investors, as well as social and economic benefits for the communities it serves.

Who is the CEO of Tulsa Real Estate Fund?

The CEO of TREF is Jay Morrison, who is also the founder and chairman of the board of directors of TREF. Morrison is a self-made millionaire who has over 15 years of experience in real estate investing and development. He is also the founder and CEO of the Jay Morrison Academy, an online educational platform that teaches financial literacy and wealth building strategies to over 100,000 students worldwide. 

He is also the founder and president of the Jay Morrison Foundation, a nonprofit organization that provides financial education and mentorship to underserved communities. He is also the co-founder and chief visionary officer of the Legacy Center (also known as the Black House), a 30,000 square foot co-working space and business incubator in Atlanta that serves as the headquarters of TREF and other Black-owned businesses and organizations. He is also the author of several books, including Lord of My Land: 5 Steps to Homeownership;

 The Solution: How Africans in America Achieve Unity; Hip Hop 2 Homeowners: How WE Build Wealth in America; Two Homes One Childhood: A Parenting Plan to Last a Lifetime; and The Wake Up Call: Financial Inspiration Learned from 4:44 + A Step by Step Guide on How to Implement Each Financial Principle.

Is it good to invest in real estate funds?

Real estate funds are collective investment vehicles that pool money from multiple investors to invest in real estate properties or mortgages. Real estate funds can be classified into different types based on their structure , their strategy, their risk, and their return. Some of the common types of real estate funds are: Real estate investment trusts (REITs): These are companies that own, operate, or finance income-producing real estate properties, such as office buildings, shopping malls, hotels, apartments, or warehouses. 

REITs can be publicly traded or privately held, and they are required to distribute at least 90% of their taxable income to their shareholders as dividends. REITs offer investors the opportunity to earn regular income and capital appreciation from real estate without having to buy or manage the properties themselves. However, REITs are also subject to market fluctuations, interest rate changes, and regulatory risks. Real estate mutual funds: These are funds that invest in a diversified portfolio of REITs or real estate companies. 

Real estate mutual funds offer investors the benefit of diversification, professional management, and liquidity. However, real estate mutual funds also charge fees and expenses that may reduce their returns. Moreover, real estate mutual funds are not directly invested in real estate properties, but rather in the securities of real estate entities, which may not reflect the true value or performance of the underlying real estate assets. Real estate exchange-traded funds (ETFs): These are funds that trade on stock exchanges like stocks and track the performance of a specific index or sector of the real estate market. 

Real estate ETFs offer investors the advantage of low costs, high liquidity, and tax efficiency. However, real estate ETFs also have tracking errors, market risks, and trading costs that may affect their returns. Furthermore, real estate ETFs are not directly invested in real estate properties, but rather in the securities of real estate entities, which may not reflect the true value or performance of the underlying real estate assets. 

Real estate private equity funds: These are funds that raise capital from institutional or accredited investors and invest in private or non-listed real estate properties or projects. Real estate private equity funds offer investors the potential for high returns and value creation from opportunistic or value-added strategies. However, real estate private equity funds also have high fees, long lock-up periods, low liquidity, and high risk. Additionally, real estate private equity funds are not regulated or transparent, and they depend on the skill and reputation of the fund manager. 

Therefore, investing in real estate funds can be good or bad depending on the type of fund, the investor’s goals, risk tolerance, time horizon, and preferences. Investors should do their own research and due diligence before investing in any real estate fund and consult with a professional financial advisor if necessary.