All Forum Posts by: Sam Peterson

I appreciate all of the advice. I'm not the type to go the route of litigation and I believe this house will have great results in the end. I believe hard work and time will result in sizable gains in equity and a beautiful home on the water. Thanks to all!

A couple of other details about this situation… we know that the previous owners replaced the roof a couple of years back. I'm new to metal roofs and didn't realize that it was installed without sheathing or moisture barrier until I was working to address a small roof leak. What I thought could be an easy fix, turns out to be the entire roof that sweats on the underside of the entire roof when it's cold out. This translates to moist insulation, mold and a ceiling that sags ever so slightly between the trusses. I chalked this up to the humidity of the area and a seldom visited vacation property that the thermostat is set to a warmer temperature. I was very wrong. Additionally, as we peeled the drywall back in the master bedroom, we saw a date stamp on the back of the Sheetrock (2020). Under the Sheetrock was where the mold was, along with 2 other layers of plywood and paneling. Also, there are wire connections that look like rat's nests in between walls in the master bathroom. This area also is a part of a remodel that took place under the previous owners occupancy. I have documented all of this. I spoke with a lawyer yesterday. I was told that $1500 would generate a letter that goes out to all parties. 60 days would be provided to sort out a resolution. If no resolution is achieved, then we would have to start with a $5,000 retainer for litigation. I'm still on the fence on whether or not this is the best use of my time and resources. I'm not trying to go after these people for a ton of money, but it would be nice to dampen the blow. I'm just trying to navigate through this the best I can. This is our primary residence at the moment. We are building an ADU in the back of our shop so we have a place to sleep while we tear the house down. I'm sure there's someone out there that has dealt with real estate litigation and could provide some insight.

We took the keys to our new lake house in early December. Before closing, we were able to perform several inspections (General, foundation, septic and plumbing) Unfortunately, nothing was going to prepare us for what happened in January. During a freeze that rolled through Texas, we had a copper pipe freeze and burst. As we began the process of opening up the walls to dry the house out, we began finding black, mold, termites, and metal roofing that was installed without sheathing or moisture barrier. I feel like we were so laser focused on the foundation issues and septic issues that we were unable to see other important issues that were not glaringly obvious, but we’re also not highlighted in the general inspection. After telling our story to so many people, it seems that legal action is what most are suggesting and may be a good way forward to reduce the financial impact. I’m wondering if anyone has any advice on this scenario. Thank you in advance.

We have now exited the crash pad model as it was too management intensive to maintain at a distance. After taking a new job, I find myself home far less and needed to simplify. The crew car was a bit aggravating as people routinely disrespected the rules and drove like maniacs. We would get toll charges and red light camera charges and nobody would own up to their mistakes. Everyone fought over who was responsible for gas and the insurance was outrageous. I was very happy to close up shop, sell all of the furniture, take my car back and renovate the house to place a nice family in the house. We are cash flowing quite nicely and I have far less stress. We are buying our third home in a few months and are currently renovating our second home, preparing for renters. The crash pad model was a great kick start but it certainly came with its challenges. But it put my wife through all her flight school without any debt and for that I am eternally grateful. 

Thanks for the details of your two properties Kevin. That was a great comparison run through. Time to put together a game plan. 

Thank you to all who replied. After some digging, I feel like the HELOC would likely be the preferred route for funding my next project. It looks like there are a few lenders that will lend a HELOC on a single family investment property, which previously I thought was not possible. Now it's time to do the ground work and start digging for a successful property makeover! Let me know your thoughts and opinions please. I'm glad I posted my idea. If you all hadn't spoken up, I wouldn't have thought to shift gears.

While discussing various strategies with another investor friend, I suggested that I'd like to do a 1031 exchange, taking my equity and rolling it into a smaller home to start my BRRRR endeavors. His advice was to hold my current property and continue acquiring single family homes with low money down for owner occupied and move around until I've maxed out my mortgaging capabilities. After insisting the BRRRR method was what I wanted to go after, he said he had friends that were unsuccessful with this in the Houston area. Does anyone have any experience with BRRRR in northern Houston? Spring, Humble, Atascocita? Any advice would be truly appreciated.

Come enjoy an evening with like minded investors at the Green Oaks Tavern. Looking forward to meeting some new and experienced investors!

Quote from @Tina Romeus:

Hello @Sam Peterson, how is your crash pad going?  I am starting to research the idea of starting one.  For analysis purposes, how do you determine the max number of people (max rental income) per month when offering hot beds? I've seen most have more crew members renting than the total number of beds in the house.

Each market is different. We didn’t offer hot beds because the market in Houston wouldn’t support it. You’ll have to do your research but there are websites that can help provide insite to other crashpads and their listings, such as crashpad411.com and crashpads.com. We utilized our knowledge of crash pads in our area and local property laws to help us reach our max number of occupants and earnings. We also found that it was difficult to find renters without also offering transportation. This business model requires a specific market close to airports that provide an airline crew member domiciles. You could likely mirror the model in other markets that require transient workers such as traveling nurses or those working in the oil and construction fields.

I currently have a 401(k) with my employer. It does not allow me to use the funds for the purpose of investing in real estate property.  i’m very close to changing employers, and they have the ability to discontinue the connection with my current employer within my current 401(k). My question is, does anyone know of a good quality 401(k) custodian that works well with real estate investors? With my change of employer, I believe I have a unique opportunity at this time to roll my money over into an investment custodian that will enable me to use my funds for real estate investment. I just need to know the best avenue to take at this point.