All Forum Posts by: Aaron S.

Quote from @Jay Hinrichs:

also have you simply tried to contact the builder and make a request for repairs ??

or are you just assuming they wont help you and you will need to litigate etc. 

 I have not directly asked him to help pay for the repairs, no. He has been difficult to deal with in the past so I was presuming it would be pointless.

Quote from @John Mocker:

The Builder should have "General Liability" (bodily injury & property damage liability).  If you used an architect they may have copies of the coverage.  Also, if the Builder had to pull permits from the town, they may have had to show proof of insurance and that may be on file.  Some towns only look for the the proof of Workers Compensation but if they filed proof, it may lead you to who their insurance agent is.

The Builders Risk policy covered the property during construction for fire, theft, vandalism, etc. so it would not apply to these claims. 

 Ok cool. I asked who his insurance provider was and he gave me a name. 

Quote from @John Mocker:

Aaron,

If you have the info on who insured the Builder you could file a claim.  They will probably not cover redoing the poor workmanship but there may be some coverage for the ensuing damage (garage light repair).  

If you do not have their Insurance info have your Insurance agent send the Builder a certified letter indicating that you be making a claim against their insurance for the damage.  Indicate that, if they do not inform the insurance carrier of this, they are jeopardizing their coverage as the Insurance company will find out when you file suit or your Insurance company goes against their company in subrogation.  If there are only a couple of Agents in your area you could call around to see who insures them and send their agent a copy of the certified letteer.

 To be clear, I should ask for who his builder's insurance provider is?

We are in Tucson, AZ

We bought a new build in 2022, built by a local guy's LLC. We are outside of the standard build warranty, but are continuing to discover MAJOR corners cut, and getting repairs and pre-emptive fixes is costing us lot.

We are estimating $20,000 in total expenses that we are going out of pocket for due to poor workmanship. None of this was caught on the home inspection.

One example: we discovered a garage light not working. Inspecting revealed a water leak from the second floor, above the garage, that shorted the light. The cause of the leak is that when they built the shower, they tiled it incorrectly. Grout lines are paper thin, the tiles were not affixed properly and water has been going into the wall behind the shower for who knows how long. The sub floor was completely saturated. It cost us $3,000 to demo the shower and retile it. Restoration company, with a $500 deductible for home insurance, is drying and working on fixing tile that is water damaged, grout that has eroded, drywall that needs replaced, etc etc.

We have about a dozen examples of issues similar to this. Is it worth getting a real estate lawyer, sending a demand letter, going to small claims court, suing, or doing anything like that?

A contractor friend told me that it would not be worth it, and that we would likely never get that money back from the builder. A lost cause.

Thoughts?

Thanks everyone for your input. We read every response and discussed. This is what we decided to do:

-Keep MTR. Repair leak (in progress, finished by the end of next week. Est. $3,000-$3,500).

-Fix the other shower (same issues. Tile was laid improperly, grout lines are too thin, cut-out is slanted outward so water pools in the corner). Another $3,000-$3,5000

-Get another home inspection done and fix what needs to be fixed.

-Take a breath.

-Save an additional $40,000 over the next 8-10 months to put a down payment on our future primary residence.

That's it. We realized that tapping into our TSPs was foolish when considering our income. We can easily save up the money needed without eating rice and beans.

I am glad we got feedback on what to do here. I also talked to an investor I know and got some great feedback on the long term value of holding the MTR, versus selling it based on emotion and the sticker shock of a leak repair.

Quote from @Bruce Woodruff:

Quote from @Travis Timmons:

You make way too much money to not have any cash. There's always going to be another house with a bath tub and a view. Cut expenses, sell something, or do what you have to do to make your $275k income add up to a little more liquidity. 

 This ^^^ was my thought as well. That and the fact that either you are very unlucky or do not choose properties wisely....?

I would not base any financial or RE move based on a bathtub, you know how that sounds, right? :-)

My thoughts are: sell everything and start over. Even your units that are making $200/$500 are not really making enough to be happy about, right?

Just my $0.02.....

 Lesson learned on the MTR is to get a better home inspection done, and also we have a better eye for bad construction. Specifically, shower tile with grout missing, tiny thin grout lines, gaps in overhand coverage/not sealed, and the list goes on. The house was built by a local guy in 2022, not a reputable builder.

Quote from @Stephanie N.:

Hi Aaron, is the condo not going to cash flow because you'd hire a property manager? If so, I would consider going forward with your plan but self-managing the condo for now for the sake of cash flow. As rents grow (assuming this is in a good area where population and incomes are increasing), you can then bring in the property manager and cash flow.

 Yeah, if I cut out the PM it would maybe break even, but even still likely be negative after repairs. With a PM it would be definitely negative cash flow.

Quote from @Travis Timmons:

You make way too much money to not have any cash. There's always going to be another house with a bath tub and a view. Cut expenses, sell something, or do what you have to do to make your $275k income add up to a little more liquidity. 

 Hard to argue with that!

Quote from @Jonathan Bock:

@Aaron S.

Are you and your partner both planning to serve until you have access to your defined benefits? I'm going to make an assumption that you are not legacy but BRS.  

That's going to be way more impactful compared to anything else in this thread.   

Do you really want to be a direct real estate owner?  

I'm sticking to that bathtub and going to Lush on my way home before a great soak ha!! 

Sorry, I should have clarified. She is recently medically retired at age 28. Her VA + retirement benefits are $3500/mo and her new job is $85,000/yr. I have been separate for 12 years and am a civilian federal employee.