All Forum Posts by: Roland S.

@David Chapman Hey David, welcome to the real estate journey. Great move taking control after big tech’s ups and downs. My tip: start small, focus on cash flow, and network like crazy—folks here have goldmine advice. Consider diving into books like "Rich Dad Poor Dad" to shift your mindset, and don’t shy away from local meetups—they’re a must for building momentum. Network, network, network.

Post by Longhorn Funding on March 27, 2025

Weather can wreak havoc on a construction site, costing real estate investors, rehabbers, developers, and fix-and-flippers time and money. According to the National Oceanic and Atmospheric Administration (NOAA), weather-related delays cost the U.S. construction industry $4 billion annually. Don’t let storms derail your project—here are 5 strategies to weatherproof your site and keep your timeline and budget intact.

1. Secure Materials Against Wind and Rain
   High winds can scatter materials, and rain can ruin drywall or lumber. The American Society of Civil Engineers notes that winds over 40 mph can lift unsecured items.
   Action: Use heavy-duty tarps ($20-$50 each) and tie-downs to cover materials. Store smaller items in weatherproof containers or a locked shed to prevent theft and damage.
2. Implement Erosion Control Measures
   Heavy rain can wash away topsoil, leading to fines—EPA penalties for erosion violations start at $37,500/day.
   Action: Install silt fences ($2-$5/linear foot) around the site perimeter and seed temporary grass to stabilize soil. Schedule grading during dry seasons to minimize risk.
3. Protect Open Structures with Temporary Roofing
   Unfinished roofs leave interiors vulnerable to water damage, which can cost $5,000-$15,000 to repair.
   Action: Use temporary roofing systems like shrink-wrap or tarps (around $500 for a small site) to cover exposed areas. Ensure proper drainage to avoid pooling.
4. Plan for Flood Prevention
   FEMA reports that 20% of flood claims come from areas outside high-risk zones, so no site is immune.
   Action: Check FEMA flood maps (msc.fema.gov) to assess risk, then elevate critical equipment on blocks or pallets. Dig temporary drainage channels to redirect water away from the site.
5. Monitor Weather and Adjust Schedules
   Unexpected storms can halt work for days, with each delay costing $1,000-$5,000 in lost productivity for a small project.
   Action: Use apps like Weather Underground to track forecasts. Schedule weather-sensitive tasks—like concrete pouring—during clear windows, and have a backup plan for indoor work.

Takeaway: Weatherproofing your site isn’t just about protection—it’s about profitability. By planning ahead, you’ll avoid costly delays and keep your project on track. As a hard money lender we have seen it all so feel free to always reach out to us for any real estate project advice!

@Pixel Rogue When it comes to HOA disclosures, the answers can vary depending on state laws and the specific HOA's governing documents, so it's always a good idea to check those details. Here's a general breakdown based on common practices and legal standards:

A) Number of rentals or rental percentage: There’s no universal legal mandate requiring HOAs to proactively disclose the exact number or percentage of rentals in the community. However, some states, like Texas (under the Texas Property Code § 207.003), require HOAs to provide a "resale certificate" upon request, which might include information about rental restrictions or caps if they exist. This could indirectly hint at rental prevalence, but it’s not a direct count. Practically speaking, many HOAs track this internally (especially if they enforce rental limits), but they’re not always obligated to share it unless asked—or unless it’s part of their bylaws or a state-specific disclosure requirement. If this matters to you, request it directly from the HOA during your due diligence period. They might not have to provide it, but some will if pressed.

B) Ownership count/percentage (e.g., one party owning multiple units): Similarly, there’s no blanket legal obligation for HOAs to disclose ownership concentration upfront. That said, this info can sometimes be pieced together through public records (like county property ownership data) or inferred from the HOA’s records if they’re made available. In some states, like California (under the Davis-Stirling Act), homeowners can request access to the HOA’s membership list, which might reveal multiple units tied to one owner. But again, it’s not a standard disclosure unless the HOA’s rules or state law specifically require it. If you’re worried about an investor-heavy community, this is another question to raise with the HOA board or management—and cross-check with public records.

In both cases, your best bet is to review the HOA’s Covenants, Conditions, and Restrictions (CC&Rs), bylaws, and any state-mandated disclosure packets during the purchase process. If the HOA stonewalls you, that might be a red flag about transparency. Hope that helps!

Hi @Michell Chase that is extremely frustrating and sad that people are that way. Based on what you’ve shared, here’s where you might stand and some steps you could consider: Even without a signed written contract, you may still have a case for a breach of an oral or implied contract under New York law. Your consistent communication, the contractor’s scope of work prep, and their involvement with the lender suggest a mutual understanding that they’d take on the job. Courts can recognize verbal agreements or “partial performance” (like them preparing the budget) as evidence of a deal, especially since you’ve relied on their promises to your detriment—think loan interest piling up and lost rental income. You’ve got a paper trail of emails and texts, which is huge—those can back up your claim of an agreement and their failure to follow through. Here’s what you could do:

Send a Formal Demand Letter: Draft a concise email or certified letter summarizing the agreement (scope, budget, their role with the lender), how they’ve dropped the ball, and the damages you’re facing (e.g., loan costs, delays). Give them a firm deadline—like 7 days—to confirm they’ll start or formally back out. Mention you’re prepared to explore legal options if they don’t respond. This might jolt them into replying without escalating further yet.

Check Your Legal Recourse: In NY, you could potentially sue for breach of contract or “promissory estoppel” (where you relied on their promise and got burned). Damages might cover loan interest, lost profits, or costs to find a new contractor. Small claims court caps at $5,000, but for a $100k project, you’d likely need to go to a higher court—consult a local attorney to weigh costs vs. recovery.

Notify Your Lender: Loop them in ASAP. They might have processes to swap contractors, even if it’s a hassle. Delays hurt them too, so they could push the current contractor or help you pivot.

Plan for a New Contractor: I get it’s a small town, but start asking around—realtors, other investors, even online forums like Bigger Pockets might point you to someone. Worst case, you might need to look regionally and pay a premium to get this moving.

Legally, you’ve got some leverage to hold them accountable, especially with your documentation. A demand letter citing “breach of agreement” and “ongoing damages” could light a fire under them to at least give you a straight answer. If they ghost that too, a quick chat with a NY real estate or contract lawyer (many offer free consults) could clarify your next move. Hang in there—this is rough, but you’ve got options to push forward. I wish you all the best.

Turning a residential property into a commercial unit can unlock serious profit potential for real estate investors. Whether you’re a rehabber, developer, or fix-and-flipper, this move can boost cash flow & property value—sometimes by 20-50% more than residential rentals, according to 2023 National Association of Realtors data. Here’s how to make it happen:

1. Check Zoning Laws: Start with your local municipality’s zoning ordinance. Residential-to-commercial conversions often require a zoning variance or special use permit. For example, a property zoned R-1 (single-family residential) might need approval to shift to C-1 (commercial). Pro tip: Hire a zoning attorney to streamline this—costs typically range from $1,500-$3,000 but save headaches.
2. Assess Market Demand: Research what your area needs—retail, office space, or maybe a coffee shop? Use tools like CoStar or LoopNet to analyze commercial vacancy rates nearby. A 5-7% vacancy rate signals a strong market for new units.

3. Plan Renovations: Commercial spaces need wider doorways (ADA compliance), enhanced HVAC, and often separate utilities. Budget $50-$150 per square foot for upgrades, depending on the build—for a 1,500 sq ft home, that's $75,000-$225,000, so factor this into your ROI calc. Don't skimp on fire safety—sprinklers & extra exits might be mandatory, adding $5,000-$15,000. Hire a contractor familiar with commercial codes to avoid costly re-dos; their expertise can shave weeks off your timeline.

4. Market It Right: Once converted, list on commercial platforms like CREXi or pitch to local businesses. Highlight foot traffic or parking perks—tenants pay for convenience.

Real-World Win: A 2024 case study from Bigger Pockets showed a Dallas investor who flipped a 2,000 sq ft home into a retail space, spending $180,000 on reno and netting $15,000 monthly rent—triple the residential rate. With the right steps, your next project could be a goldmine.

🪠 Plumbing issues threatening your Real Estate project? These 3 Helpful & Actionable Strategies will save you time ⏱, money 💰, & headaches 😣!

https://longhorn-funding.com/pipe-dreams-to-profits-3-proven-fixes-for-unexpected-plumbing-woes

@Steven Prinster The key rule is that you need to reinvest all the net proceeds from the sale to fully defer the tax, and any cash you take out (called "boot") becomes taxable.Your $30k improvement to boost the sale price is a capital improvement, which typically gets added to the property’s adjusted basis (what you originally paid, plus improvements, minus depreciation). Let’s say your basis was $200k, and you added $30k in improvements—your new adjusted basis is $230k. If you sell for $280k, your capital gain is $50k ($280k - $230k). For a fully tax-deferred 1031, you’d need to reinvest the full $280k net proceeds into the replacement property, regardless of the $30k you put in, because that’s what you’re receiving from the sale.

Now, to your question: Can you pull that $30k back out? Technically, no—not without triggering some tax liability. If you only reinvest $250k of the $280k proceeds (to “recover” your $30k), the $30k you keep is considered boot and would be taxable, likely as part of your capital gain. The IRS doesn’t care that you recently spent that $30k; they look at the sale proceeds as a whole. So, if you want to keep the exchange fully tax-deferred, you’d need to roll the entire $280k into the replacement property.Here’s a potential workaround: If you have other cash on hand, you could use that to cover the $30k elsewhere in your finances after closing the exchange, effectively “replacing” what you spent without touching the sale proceeds. Another option is to structure the replacement property purchase so its value exceeds the $280k (e.g., $300k), putting in an extra $20k of your own money. That keeps the full proceeds reinvested while giving you flexibility later.I’ve seen investors in similar spots assume they can pull out improvement costs, only to get hit with a tax bill because they didn’t reinvest everything. Your agent’s right to defer to an accountant—since your specific basis, depreciation, and sale details matter—but generally, the 1031 rules are strict about reinvesting all proceeds. Chat with your accountant to confirm how your $30k fits into your basis and gain calculation, and double-check with your qualified intermediary (QI) to ensure the exchange docs align with your plan. Hope that helps.

Discovering mold mid-project? Here are 5 Actionable Steps to salvage your rehab, protect your profits, & keep your real estate deal alive—perfect for flippers, developers, and investors: https://longhorn-funding.com/from-mold-to-gold-rescue-your-r... 

Roland@Longhorn-Funding.com 

Permitting delays can turn a dream commercial reno into a nightmare for real estate investors. This short blog post breaks down 5 actionable steps: research local rules early, build relationships with permit offices, over-prepare your docs, plan for hiccups, and use tech to stay ahead. Did you know delays can add 6-12 months and 10-20% more in costs? Don’t let that happen to your next flip or development — preparation is key! Check out the full post on our website at Longhorn Funding.