My Beach House Investment

Recently, a few months ago, I found myself with a hard decision. I was told by a friend of the family who is a real estate agent in the Houston area about a beach house which was going to be foreclosed on and the people needed a quick out. I was told I needed to act fast and it would be a cash sale, no bidding, no competition, no crap, just come up with the cash now type deal. I had never thought of owning an actual beach house so the decision wasn’t as instant as one would think. I talked about it with my wife and we took a trip to Jamaica Beach in Galveston Texas to check it out. Needless to say, my wife fell in love with the idea. So much so that she invited her mother and baby sister into the deal. This concerned me at first but they were pretty easy to accept my terms of the investment arrangement. Rule #1 is I own the house, the house will be titled in my name only, and I am the only one that can make any decisions regarding the house or property. Rule #2 was that I would front $60K and each of them would fork over $10K a piece and my baby sister would also contribute $10K, bringing the total to the $90K needed to purchase the house out right. My mother-in-law, sister-in-law, and sister would split the property taxes each year, a $400.00 payment a piece, and the home owner’s insurance which runs right at $2,000.00 a year. Rule #3 is that I will do ANY and ALL work to the house (labor) and we will split the cost of materials four ways. Rule #4 is that if at any time one of them wants out of the deal I get the first opportunity to buy out their share plus 10%. Rule #5 is that at any given time I can sell the house and they are guaranteed at least their original investment of $10K. Rule #6 is that the utilities each month will be split 4 ways regardless of their use of the beach house. Rule #7 is that I am the only one with a set of keys and I set the schedule for the use of the beach house.
 
Everyone was happy with the deal and I had my lawyer do up a contract for each of us to sign. I collected the money and made the purchase. The sale went final about a month ago and it took my wife and I a couple of weekends to get the place cleaned up, utilities turned on, yard under control, and do some minor repairs inside and out. The house itself is in real great shape and looks as if it will be fairly easy to maintain. It is a 1130 sq. ft. home (living space) with 2 bedrooms, kitchen, living room, full bathroom with shower upstairs, mud bath downstairs inside the good sized storage area, a two sided deck, and the covered pad for parking and whatnot. Tell you the truth it reminds me of an over-garage apartment. For the most part everything is in decent shape, I will be re-doing the floors as many of the stick down tiles are loose, missing, or mismatched. So far, after the initial investment I haven’t had to put much more money into it. Plus, so far so good, nobody has had a problem helping with the bills.
This past weekend was the first real test for us with the house. Being the first weekend after school was out everyone thought it would be a perfect opportunity to have a family get together at the beach house. This get together included my wife and two kids, my mother-in-law and father-in law, my sister-in-law, and her husband and 3 kids. My father-in-law was only there Saturday and Sunday, I was only there Friday night thru Monday night, and the rest of the crew will return later Thursday night. It was fun but a small house fills up fast with that many people. I spent as much time as possible outside or on the beach itself. Luckily it only takes 5 minutes walking to be on the beach. Everybody around there has a golf cart to move around with ease so I suppose I need to look into finding one of those since I plan on being a beach bum as much as possible. In the beginning I was a little worried that I wouldn’t like this investment arrangement and I hope it continues to work out well. Hurricane season is upon us now so we will have to see how that works out. The great thing about this house is that it is in a neighborhood where 50%-60% of the people are year-round residents. We met some of our neighbors this weekend and for the most part they seem okay. Beach bums aren’t  too different from rednecks so we should all get along well.
 
While out to the beach my son had some extraordinary luck on this stretch of the beach. We went to the public access section which is sandwiched between other residential beaches where the houses actually over-look the beach and water. All in all tho, it is a pretty secluded area. My son broke out his metal detector and we set off walking early Saturday morning. After 3 hours of hiking, scouring, and digging, we decided it was time to head back to the house. As y’all can see my son took in quite a haul. I don’t think any of them are worth much, maybe the one on the end might be because it looks to be an engagement ring. He can’t wait to head the other direction and see how he can clean up. He really enjoys finding buried treasure.