Texas barndominium buyers find dream of country life at a good price has been a nightmare

The pilot episode of the History Channel’s “Blood Money” ends with a close-up of a cowboy boot stamping out a flaming document.

The paper is a contract between Zach Holt and his uncle, Teddy Moody. It states that Holt will receive a 25% stake in his uncle’s company, Stacker Trailers, if he successfully completes a custom trailer in 30 days.

But, mid-project, Holt got frustrated with the project and his uncle and left. At the agreed-upon deadline, Moody pulls a lighter out of his pocket and sets the contract on fire.

It wouldn’t be Holt’s last time abandoning a building project.

Five years after the episode aired, Holt, of Plano, is in trouble with customers all over the state who hired him to build barndominiums that he never completed.

A hybrid live-work space in a steel structure, the “barndominium” promises the dream of country life at a reasonable price. But a growing group of Texans are getting burned when builders like Holt abandon their projects and pocket thousands of dollars.

A Star-Telegram investigation found examples throughout the state of people left with half-built steel structures, drained bank accounts and no way to recover the money they spent.

The Star-Telegram spoke with nine customers of three Texas-based builders; their efforts to find legal remedies show that, in Texas, justice is the customer’s responsibility.

“As with any fad, anybody who thinks they can actually do it is going to take advantage of the marketplace,” said Sean McDonald, a construction attorney representing a Holt client.

The concept of a live-work space has been around for centuries, but the barndo aesthetic was popularized recently by Chip and Joanna Gaines of “Fixer Upper” fame.

Barndominiums further rose in popularity when the pandemic inspired homeowners to seek more space and remote working became widely available.

Customers in search of quiet country life have gravitated toward barndos recently, because they’re considered to be cheaper than building a regular home of the same size and can be built quickly. Some customers buy the building shell and complete the inside on their own.

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Between April 2019 and April 2023, the median home price in Fort Worth surged 48% from $226,000 to $336,000, according to data from the Greater Fort Worth Association of Realtors.

An average 1,200-square-foot barndominium costs about $150,000. (Not including the cost of the land.)

But building a barndominium requires going off the grid to some extent. Barndos aren’t typically permitted in cities, and banks don’t often offer financing for building a barndo.

These restrictions don’t just make it harder to build a barndominium; the limitations also remove critical oversight elements that are part of traditional residential building projects, like requirements imposed by a lender.

In the wild west of barndo building, customers have formed their own oversight mechanisms.

“Bad Barndo Builders” has nearly 8,000 members on Facebook. Members share stories and advice about their barndo-building experiences.

While this kind of activity happens all over the country, Texas seems to be a hot spot.

In the absence of oversight in Texas’ contracting industry as well as a legal system that makes this kind of theft hard to prosecute, customers whose builders pocketed cash and didn’t finish the work are taking justice into their own hands.

The ABCs of barndominiums

Charlet and Kamian Steele are empty-nesters; their barndo project symbolized a new era for the high school sweethearts who reconnected after 25 years.

The couple found the perfect piece of land about 15 minutes from downtown Greenville, a city of 30,000 about 50 miles northeast of Dallas. They spent days shaping up overgrowth and started fishing in their property’s pond.

Charlet Steele inherited a small sum when her father died.

“That was what I was using to build our dream home,” she said.

They planned to spend about $50,000 for the slab, frame, plumbing and the 2,000-square-foot home’s characteristic steel walls.

With the advice of a homebuilder neighbor, they’d do the rest themselves.

Depending on how elaborate your plans are, construction costs can run $100 to $300 a square foot.

Some are advertised like a home in a new development: “Five acres and a barndo shell can be yours for only $129,900,” reads an advertisement for Comanche Oaks, about 100 miles southwest of Fort Worth.

But, many clients already own the land for the barndominium and are only looking for a reputable builder.

Builders, like Colby Rank with Wakason-based 5 Starr Builder (which is accredited by the Better Business Bureau), provide just the shell, which includes the windows and doors. Then the client builds out the rest. The structure costs about $20 per square foot.

“Six or seven years ago, it just turned into one of the main things we do,” said Rank.

Addison-based R2G Barndominiums takes clients through the full process and might even help customers find land or figure out financing. This kind of service is going to cost at least $200 a square foot — or $400,000 for a 2,000-square-foot home.

The company’s luxury products were showcased at business networking event YTexas Summit 2022, which took place at AT&T Stadium.

“One of our biggest hurdles right now is pretty much the internet and what people are saying about barndominiums. … People thinking that it’s so much cheaper,” said Kip Milbern, project manager at R2G Barndominiums.

Unfinished jobs

Before signing a contract with Zach Holt, the Steeles called his references, spoke to mutual friends on Facebook and visited examples of his work, where the owners spoke highly of him.

“After talking to him and getting good reviews and seeing his work, we thought we had somebody good,” Charlet said.

The plan was to pour the concrete slab on Oct. 14, 2022, which was symbolic, because it’s Charlet’s father’s birthday.

First, Holt told the Steeles he had to delay the project, because his baby was born premature. The baby was in intensive care and needed surgery, Charlet said.

Holt finally poured the slab in January. Next, he promised steel that never arrived. When the Steeles requested the receipt, Holt quit responding to their calls.

“The hardest part is that not only does it look like we’re going to lose this money, but now I’ve kind of felt like I let my dad down,” Charlet said.

Holt did not respond to the Star-Telegram’s attempts to reach him on his cell phone. Some of his former customers trying to serve him papers haven’t been able to find him either.

Initially, the Steeles were understanding about Holt’s excuses.

“We kept asking, ‘Is everything OK? How is the baby doing? How are you doing?’” Charlet recalled. “We’re people, too. We know things happen.”

But after the ordeal, “I don’t even know if he had a baby or not.”

In total, the Steeles are out about $40,000. They don’t expect to see that money again. And, because both earn modest salaries working in the public school system, they don’t know when they’ll have the money to finish the project.

Because Kamian served in the military, they were able to purchase the land using a Veterans Affairs loan. But, the VA doesn’t offer financing for barndominiums, Charlet said.

Did Zach Holt scam you?

Holt disappeared when he was halfway done building Roger Copeland’s shop in Waxahachie, Copeland said.

Copeland suspected he wasn’t the only person who had this experience with Holt, and his hunch was right.

In November 2022, Copeland set up a Facebook group called “Did Zach Holt scam you?” In the group, members have shared their experiences working with Holt as well as their attempts to hold him accountable.

“Many of them even have photos of basically the same status that I was left at,” he said.

There’s Bud Patterson. He told the Star-Telegram he signed a contract with Holt in April 2022 to build a 40-by-70-foot metal building in Leander, about 30 miles north of Austin. Holt bailed after pouring a concrete slab and putting up framing, Patterson said.. At the beginning of the project, Holt said putting metal on the building would cost $11,000, Patterson said. He had to pay another builder nearly three times that to finish the project — including fixing what Holt did wrong. At the time, Patterson’s wife was undergoing breast cancer treatment.

And Jamie Madewell. She hired Holt to build a barndominium in Crowley big enough to take care of her disabled mother and her mother-in-law with cancer. After pouring the slab and partially framing the structure, Holt disappeared, Madewell said. She is out about $30,000.

And Adam Kolenc, who signed a contract with Holt to build a barndo in Kempner in April 2022. Holt poured the concrete and started to put up metal. Kolenc paid Holt $40,000; he completed about one-third of the job before he abandoned it, Kolenc said.

Holt would charge 40% upfront, 40% midway and 20% upon completion, multiple customers said. They report he did enough work to secure the second payment and then disappeared.

Online reviews of his business tell the same story. The Bizapedia profile for Holt’s business, Next Level Steel Buildings, has six reviews, all one-star ratings from frustrated customers alleging similar behavior.

As of July 19, Copeland’s Facebook group had 53 members.

Since 2013, Holt has faced at least 20 theft charges in Dallas, Rockwall and Hunt counties. He received probation and community service and was ordered to pay restitutions in Rockwall County, received magistrate warnings in Hunt and was given community service and ordered to pay restitution in a Dallas case. Jamie Madewell and another Holt customer Jennifer Gregston say they tried to sue him in small claims court but were unable to find his address to serve him papers.

Multiple people said they were turned away by their county district attorney, because the matter is civil, not criminal.

On July 25, the Titus County Sheriff’s Office posted on Facebook asking the public for help in locating Holt. The office has been investigating him after a Titus County property owner said they were defrauded by Holt.

“This is not a unique story. He’s not a unique person doing this,” said McDonald, the construction attorney.

On “Bad Barndo Builders,” there’s also a collective warning new customers about Cleveland-based builder Michael Bortz and his company Fireside Services, LLC.

Julia Swift said she and her husband are “camping” in their unfinished barndominium.

“I don’t even know that it will be finished when we die,” she said of the structure.

Bortz filed for Chapter 7 bankruptcy in Dec. 2022. According to his bankruptcy filing, he also owns New Start Properties, LLC.

When asked to comment, Bortz told the Star-Telegram: “You’re fishing for stuff. Don’t concern yourself over it. Julia Swift, she can go pack sand.”

A good builder is hard to find

Having worked in construction law for three decades, McDonald is familiar with the life cycle of new building trends. Barndominiums are no exception.

”Right now, that’s what people want,” he said. “If you don’t have millions of dollars to put into a huge ranch house, this is what you build.”

Patterson, the Holt customer, compares the phenomenon to a hail storm: “When a hail storm comes through Fort Worth, all of a sudden, everybody in town is a roofer.

“Anytime anything becomes super, super popular, that’s when the bottom feeders and the scammers swoop in,” he said.

But there are other elements at play making it easier for bad barndo builders to slip through the cracks in Texas.

Because the barndo-building trend exists outside the traditional home-building process, the same oversight that comes with construction of single-family homes does not apply.

For example, since most banks don’t finance barndominiums, many customers pay in cash. That removes the bank as an oversight mechanism.

In Texas, you need a specific license to work as a plumber, an electrician, an HVAC contractor and a landscape contractor. This makes these professionals responsive to a state board.

“Anybody who hires them and then has issues with them, you have some place to go complain,” said McDonald.

That’s not the case with builders or general contractors.

More than 30 states require general contractors to be licensed or registered at the state level. Texas does not.

As a result, the less legitimate of the profession operate as what McDonald calls “pick-up contractors.” They only have enough capital for one project at a time and are funding the current project with money from the next one.

“If you don’t have that next project coming down the pike, paying for the one you haven’t finished yet then you’re hosed. And everybody loses,” said McDonald.

Home building and improvement scams have always been a threat for consumers, but they increased during the pandemic when people were doing more home renovation projects, said Amy Razor, the former Fort Worth regional director with the Better Business Bureau.

“We find that supply shortages have also created an opportunity for scammers to use that as an excuse or a ‘selling point’ to try to fast track a deal, because they have the supplies on hand now, but they might not tomorrow,” Razor said.

Prior efforts to reform the state’s building industry were unsuccessful.

In 2003, then-Gov. Rick Perry helped create the Texas Residential Construction Commission with the stated mission of tamping down on unethical building practices. It registered builders and provided a process for resolving disputes between builders and customers.

But the commission was abolished in 2009 after a state report found only 12% of closed cases resulted in “satisfactory offers of repair or compensation.”

Former state Comptroller Carole Keeton Strayhorn even called it a “builder protection agency.”

From civil to criminal

It’s taken Angela Wakat more than three years to pursue justice against the barndo builder who abandoned her project after pouring a slab.

She’s gotten further than anyone among Texas’ “Bad Barndo Builders” advocates, and yet, she hasn’t recouped a dime of the $17,500 she lost.

Within the active Facebook group, Wakat frequently offers to assist others trying to pursue legal action against builders and updates the group on the details of her ongoing legal fight.

When she and her husband hired Michael Hurte of Texas Custom Barns, based in Santa Fe, to build their barndominium in Galveston in January 2020, they checked his references and visited other barndos he built. But he only poured a concrete slab, and that alone took a year, Wakat said.

She filed a case in small claims court. She got a judgment, but it was “pretty useless,” because Hurte never showed up, she told the Star-Telegram.

It’s tough to recover money in these situations, because “they’re taking people for an amount that doesn’t make economic sense to fight them and litigate over,” said Deirdre Brown, a bankruptcy attorney with Houston-based firm ForsheyProstok who brought a forced bankruptcy case against Hurte. Even if someone gets a judgment in small claims court, a builder’s assets are often exempt, she added.

One complaint to a district attorney or sheriff’s office is often treated as a civil dispute. To prove felony theft in Texas, it’s necessary to show intent to defraud.

“This is somewhat of a gray area of the law,” said Wayne Minor, an investigator with the Titus County Sheriff’s Office who is investigating Zach Holt.

“It’s my belief there are contractors out there that exploit that gray area and go into things with an intent to never complete the job.”

Wakat and her husband connected with another Hurte victim in the process of trying to track down their lumber order. That’s when Wakat went public: she papered Hurte’s Santa Fe neighborhood with fliers encouraging customers treated similarly to reach out to the Galveston County constable. Her effort was covered by FOX26 in Houston.

She said she ultimately found 81 people who say Hurte defrauded them.

“He got police, a preacher, school teachers. Not just run of the mill simple people. He got educated people,” she said. The fact that Hurte targeted elderly customers angers Wakat the most.

“But for Angela, he would not have been held accountable by anybody,” said Brown.

She organized the people whose experiences mirrored hers, which helped law enforcement demonstrate that Hurte’s behavior wasn’t an anomaly.

More than three years after Wakat hired him, Hurte faces involuntary bankruptcy as well as felony theft charges in Harris, Brazoria, Matagorda and Galveston counties.

For example, in Matagorda County, Hurte was indicted on charges of aggravated theft in April 2022. Shane and Lisa Russell say Hurte agreed to build them a barndominium but did not complete the project and stole $36,325 from them.

Matagorda County was only able to bring felony charges against Hurte after being able to establish a pattern of behavior, Detective Angelica Uvalle told ABC13 in Houston in July 2022.

Hurte did not respond to the Star-Telegram’s request for comment.

Wakat would like to see Hurte sent to prison, which would make it impossible for him to steal from others.

Reimbursement isn’t really an option.

According to legal documents, Hurte’s $850,000 home was seized in bankruptcy and sold. But the proceeds will probably just pay legal bills, Wakat said.

“Most of us have come to terms with the fact that we’re probably never going to get our money back,” she said.

While pursuing justice against Hurte, Wakat has another mission, too — reforming the system.

She’s been talking about reform in the “Bad Barndo Builders” Facebook group. She thinks it should be easier to recover money from builders who steal from customers.

“These guys know there’s no repercussions,” she said. “The laws need to change.”