Hey guys, I want to share an interesting story with you, so newbies like myself remember to take extra care when selecting a contractor or anyone, really, for your team. My husband met this local contractor (let's call him Mike) at a showing of an MLS listing (Mike was showing on behalf of an owner). Coincidentally, we were looking for a contractor in that area for our first BRRRR, so my husband took him to our to-be-purchased property (under a contract) and got an estimate. He quoted much lower than other guys, said he was insured, and promised to show other projects he had worked on. We were back and forth with him for close to 3 weeks (all the due diligence period and more), creating SOW and contractor agreement (he didn't have any forms, so my husband had to sit down with him numerous times to create a detailed SOW and go over the specifics). Surprisingly, this guy was always available for these meetings - a rarity in the world contractors, who are always busy to pick up the phone, let alone to sit down for long meetings like that. We thought it was a bit strange, but who cares - his price was so good! What gave us real peace of mind was a meeting that took place at one of our rentals that was scheduled for the city inspection (and why waste time waiting for the inspector, when you can meet your contractor and discuss the SOW at the same time). The city inspector came in and immediately greeted Mike as an old acquaintance: "Heeeey man! How you been? You worked on this house?". Right away we knew this guy is golden if he has such rapport with the city inspection office! There was just one thing that was left to be done before we give him deposit - for Mike to send us a copy of his contractors license. My husband made a copy of the door key for him at Home Depot, so he wouldn't have to do that later, and we agreed to have the job started tomorrow, once he sends us a copy of the license and we pay the deposit. He looked a bit bummed that we wouldn't sign the contract and give him the check before he shows us his license, but promised to do that the same night.

That was the last time we saw Mike. We called a number of times, and he wouldn't pick up. After a week of calling, we figured the guy was unlicensed, decided to move on and called another contractor for an estimate. While he was working at the house on his estimate, a random guy showed up with some tools and said that his "landlord" rented this house to him and gave permission to store his tools at the garage (mind you, the property has no utilities and needs a complete rehab!) And who is this "landlord" who "rented" the place to him?... Yep, it's Mike! It turned out that the guy is currently renting from him and wanted to move, so Mike took him to our property like he's the owner, with the key we gave him, and told him that he can move in and work on this house while he lives there. Oh, and collected a deposit of $900 from the guy, too!!

We've been in touch with this guy, who filed a police report the same day we saw him. Since then we learned that Mike scammed another person by renting the second floor of our house. As if that's not enough, it turned out that the place that this guy was renting from Mike since November is not Mike's, as the actual owner (long-distance investor) showed up and was surprised to find an unknown tenant living at his investment property! The poor guy paid rent to Mike since November, thinking he is the landlord. Who knows how many more people were scammed by Mike this way! 

Lessons we learned: (1) don't trust an unknown contractor with access to the house before everything is verified and the contract is signed; 2) if the contractor's quote seems too good to be true, it probably is; 3) if you are a long-distance investor, have a team in place that can check on your property, or you may find a squatter living there next time you visit; 4) never give any money before everything is verified and the contract is signed (at least we were wise enough on this one!).

Do you have any stories like that for your rehabs?