Get out of hard money loan but not complete yet! Please help!
Hi everyone,
I am in a bit of a situation here and would appreciate all the help.
Me and my two partners found a great property that needed about 100k worth of work. Our ARV was about 300k-315k. Bought it at a good price with a hard money loan.
Started work on it with a contractor we thought we trusted and was good. At the beginning things went well but then the contractor stopped doing quality work and pushing back timelines and deadlines. We have paid a substantial amount already and the contractor is trying to double the budget. They had stated they have completed items and we went to check and they were not completed even though we paid for them. I got another contractor in to look at it and said a majority of the work was done wrong and would have to be redone. We will have to go into litigation and sue the contractor for over 50k of work not done. Please does any one have any advice on how this went.
2nd, We need to get out of this hard money loan. We are trying to figure our options. 1 option is to sell it as is to another flipper and have them complete it. We take a large loss though. 2 option is what I need your help on. I was thinking of having one of our partners buy the property from ourselves in possibly a 203k loan or some sort to get out of the hard money loan. Then finish the property in a longer timeline with a new contractor. Does anyone know if this is possible at all or have another solution? Thank you so much all the help is appreciated.