Made My First Rookie Mistake

OP

New to Real Estate · DALY CITY, CA · Member since 2019 · 24 posts · 9 votes

6y

Originally posted by @Ola Dantis:

@Stephanie Moran Not to worry many investors have made worse mistakes. Try not to beat yourself up too much.

In this situation, the best thing to do is to face the situation head-on and not to dodge text messages.

Most of these guys may not even have email addresses, but if he does, then send him a strong-worded letter and tell him straight: you are not paying him a penny!

Remind him that you had to spend more money to fix his mess and that you are in talks with lawyers and you do not want to go the court route, but you are very equipped with photos and documents. His choice, you guys path ways OR you do it the hard way of going to court.

You could send a text as well.

This should do the trick. It's all part of the story! REI is fascinating...!

Thank you Ola for your wise words, I am trying to come up with a quick, to the point, succinct text message I could send him to get the message across and not invite any further conversation.

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Stephanie Moran

OP

New to Real Estate · DALY CITY, CA · Member since 2019 · 24 posts · 9 votes

6y

Originally posted by @Bjorn Ahlblad:

@Stephanie Moran Love your line "basically the contractor has become like a crazy ex"! You are getting great advise. All the best! BTW most of us have made bigger rookie blunders, so don't fret.

Bjorn, haha! It really has become similar to a crazy ex situation—when one party is just not over things and the other plays the ignore game meanwhile the hurt party thinks the other is playing hard to get and just won’t let up haha. I’ve been on both sides before as the crazy and the ghosting party. Being totally ignored is maddening lol.

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Stephanie Moran

OP

New to Real Estate · DALY CITY, CA · Member since 2019 · 24 posts · 9 votes

6y

Originally posted by @Todd Rasmussen:

Originally posted by @Stephanie Moran:

Originally posted by @Todd Rasmussen:

@Stephanie Moran

What things needed to be corrected by the new contractor? What things were left undone?

I wouldn't show him all the documentation and photos right now. If he takes you to court, that's like sitting down to a game of poker where the other person has seen your cards. Just give him a list of the things he failed to do, or the things that he did wrong that you had to have redone and give him a number that you think he owes you.

Additionally in the letter, include a clause advising him that he is unwelcome to ever return to that or any other property owned by you. (This will help if he ever shows up at the house as you can prove he has been previously advised regarding 602(l) of the penal code (trespass).

Also, if you ever get to court, I'm guessing his claim will be thrown out immediately because he is unlicensed and you will get a chance at a counter claim.

Make sure you are reasonable in what you calculate your damages at. 20 days is not an unusual delay for any type of construction work and if your contract with him didn't have liquidated damages listed, I doubt you can get reimbursed on a per day basis.

What was the total original contract amount?

Hi Todd, I appreciate your time in listing out your suggestions, including the PC for trespassing.

The original contract was for $10,000. Plus, a HD giftcard with $2,000 for materials. I purchased all the large items: windows, flooring, appliances. He was paid 1/3 cash before beginning, plus the gift card for expenses. The major jobs were itemized on the contract and it was noted that all the miscellaneous details would be included. For example, the first major job was painting the entire interior for $3,000. It took over 3 wks plus it had to get redone because he didn’t sand the walls the first time. So 5-gallons of paint turned into 10-gallons. But, the job was done 90% satisfactorily, which that first payment covered.

Then there is the deck, Itemized at $2,200, has been paid because by the time the interior paint was done, I gave him a CC for another $3,333. According to him the deck only needed some band-o/caulking, and patching up any holes in wood, plus paint. He didn’t fix more than 8ft of about 200sq ft of deck. And he used a spray gun to paint it and asked me to purchase 10-gallons of paint because the $2,000 gift card had run out. The paint job was a total mess, there is paint sprayed over the siding of both adjacent houses, and then back side wasn’t painted. The cost to fix everything he didn’t do plus what he didn’t even know to fix because he isn’t licensed, is $4,000, and is being worked on as I type this.

we signed a start date of 09/10/19 and an end date of 10/10/19, he left the job or stated it was complete on 10/29 and 10/30, respectively.

So all in all, he wants the third installment which would be $3,333. Pricing all the mistakes, everything that is going to be redone, including the flooring which he messed up and still worked on after I told him not to touch it anymore—he ended up deciding to go out with a bang and stained my original wood floors with red oak. Plus we did a little addition of $75/day for the 20 days he went over since this property is meant to be rented out.

Per the neighbor who is a recluse, he’d show up alone everyday at 10am, 11am, sometimes noon, sometimes not at all, and while we didn’t set an agreed daily schedule, I’m sure his lax daily schedule contributed to going over by 20 days.

thanks again for your input, just typing all this out is really stress-relieving!

Thanks for clarifying everything. For my 9-5, I work for a contactor so might have been bias but I had some doubts from your initial posts.

So it sounds like you've paid $6,666 to the original guy plus $2,000 in direct purchase materials (kinda) and have paid $4,000 to finish/fix the original contract amount so I'm team stephanie.

Sounds like you made a quick recovery and your direct cost of this lesson is going to be pretty reasonable all things considered. Thanks for sharing, important to share the negatives as well.

Todd, thank you for holding me accountable and judging fairly. I genuinely went into this entire process with the best intentions, but of course without wanting to spend a ton, and certainly with zero desire to screw anyone out of their livelihood.

I think this original contractor is officially being unreasonable and honestly, he’s looking to get himself in trouble. I live near the state licensing board and thanks to everyone here on BP, I went this morning to pick up reading material and a complaint form to fill out.

From here on out, I don’t foresee myself ever trying to cut corners again and certainly never again hiring an unlicensed worker, or at least one who isn’t being supervised by a professional.

1 Reply

Stephanie Moran

OP

New to Real Estate · DALY CITY, CA · Member since 2019 · 24 posts · 9 votes

6y

Elliott, a scary buddy would have been my first option, but I just am so embarrassed to even involve anyone else. I’m no major feminist or anything, but I just feel like this guy had zero respect from day one because I’m a female, and now he thinks he will strong arm me into paying him? No. From the get-go I must admit I was really intimidated because this isn’t my world and I know a little but not enough, and so I kept quiet. I was nice about my first complaints, I kept it polite. Thanks to the new contractor, some conversations I’ve had in person with diff people and this community, I feel totally empowered and i just feel like my words should be enough. (However i may cave and track down a really scary guy—oak park, meadowview, mozzy type lol)

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Brian Ploszay

Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes

6y

My advice is probably contrary to most on this thread. Pay him, make him go away. Better yet, have your attorney negotiate a settlement, giving him a material portion of what he claims he is owed.

1 Reply

Tanner Marsey

Rental Property Investor · San Diego, CA · Member since 2017 · 439 posts · 578 votes

6y

1. Dodging calls/text will not do you any good and could result in the situation escalating. Be upfront, professional and firm with him. Save all texts, letters, emails etc....

2. This is your fault unless he claimed to be licensed. If you just agreed without doing your homework.... pay the man the money he is owed.

3. Just because he is unlicensed doesn’t mean the work is poor or done improperly.

4. I’m sure you’ve already figured it out but if it’s important to you that the work being done is by someone licensed, bonded and insured ask for that proof first thing. If they can’t furnish it... move along to the next one. Electrical, plumbing, roofing, HVAC.... I want the proper certifications. If you’re coming to lay floor and throw in baseboards.... not really a concern for me. Might bite me some day but so far, so good.

1 Reply

Stephanie Moran

OP

New to Real Estate · DALY CITY, CA · Member since 2019 · 24 posts · 9 votes

6y

Originally posted by @Brian Ploszay:

My advice is probably contrary to most on this thread. Pay him, make him go away. Better yet, have your attorney negotiate a settlement, giving him a material portion of what he claims he is owed.

Brian, I respect your suggestion, especially since it’s completely opposite of the popular vote within this thread thus far. Philosophically, I agree with you. However, do you think that even though there are actual tasks that were not even started, plus all of the corrections, plus going over the promised date of completion—that he is entitled to some monetary payment?

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Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

6y

@Stephanie Moran

>(However i may cave and track down a really scary guy—oak park, meadowview, mozzy type lol)

I realize you indicate LOL but I wanted to emphasize not to do this. It could escalate real fast into something real bad.

A local sports newscaster had a beef with his painter. The newscaster got shot I believe 11 times. This was for less than $3k in dispute. Miraculously, the news caster survived by a lot of luck. There was a law enforcement officer in the area who heard the shots and went to investigate. The officer knew the newscaster. The newscaster was still conscious and told the officer the assailant had fled. Without this information, they would have locked down the area prior to rescue service.

Assailant was convicted of attempted murder and two unrelated making criminal threats charges.

Do not assume everyone is stable.

Good luck

1 Reply

Brian Ploszay

Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes

6y

@Stephanie Moran There are reasons to fight and then there is my approach. My approach is not for everyone. I like to quickly extinguish potential bad relationships, potential lawsuits and get rid of bad contractors. These problems soak up a lot of time and mental energy. This guy might be vindictive.

If you have the resources, have an attorney reach out to him and attempt to settle. Saying full payment is not forthcoming because the work wasn't done. You're not licensed, so you don't get a chance to complete and you will lose any litigation because you're not licensed. Let the contractor make the offer for settling. He may take half after speaking to an attorney. He walks away from your life.

Your attorney may suggest a more aggressive approach, but I suggest a quick negotiated exit.

1 Reply

Stephanie Moran

OP

New to Real Estate · DALY CITY, CA · Member since 2019 · 24 posts · 9 votes

6y

Originally posted by @Dan H.:

@Stephanie Moran

>(However i may cave and track down a really scary guy—oak park, meadowview, mozzy type lol)

I realize you indicate LOL but I wanted to emphasize not to do this. It could escalate real fast into something real bad.

A local sports newscaster had a beef with his painter. The newscaster got shot I believe 11 times. This was for less than $3k in dispute. Miraculously, the news caster survived by a lot of luck. There was a law enforcement officer in the area who heard the shots and went to investigate. The officer knew the newscaster. The newscaster was still conscious and told the officer the assailant had fled. Without this information, they would have locked down the area prior to rescue service.

Assailant was convicted of attempted murder and two unrelated making criminal threats charges.

Do not assume everyone is stable.

Good luck

I was 100% kidding, I’d never do such a thing.

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Emily Di

Specialist · San Diego · Member since 2010 · 37 posts · 18 votes

6y

@Stephanie Moran, I know that feeling of being taken advantage of and if I can offer at least some perspective - you get a tax write off :) and once the place is rented and you're a few months down the road you won't think about it anymore. Better to learn this on 10k versus 100k so not too bad in the grand scheme of things. I'm aligned with @Tanner Marsey in that being unlicensed doesn't necessarily mean poor work. The flip side to that is I'm sure there are many in this forum that have had licensed contractors do poor jobs. I don't know how he represented himself (as licensed?) and I also don't know if he had a chance to correct things (ie - did he understand you wanted the paint redone). I've asked many a contractor to fix items that were done in a rush or not to my standard and I think you'll find that comes with the territory in a remodel. In terms of the deck, I suspect he based his itemization on the time/cost of the "bondo approach." Since he explained that was his plan, it's probably fair he be paid for it. While I realize the new contractor found other defects, I am assuming correcting those defects wasn't part of that original deck itemization. I am not one who likes to jump into legal battles so I would try to resolve what I can. Maybe you can negotiate over text messaging to an amount that seems fair to both you and to him (ie $1500) and pay it by venmo so you don't need to see him and then call it a day.

Something to think about for the future - you can set up a free Home Depot Pro account and link it to your phone number and email. When your contractor buys something they go through the contractor line/pro desk and you will get a call or a text to approve the purchase. You can disallow any tools, also, so they aren't buying a $500 saw. I do this and I get all the receipts to my email. I can look at it immediately and then call the contractor if I have a question about something they bought or if I notice they bought the wrong thing (there are photos) like wrong style lock or baseboard, etc. Also, all the purchases are tracked on my pro accounts which makes returns easy. Something to consider. I don't like gift cards for contractors. Too much room for abuse and harder to write things off on taxes.

2 Reply

Junior Soares

Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes

6y

Good afternoon Stephanie,

Do you have a signed contract with this unlicensed guy? I had one of my clients in the past have a similar situation with their previous stucco sub before hiring me. They unfortunately were forced to pay the unlicensed guy by the court because they had a signed proposal/contract with this guy. You may be able to fight it if they told you they were licensed and come to find out they weren't.

Best of luck to you with the remainder of your rennovation

Best,

Junior

1 Reply

John Teachout

Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes

6y

You've received a lot of suggestions to resolve your issue. I have a different take on things. Based on something you stated early on that you feel he actually owes YOU money due to not keeping schedule, staining floor when you didn't want him to, rework required, etc. I would go on the offense and let him know that you are going to pursue reimbursement for: x, x, and x. My guess is that he'll "disappear" and you'll not be hearing from him again.

2 Reply

Zana Blue

Investor · Saint Augustine, FL · Member since 2015 · 227 posts · 61 votes

6y

Here.. if there is a recorded notice of commencement... he can put a lien on your property...

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Curt Smith

Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes

6y

@Stephanie Moran he can and probably will file a mechanics lien on that house!

Find a lien waiver form, going forward always get one signed with a final payment.

I bet you'll end up Cutting a deal and getting a lien waiver. Too many comments ignore reality re liens.

Btw big tip, you can still sell and close even with a lien, tell closer to create a lien escrow were you'll put up the amount of the lien in escrw,,, lol then you'll cut a deal and get that lien removed....

1 Reply

Holden McCord

Rental Property Investor · Dallas, TX (dallas tx) · Member since 2019 · 15 posts · 32 votes

6y

@Stephanie Moran

Thanks for sharing your story. I now know to watch out for this when I get started.

1 Reply

Kyle Smith

Rental Property Investor · San Diego · Member since 2019 · 109 posts · 87 votes

6y

@Stephanie Moran GOOD! Mistakes are how we learn. Frankly, if you get through your first project with this as the only problem, you’ve done better than most.

I didn’t see whether this is your primary residence or not though? The post just says your first renovation. If it is your primary, I might be a little more cautions, and do what others have suggested (especially if this guy is unstable). I might add that you should install surveillance cameras in case he comes back and does damage to the property or threatens you etc.

In the end, you will make lots of other, more costly mistakes in this business. Learn from each experience and move on.

1 Reply

Stephanie Moran

OP

New to Real Estate · DALY CITY, CA · Member since 2019 · 24 posts · 9 votes

6y

@Tanner Marsey thanks for the tough love. I take accountability for my lack of homework up front. While this person has already made 7k cash + 2k gift card that I’m really not sure how the money was utilized (he has the receipts), he basically walked off the job and left several things unfinished or undone and they have now been completed and paid for. Unless he takes me to court and wins, at this point I do not plan on paying him.

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Stephanie Moran

OP

New to Real Estate · DALY CITY, CA · Member since 2019 · 24 posts · 9 votes

6y

@Emily Di thanks so much for your reply and great suggestions, they all seem completely brilliant and feasible! Will speak to attorney this wknd. And noting your suggestions for future work.

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Ola Dantis

Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes

6y

Originally posted by @Stephanie Moran:

Originally posted by @Ola Dantis:

@Stephanie Moran Not to worry many investors have made worse mistakes. Try not to beat yourself up too much.

In this situation, the best thing to do is to face the situation head-on and not to dodge text messages.

Most of these guys may not even have email addresses, but if he does, then send him a strong-worded letter and tell him straight: you are not paying him a penny!

Remind him that you had to spend more money to fix his mess and that you are in talks with lawyers and you do not want to go the court route, but you are very equipped with photos and documents. His choice, you guys path ways OR you do it the hard way of going to court.

You could send a text as well.

This should do the trick. It's all part of the story! REI is fascinating...!

Thank you Ola for your wise words, I am trying to come up with a quick, to the point, succinct text message I could send him to get the message across and not invite any further conversation.

PM me if you need to... Let's see if you can cook up something together!

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Account Closed

Rental Property Investor · Sacramento, CA · Member since 2015 · 1k+ posts · 893 votes

6y

@Stephanie Moran my business partner knows a couple guys from the view, 6200 lol!

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Rob B.

Chicago, IL · Member since 2018 · 546 posts · 227 votes

6y

Definitely file a complaint. This person was operating without a license and charged you over an amount that is restricted by state law. I'd also see what avenues you can pursue (namely, law enforcement) if he's now harassing you.

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Michael King

Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes

6y

@Stephanie Moran Went through a similar experience in 2015. Don't know if the contractor was unlicensed, but he didn't finish the work ($120K addition to my home), and started demanding the final $10K before the job was finished. I told him when the job (and faults) were completed he would receive his money.

Then he started threatening me with his lawyer 'friend' and liens. I called the court and found that for him to file a lien, he would have to swear an affidavit that the work was complete. I texted him and said something along the lines of "hey pal if you plan on making a sworn oath that you've finished the job so you can get a lien, I will sue you for everything you've got. I'm talking to my lawyer now." Never heard from the tool again.

He still cost me $50K when I sold that house due to shoddy workmanship and cover ups. So far, that has been my biggest real estate lesson.

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Account Closed

Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes

6y

Originally posted by @Stephanie Moran:

Hello All,

Renovating my first property and I made a rookie mistake, a major one--I found out that my first contractor (who came recommended) is unlicensed in California!!!

I am two weeks into redoing several of the original contractor's mistakes with a LICENSED contractor, referred by several homeowners/businesses. I have surpassed my budget, but alas, things are moving in the right direction and all the wrongs are being rectified.

I have spent a few hours perusing the CA State License Board website for FAQs or info on what to do when I've got the original unlicensed contractor pestering me via text for his final payment. Final payment for a job that was not fully completed, certainly not to my standard, no walk-through was ever done, and at this point, I am a bit scared that this person might physically confront me at the property seeking payment.

The property locks have been changed. I have photo, text, and detailed documentation of everything done incorrectly and incompletely, which my attorney states is plenty. But this person will just not go away!

When I crunch the numbers regarding what has to be/has been redone, the 20 days over the agreed-upon finish date this person went over--he actually owes me money! I'm just completely dodging his texts/calls at this point until I have all my photos printed and documentation completely in order. This person was paid 2/3 of the entire job, yes, I paid 1/3 cash up front rather than the 10% that I am seeing on the license board website. And I don't want anything from this person: not a dime, no repair, I just want to cut ties completely. I considered just paying him the final amount to get him out of my hair, but the only thing that stopped me is the fact that I am spending $12k to finish the entire job + clean up the original person's mess.

I also read somewhere online that it would actually be illegal for me to pay the final installment to the original person now that I know he is unlicensed.

I made a huge rookie costly mistake. Has anyone done anything this stupid? And what do you recommend I do? Get my attorney involved? File a formal complaint with the board (seems like this would even potentially implicate me for being so dumb in the first place)? Any websites of information recs?

Thanks in advance!

Spend a couple of hundred dollars and have an attorney send him a letter. Nip it in the bud.

1 Reply

Stephanie Moran

OP

New to Real Estate · DALY CITY, CA · Member since 2019 · 24 posts · 9 votes

6y

Originally posted by @John Teachout:

You've received a lot of suggestions to resolve your issue. I have a different take on things. Based on something you stated early on that you feel he actually owes YOU money due to not keeping schedule, staining floor when you didn't want him to, rework required, etc. I would go on the offense and let him know that you are going to pursue reimbursement for: x, x, and x. My guess is that he'll "disappear" and you'll not be hearing from him again.

Hi there, thanks for your reply! Attorney shared the same mind as you—create a list of everything done incorrectly, the cost to fix it, provide plenty of photos and video—all of which I have plenty of. Already contacted the CA state license board and was instructed to not speak to him at all, file the complaint and they will take care of it from here. Not sure if attorney plans on anything but will find out tomorrow.

Yes, we had a contract that I typed out and we both signed. However, this person essentially walked off the job by texting me that the following day would be his last, his work was complete, and wanted to be paid immediately. Um, sorry, doesn’t work like that for me.

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Made My First Rookie Mistake

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