HELP PLS!!! My first rehab is turning in to nightmare
Hi my name is Patricia, I recently bought my first for property for rehab,June 7 in Winston-Salem. Was partnering with a General Contractor that talked to me into. The deal was the I was going to buy the house and he will take care of the rehab, with labor and material. And the we were going to splint the profit from the cash out and continue to do.
We actually went and even open a LLC together.
He started taking walks out and telling we’re the bathrooms were going to be and all the changes.
In week 2 I didn’t see any progress they where just taking the trash out from demolition. Then he said that he didn’t want to do the partnering anymore bc he need to work with his credit first and he still wanted to do work in the house but with a official contract from his company.
Again I believe. He asked for 30% down of $59.000 Which I gave, but still there is no progress and I don’t see any materials. I Iive in Apex which is 1.5 hrs away and go to Winston every week. I keep asking him about the progress and he comes with different stories.
so this week which is week 6. I said that I wanted to be present when inspection comes. He told that I need to get permit my as a owner for the talking down the walls before electrician and plumbing come to do their work. I was soo suprised bc I have no experience with this but that I know that you need get permits when starting to make changes to the house.
so anyway inspection came and put stopped on the project. I explained to inspector in the phone what’s going on and he said that he supposed to get permits in order to continue. Contractor said he is not doing it.
Pls help me and advise me what to do,,I feel so stupid in trusting him and that I made a big mistake. I will like to talk to someone with experience so they can guide me on having the project finish with all the legal permits but with out loosing to much money and most important what do I do with this person that is trying to take advantage. Pls help me. Will appreciate.
1) Since you started an LLC together, how much did each of you invest THROUGH the LLC?
2) What does the LLC state as far as liability of each party and who is responsible for what? Did you have a contract stating he would do the rehab after you bought the house? Hopefully you bought it through the LLC.
3) At this point, you need to stop putting any of your personal funds into the LLC.
4) Is he a state licensed contractor? If so, the fact that he tore out walls and did other things without a permit would be grounds to file with the State and the Builders Group (do you need the details on what this entails in NC?)
5) At this point, selling the property to another flipper might be the best option but again, stop all work and payments
6) You should contact a real estate attorney in your area - there may be one here that can help you or at least now what they can do and what the cost is.
Feel free to post details on the property and see if the group here can look at it and see what the numbers look like.
#1 All Forums Contributor
- Investor
- Virginia
@Patricia Mendoza
He took your money and ran with it. Get an attorney, default the contractor, sell the house and move on.
You will most likely take a significant loss, but in many instances people will not want to let go and it ends up costing them more In the long run
Sorry you have to go through with this as it sucks when dealing with people like this which is why I always tell people never ever partner with your GC.
Id first complain to your states attorney general regarding the GC fraud. They will follow up with the company and its free online.