All Forum Posts by: Christopher Hile

Hello everyone, 

I am hoping to get some recommendations and/or some advice on a situation I am currently faced with.  I am going to try and concisely explain what happened.  About two years ago I purchased a home damaged by a fire to rehab and flip.  I hired a contractor who was recommended to me from the agency who sold me the home.  I hired him and we began the process with permits and such.  The estimate rehab budget was $133K and I gave him roughly $30K to start for various deposits (Roofer, Windows, Framing, Etc). Months had gone by and no work was being done and he kept blaming the city for staling the permit, which I later found out was not true.  As things unraveled I learned that he was not in fact a GC at all and was using someone else's contractor number to file for the permit and such.  Fast forward to present time, I never got to complete the house and lost over $200K on the deal.  I filed a complaint with Department of Business Regulations as well as reported him to the Florida Licensing board.  They did their investigation and their conclusion was that I was correct in my allegations and they saddled him with only a $6,000 fine.  They will not assist me in recouping any money I have lost.  So, now almost two years later, I've had to close my flipping business because I can not seem to recover from this loss.  I have spoken to a couple of attorneys but they all want retainers of $10-20K, which if I was guaranteed a settlement I would gladly pay, but I understand that is not how it works.  Does anyone have any advice as to what I should or could do know to get some of the money back that I lost?  I looked into the Real Estate fund as well, and because he was an UN-licensed contractor, I can not apply for it.  Am I just screwed here or is there a way I can come out on top with this situation? 

Thanks Bruce. Is there a benefit for paying them out of the LLC tax wise or any other benefit?

Is there a benefit, tax wise or other, for paying all renovation costs to the contractor including materials through an LLC for real estate investing? Or is it more beneficial to pay personally and direct to the contractor?