All Forum Posts by: Ross Pino

 Thanks Todd this helps a ton!

Yes. 

Thanks for your response Frank, I obviously agree with the background search and references. As far as terminating him goes that Is my only option. In fact he is acting like he doesn't want to do any of the work now. I asked him for a cost difference over a week ago and he has failed to provide that to me. The HML is ticking which leaves me wanting to just sell the property and get out of it. After I terminate him and the house sell what should I be asking the Surety bond for? I mean at the minimum I am out $8,000 in closing cost origination fees and interest not including the obvious loss of profit which I don't expect to be compensated for.

Yes some of these indicators raise a red flag to an experienced flipper but I seemed to look over. The problem is the home is stationed in the historic district which required approval from planning and zoning before any permits can be issued. These people meet once a month and this was the initial delay with this project. Based off my conversation with planning and zoning if I hire a new contractor he must go through the same approval process meaning he it won't be approved until 10/10/20 and my loan matures on 1/1/21. I am typically the "glass half full" kind of guy but It is nearly impossible to be completed and sold in that short period of time. So are you saying not to waste my time with the surety bond?

Hello BP friends, I am a new investor in need of some advice. On my very first flip I found a Licensed and Bonded General contractor to rehab a house I had purchased. This guy came in and sold me from the beginning told me he could get the job done for $67,000.00. I went and obtained a HML to cover the cost for Reno keep in mind I purchased this house cash and owned free and clear. Before the contract was actually signed he ended up removing somethings saying that he miscalculated his cost and it would be more expensive than the $67,000.00 and we settled on a trade off of me and my father (an electrician) doing the electrical work if he did the rest for the $67,000.00 that I had already obtained the loan for. In our contract it states project would be completed in 60-75 days from date of the signed contract (6/26). Well from there it was excuse after excuse and he has barely even started work today marked day 75. In our latest meeting he is saying that when he signed the contract he was not Lead base paint certified but now is meaning he has to handle the exterior paint job differently adding cost and time to the job. Also in our last meeting he stated that cost of wood has gone up 10-25% and that he is unable to do the project without more cost for me. Per the contract it states "All work with material is guaranteed to be as specified in the work scope and will be completed in a skillful manner as required by the city code specifications." I interpret that as the cost of materials going up is not my problem. As far as the lead base paint goes, the scope says he will pressure wash and Apply two coats of paint to the exterior. So thats what he budgeted to do but now that he is lead base paint certified he knows he cannot get away with that and that the handling will cost far more. But again I believe this is not my problem and he needs to eat the loss according to the wording on the scope "completed in a skillful manner as required by the city code specifications." I know it sounds immature of me to not just pay the difference but the contractor refuses to give me a price difference. I seems like he just doesn't want to do the job.

Due to this major delay I am stuck. I don't have enough time to hire a new contractor, apply for permits, and sell the house within the rest of the 6 month loan. Causing me to miss out on $31,000 of profit as well as the cost of acquiring the loan that I otherwise would not have if I didn't hire him $8,000. Also other contractors are quoting me at $75,000 - $82,000 which is well over what he said he could do it for. 

I would like to add I have learned many valuable lessons from this and am not trying to take advantage of the situation. I did more research on this contractor and found many complaints on his prior companies as well as an arrest for fraudulent depositing bad checks (wish I would have found this out before I hired him). Anyway I went back and found the insurance documents he sent me before I hired him and found his surety bond company. I found out his surety bond is for $25,000.00 but i'm wondering if I should file a claim and if so what amount of money should I be asking for?

Thank you for reading and I look forward to your replies!