05-02-2006, 10:58 PM
| | Need advice
I have been doing this for almost a year and a half now. I started out really well and bought about 6 properties in my first year. I had so many headaches rehabbing 3 of the houses with the contractor I was using so I started wholesaling until the houses were finished. My partner and I put 5 properties under contract in January and had 5 buyers who were working with 1 broker that came highly recommended. The broker told us that she knew of a hard money lender for all of the buyers. Needless to say she didn't know her brokers program after having pulled all buyers credit and having them to order appraisals we came to find out that in order to go through the lender (investwell) they had to have an established LLC in the state of Ohio (all the properties were in Ohio) which they didn't. The whole ordeal lasted for almost a month and then everything fell through. One particular seller was in foreclosure and when everything fell apart she had a couple days left. Since one of the buyers had ordered an appraisal I was able to get a copy of it and use it to get a private loan to buy the house and bail the lady out of foreclosure. We bought it for 18,000 the subject to appraisal is $79,000. We were recommended a contractor by another investor to do the rehab for $9,500. Well, this contractor did the first portion of the job - sent us pictures of the work done, I had someone go out to make sure the first portion was completed, and then we sent him the second draw. Since then he refuses to answer our calls, he took the house off of lock box, still has the key, and has gone over the amount of time allotted to finish the house. We sent him $8,000 so far. What can we do? We owe $18,000 to the lender plus interest. We had a buyer for the property after it was done being rehabbed but we can't sell it to them now because the contractor has skipped out. I live in CA and this in Ohio. What in the world can we do? I do have another rental property I can sell off to give the lender their money but so far we haven't
been able to sell it. Is there any advice on this situation? Anyone gone through this before?