My first real estate buy; gone wrong

[Natalie Mil]

Last year I was in Miami on holiday and thought I might try my hand at real estate.

I'm Australian and I heard other people from Australia and Canada doing well in US property.

I bought a duplex in North Miami which was a fixer-upper. I hired a builder who quoted $30,000 to repair the entire job.

We made up a contract whereby I would pay bit by bit on a weekly basis as repairs progressed. From the first week I had concerns about the way the contractor operated. He kept requesting more money upfront then what we had agreed on.

The building had been progressing for over a month with the builder sending me regular photo updates so I could see what was going on and I ended up paying around $23,000. After 6 weeks the contractor informed me he was nervous about building inspectors leaving him notes that he had no permits.

I was unaware that any permits were required and the builder told me that he was unlicensed and had not acquired permits so the whole project was very risky. At this point I told him I couldn't give him any more money.

Then the builder just up and left the whole job, leaving it like a construction site.

Shortly after I got a letter from the City if North Miami via the closing attorney who handled the sale, warning of fines for illegal building activity.

I contacted 2 other licensed building companies to go there to see about finishing off the job. They both said that everything that has been done is so bad and doesn't meet code requirements and needs to be ripped done.

I really do not know what to do from here. I just want to sell the property to get out of this situation.

Does anyone know if I can sue the original builder I hired or is it my fault for not checking his license and doing more background research?

I'd really appreciate any advice or help. This thing has caused me a great deal of stress and depression.

If anyone can recommend an agent in Miami/North Miami to sell the property for me, that would be appreciated too.

[Jay Hinrichs]

@Natalie Mil

here is what I would do.

I would contact a Real estate broker and explain the situation that you just want to get this property turned around then you want him or her to list it and sell it.. Offer to pay them a MUCH higher than normal commission on the list side ( example if full commission is 6% and they are a 50/50 split area. Offer the listing agent a full 6 % so their list side is double) but for doing that they will ( through their experience find you a quality licensed rehabber that won't rip you off) Many good agents have these people as part of their team. Then I would get it fixed and sell it. being a absentee landlord in AU is not like investing in an Annuity, your always going to have issues from maintenance to tenants to PM.. And if this situation is causing you this kind of stress then absentee land lording is probably not for you.

If you go shopping from AU looking for a contractor you are going to get bids that are probably going to be super high and you have no way of knowing if they are in line or not... You need someone on the ground in the market that knows what things cost that will help you with the bid process and selecting the contractor.

Once its put back together as stated above let the realtor sell it..

That is how I personally would get out of this deal.. Its going to cost you one way or the other. If you sell it now as is your probably going to take a big loss. But its still worth asking this agent your going to hire what it would bring as is right now.. You may be pleasantly surprised and you may just sell it now take your loss and move. But most likely your going to have to finish the project if you want to not take a massive financial loss and I would do what I described above.

Unless someone on this site wants to step up and do something for you pro bono I have done that for AU clients in the past but some where appreciative others were not and so other than a post on this site I would not go there again.

Lastly contrary to popular belief in AU lawyers and lawsuits over these types of things are very rare, as the dollars involved are not worth the price of litigating them. Especially against a non licensed person who probably has no assets and bad credit already etc etc.