Beware-BAD Wholesaler and Realtor in Columbus Ohio!!!

[Gaby Liu]

I wanted to post my experience investing remotely in Columbus Ohio with an active wholesaler and realtor, Sara Elford, and her partner unlicensed Contractor Raymond Kemp.

Because the experience of only one person may be “he said she said”, I want to start off with some samples of the written Better Business Bureau response from one contractor in this rehab (“John”) who had experience with Sara across multiple projects:

“The key with this being Sara Elford was the contact for her projects and projects with numerous out-of-state investors.”

“Over a period of a year or so, her ( Sara Elford) contractor was receiving draws and using the monies on his own projects and leaving numerous projects sitting for lengthy amounts of time. Some of those projects are still sitting today, leaving investors without profit and incomplete projects”

“As time went by, we realized Sara was hiring non-licensed tradesmen, no credentials and performing an entire renovation without any permits.”

“Through the process of this, we realized that Sara was unsure of the proper ways to renovate a house.”

“Letting Sara Elford know that I had contacted various departments and she shouldn't be selling homes to people that are a fire hazard, structural hazards and/or just poorly constructed in most phases of all the construction performed on any project that she (Sara Elford), had involvement with. There was a very good reason her previous contractor left her in the dark on the construction side of the projects. “

With that in mind, here is my own experience with Sara Elford:

In October 2019, myself and my investor partner (“Darlene”) found Sara on biggerpockets.com. She promoted herself as a realtor/flipper/investor in Columbus, claiming to have many successful partnership deals with out of state investors.

At the next step, Sara introduced us to her “business partner” Ray Kemp, who she claimed was a licensed contractor. (We later determined that Ray was actually not licensed, had several civil lawsuits against him, and had apparently gone so far as to transfer the title of his home to avoid service and garnishments. In fact, when he pulled the permit for this house, he apparently falsely claimed to be the homeowner, as otherwise the permit would not be granted to an unlicensed contractor. )

The four of us (Ray, Sara, myself and Darlene) would partner on the deal, splitting the profits 3 ways: Sara 33%, Ray 33%, and Gaby and Darlene 33%. This would be true even though Ray would be paid as a normal routine contractor (time, materials, profit, etc) and Sara being paid as a wholesaler (in bringing the deal) and as a realtor (in the final sale of the deal). An experienced investor would not have agreed to such a profit split, but I did not realize this at the time. I believe this is just one of many ways Sara took advantage of me and my naiveté.

An ownership LLC ("OwnerLLC") was created for the project, with 99% ownership to myself and Darlene and 1% to Sara. At the time I hoped this would help hold her accountable, which obviously didn't help in the long run.

Ray and Sara already had their own partnership entity, Serk Investments.

Sara located a deal needing extensive rehab. The purchase price was 77k, and Ray estimated a 80k rehab estimate, and Sara estimated an ARV of 275k .

OwnerLLC purchased this house using a hard money lender, with a 20k down payment from Gaby and Darlene. OwnerLLC signed a JV with Serk Investments. The JV agreement stated that Gaby and Darlene would bring the money, and Sara and Ray would manage the project, with the profit split 3 ways as outlined above.

Between November 2019 and Feburary 2020, our lender released a total of 53,989 to Serk Investments. This was 85% of the total rehab budget.

In March 2020, 5 months later, Sara announced that the house had been barely renovated, that Serk Investments was going out of business, and that Ray and her were no longer working together.

Thus, five months had passed, and almost 54,000 of our borrowed funds were essentially embezzled, before Sara realized (or admitted) what was happening. I didn’t mention this before, but I live in California, thousands of miles away from the project. By our agreement, Sara was to manage the project locally, but obviously she completely dropped that ball.

At that time, Sara said we should dissolve the JV, and signed the JV termination papers.

In April 2020, Sara then brought a second contractor, John, on board. We signed a contract for 39,892 over a 3-phase project. Despite my desire to pay the contractor directly, Sara insisted that the funds be wired to her personal account and that she would pay the contractor. She said the contractor “doesn’t want to talk to us” and that its “her team” and that she is “managing the project.”

The contractor later raised his rehab estimate to $49,892. Between April and July 2020, we wired an additional $56,942 to Sara Elford.

Sometime around May 2020, John, the second contractor, quit at phase two. Sara blamed everything on John, and showed checks showing she had paid John the first two phases for approximately $29,000. I later posted a BBB complaint about John, and he submitted an extensive written response detailing this project and several others, across which Sara had repeatedly cut corners, used unlicensed electricians, ordered structurally dangerous alterations.

For example, when one of Sara’s other projects had outlets that weren't working correctly, Sara ordered him to cover the nonworking outlets with blank plates. Another project had a stop work order from the city due to an improper installation of a engineered laminated header through the main floor. Sara covered the header and sold the home.

Back to our rehab project. Sara hired a third contractor to finish the house, and at the end said that all funds from the $56,942 wire had been spent. She then announced that the home was complete and ready for list and sale.

By this time, our total investment in the project was $220k, and we listed at $275k.

In August 2020, we got an offer of $255, which we accepted. However, when the potential buyer sent us the inspection report, we learned that the rehab was incomplete and had very poor workmanship. Despite offering a 10k remedy (on top of the 20k price cut) the buyer terminated the contract due to there being so many issues.

Obviously, if Sara had even the basic amount of competence in a rehab project, she would have recognized the issues before allowing the home to go to market.

On September 8, 2020, Sara Elford quit the project, leaving us a huge mess. We had her sign off to give up the 1% ownership in OwnerLLC.

We then listed with a 2nd realtor, lowering the price to 259k, and spending an additional 4k on the nonworking AC and to repair a hole in the roof. Later, we lowered the price again to 249k. We had over 50 showings and most of the feedback was bad.

Eventually, a second buyer went into contract for 242k, but then also terminated the contract once they realized how poor the workmanship was.

On October 14th 2020, we had an acquaintance go to the home, taking full walk-thru videos and photos. It was my first time to see the true condition of the house at that level of detail. I was shocked!

The acquaintance suggested to pull the listing, that the workmanship was “horrible” and the work incomplete, despite the beautiful listing photos. He said the asking price was way off to deserve the listing price.

On October 15th 2020, we had a property manager walk the house to evaluate it as a rental. She too was shocked, sending many photos and also suggesting we pull our listing ASAP. There were just too many issues all over the place, too much incomplete, and we need to fix it before we list or rent.

Thus we pulled our listing that same day. Over the partnership with Sara Elford, we invested 230,000 across three different contractors, only to get a rehab so poorly executed that it wouldn’t even sell in a historically hot market.

Thus, obviously I wrote this up to warn the community against doing business with Sara Elford. I believe she took advantage of my remoteness and newness to suggest unfair profit sharing arrangements, has knowingly and repeatedly engaged in a pattern of hiring incompetent (and possibly outright fraudulent) contractors and performing unsafe and dangerous alterations to her flips, and is both negligent and incompetent at supervising renovation projects.

Throughout the entire project, she concealed all this information from me, never once letting me know how bad the project was. Either this was intentional or she just outright couldn’t recognize it.

Even worse, not only does her obvious incompetence and mismanagement affect my bottom line as an investor, but she also has exposed the buyers of her flips to severe risk due to knowingly concealing electrical and structural issues that are the result of her unlicensed work.

Thank you for reading.