Successfully sued a handyman acting as a contractor

[Tim Lindstrom]

This isn't the normal success story, but I am remotivated (is that a word?) to dig in and continue my investing career.  About 7 months ago,  I bought a very distressed property, and hired a contractor to rehab it for me.

The original quote was $20k to replace the roof, rewire the whole house, replace flooring, new kitchen, and new windows.  After $22,500 in payments to the "contractor", the house was only half done,  and most of the work was subpar.  I let the contractor know all the issues that I had with the work that was completed, and rather than correct it,  he walked off the job.

I had $30K put aside to renovate this property, and now over 22K of it was gone.  I got quotes to finish the work, and all of them were over 20K.  

I took the contractor to court,  and during the process found out all kinds of interesting things that I should have checked before hiring him.  He did not have a contractors license (in Georgia, anyone doing work worth more than $2,500, must have a contractors license).  The electrical was done without a license.  The plumbing was supposed to be done by a licensed plumber (I didn't know that).

The judge awarded me $7,500.  We haggled back and forth over what value I received vs. what I payed.  Basically I got the house demoed, new roof, new gutters, misc. materials and other minor labor completed for $15k.  The rest of the money was for stuff that didn't get done,  or needed to be torn out.

It wasn't the $10k i was hoping to get back, but it is a win in my books.  The interesting thing is the court forced him to setup payment arrangements before he left.  They told me that if he misses even one payment,  I should contact the clerk of court, and they will file a FiFa and he will have to pay the full amount at once.  Everything I read thus far said even if I get a judgement,  good luck tying to collect.

Last month,  I was able to locate a partner who agreed to fund the completion of the project.  This was originally going to be a buy and hold deal, but the new plan is to finish it and flip it.  I will probably take about a 5K loss,  but I will come out the other end wiser.  The new partner will get her money back out, first, then I get paid, then if any is left over it gets split 50/50.  We plan to partner up on other projects after this one is in the rear view mirror.

[Tony Gunter]

Tim Lindstrom

Glad you at least won in court.

Did you ever think that price was too good to be true? That is a lot of work you outlined doing for only $20k. I am assuming that price was for labor and materials. That would be a big red flag to me as that is a ton of work, and any contractor doing the work would need to factor a profit in too. Just saying.