I need some serious help. I am new to real estate investing. I bought 2 homes from a wholeseller, one for a flip and one for a long-term rental. I went with a contractor they recommended and said other investors had used. Unfortunately, I did not do my own due diligence and I am in a horrible position. The contractor lied about being licensed, he went over budget by almost double. Took twice as long to finish. The flip just got listed and has below subpar work done. I had to fire him from the unfinished rental. I am out of state investor, so I really went with what he was suggesting and recommended in the beginning. With my long term rental, there's a detached garage, he suggested we turn into a ADU. He explained to me in Florida that nobody really gets permitting, so we should just do the work without permits. Obviously looking back now, I would do this differently but I was pretty naive & believed him since I had seen many homes for sale with unpermited ADUs in Florida on the market.. Now I fired him from the project and he is trying to get another $40,000 from me that is not legit. I've already paid $160,000 for rehab which was way more than the original $128,000 he quoted in the beginning. I started to look into the things he was billing me for, and there were lots of personal items like drinks and food. He charge to the project, he bought tons of tools, including saws and drills hammers paint guns. He bought 35 gallons of paint for a home that only needed 8 gallons 20 cabinets when he only installed 14. LOTS of fraudulent charges. When I confronted him that these were fraudulent charges and I wasn't going to pay, I told him if he kept harassing me, because he's calling me five times in a row at three in the morning telling me to give him his money, I was going to press charges and take him to court. He then said he was going to report me to the town for unpermitted work, that I had multiple violations that would result in fines, that would not allow me to refi and sale the properties and I would go bankrupt. That he would place liens on my property and it would ruin me. I AM AT A TOTAL LOSS. He is such a criminal and I don't know what to do. If he reports the violations, doesn't he have any responsibility because he did the work? Do I just pay him to make him go away, do I report him and let authorities know?? I'm in trouble here and just need some help from anyone who can help me!!
