Greetings Fellow Investors,
I wanted to share a recent experience that I hope will help both current and future investors alike.
I am an out of state investor that lives in San Diego. I have been purchasing buy and hold properties in Indianapolis for long term investments for the last few years. Some I hold onto, and others I flip.
I recently purchased a duplex in a class B neighborhood of Indy. My regular contractor , whom I know and trust, has been overwhelmed and unable to do the work. I reached out to my wholesaler that I have purchased multiple properties from, for contractor bids and suggestions. He gave the name of a contractor named CURTIS L. HANSEN with RENOWNED CONSTRUCTION LLC. Mr. Hansen, looked at the property, and gave me a scope of work with a bid of 30k. Reasonable for the work that needed to be completed. I did a background check and called 3 separate references from real estate professionals in the area that know Mr. Hansen on a personal level. One of them a real estate agent that has a reputation to protect. All 3 of them relayed to me what a hard worker and great contractor Mr. Hansen is...... I had a very direct conversation with my wholesaler in regards to how important this was that I don't get screwed and that this contractor is someone I can trust. Again.. he assured me that this guy has done multiple projects with his buyers and is 100% trustworthy.........I think you know where this is going.
We set a start date for construction and we talked about the funding. Typically, I set up draws of 50%, 25% and 25% at completion. I set my first draw directly from escrow in the amount of 15k.
CLUE #1. Mr. Hansen seemed to be anxious for the funds and asked when they would be wired. His excuse was he was eager to get started.
Construction began on October 16th 2017. On October 19th, I began asking for my first photos of work completed. He sent me a few photos of the demo and said he was getting ready to start with electrical and plumbing upgrades.
CLUE #2 Mr. Hansen started making excuses about the weather being too cold to work on the exterior, and technical issues with his phone and iPad so pictures could not be sent until later that night. This is when the RED FLAGS started flying.
CLUE #3 Mr. Hansen then called me saying that he discovered termite damage and the repair was going to add another 15k to the rehab. This guy was seriously trying to get me to send him more money. On top of that, one of the references that I received backed up his story saying that the repairs would be 15k to 20k more. I immediately told him to stop work and called my termite professional to check it out. As I expected, he told me swapping out a few 2x4's and a little work consisting of under $500 was all that was needed.
I pressed Mr. Hansen more and more each day for proof of expenditures and work completed. He started sending me pictures of jobs that were not mine and receipts for material that was purchased prior to my funds even being wired. At this point, It was obvious I was being taken advantage of. The question was, how much of my 15k was gone.
After a few more phone conversations and texts with the thief, He was no longer responding to me. I even tried to cut my losses and told him to keep 7k for a half days work of demo and return the other 8k. Still no response and gone is my 15k. Luckily, I do have an extensive text chain as evidence. What I can do with it, not sure. I know Indiana has a small claims limit of $8,000. And if I wanted to go to "big boy court" as one attorney labeled it, even if I won, I would most likely never see a dime.
As far as those recommendations. Make sure you know them well. All 3 of my references turned their back on me. I asked the wholesaler to split the loss with me in an effort to preserve future business. His response... "Take me to court"
Mr. Hansen is a fraud. My main point in writing this post today is to warn other investors to not use this guy and to please do your homework.
As of today, my regular contractor is on the job and is doing awesome. The project will be done in a couple of weeks. As far as Mr. Hansen, I have never heard back and he is most likely living on my 15k while looking for his next sucker.
As a sidenote, I did discover a great piece of software called phone view. I was able to download all of my texts and fraudulent pictures as a PDF from my phone. The cost was $29 for a one time purchase and was very user friendly and well organized. I have included the link below.
Phone View Link
I hope this information helps someone out there. For me? This was a $15,000 learning experience.
Mitch
