You might consider other strategies, like taking a home equity loan or refinancing to fund repairs, but consulting with a tax professional or CPA would be the best next step for your specific situation. 

@Rosmery ThenMy partner and I are in the same situation, just he has 20 years of construction and development experience.

Evaluate the situation to see if you could have done anything differently to mitigate the loss and implement changes to your processes, but know that this happens and hoepfully just not too close together. 

Paulette, it is good to call out these bad contractors and unfortunately you are caught in a bad situation on what to do, start by a small threat that you will contact the BBB and report a claim if he does not show some progress, or if you know an attorney, maybe a simple letter from one may get him worried and he may start showing up.

I have had previous requests for help with this situation, and that's the advice I consistently offer.

Lots of us are happy to offer suggestions but I think we need to understand your situation better.All the best!

I could be wrong or out of line, but I feel like this is a field where you really need some good expertise/experience to know how to address the variety of crazy situations that will come up.

Get a big downpayment so that the buyer doesn't end up in the same situation 5 years from now.

And if their both right or wrong-how to handle this situation?

In my situation if I’m earning $18,000 in cash flow from a property my tax benefits are offsetting at least that amount and I’m still paying $0 in taxes so the real estate scenario is attractive to me.