Lessons Learned: Contractors and Friendships

Warning: This post comes from fresh emotions of disbelief, frustration, anger, and disappointment. The identities of the parties involved have not been disclosed so that they can take full responsibility for destroying their own reputations. (they’ll know who they are)

If you have done any kind of research on becoming a real estate investor or have even simply considered having some work done on your own house, then you’ve heard the horror stories related to contractors. We’ve heard all of the stories about contractors abandoning projects, taking the money and running, or spending way over budget; but we simply didn’t have to worry about any of those issues. We have a contractor that makes promises they will deliver, someone that won’t leave us hanging, and someone that will grow with us and our business. We have a friend that is a contractor. It’s going to be the best business relationship ever and we are going to take over the rehabbing world!

Well, that was the plan…

We were in the process of building a dream team. Our contractor was highly motivated. His energy and motivation was contagious and inspirational. We couldn’t wait to settle on a house and begin the demo process. The realtor that we were working with was the contractor’s girlfriend. She was also a very driven person seeking to catapult her career to new heights. The ambition that they brought to the table was a sure win. The cool part was that they were working to build a brand together like a wannabe Chip and Joanna Gaines couple. They have the cute kid to exploit in marketing gimmicks and even bought chickens. The perfect family to compliment the perfect business partnership.

Things started out with a bang. There was a ton of commotion and activity around the rehab as old fixtures and debris was being removed from the house. We would get excited every time that I’d stop by the job site to check out the progress. We have to admit, seeing the result after demo was a bit overwhelming trying to imagine how everything would be put back together again. That worry quickly subsided because, heck, I’ve got the best team looking out for our interests. I’ve got faith in them and we all benefit when the job is complete; the realtor gets the listing and commissions and the contractor agreed to a percentage of the profits, so of course it’s in all of our best interests to get the house rehabbed and on the market as soon as possible.

Until it’s not…

Not long after the demo was complete, there seemed to be a distraction or two. There had been some exterior improvements that really screamed progress. A new roof and siding transformed the curb appeal of the house and created quite a bit of excitement around the neighborhood. We were excited about the new look and could see the potential. We couldn’t wait to see how the improvements inside would turn out. While we were excited about the progress of the rehab, the contractor was increasingly excited about a new house that he was about to build for him, his girlfriend, and the cute kid. The contractor assured me that this would not impact the progress of the rehab since he is a professional and capable of managing multiple projects. Yeah right.

It’s still very painful to reflect on how naive we were to expect things to get better. We would drive to the job site weeks on end without any signs of life or progress. Repeated calls to our contractor would go unanswered. When the calls would be answered, we would get a line of excuses, promises, and revised timelines to completion. We would cut our losses and verbally agree with our contractor that the new timeline is what it is and swallow our frustration. This process happened over, and over, and over, and over again…

Trying not to live with regrets…

We regret not firing our contractor. We regret this decision every single day that work drags on at the rehab. Our weakness was doing what we felt was the right thing in helping a friend. After all, he helped to open our eyes the opportunities and excitement of rehabbing. He had already invested time and energy in the project and we still wanted to give him the share that we had agreed to. We offered to help find sub contractors to complete the work and got lip service that he was working on it and that he will be there to finish the job. We started talking with other contractors to see if they could provide guidance on how to go about getting things finished without our contractor “friend”. Throughout this entire endeavor, we never ever considered abandoning our agreement to give him the negotiated percentage of profit. We continued to look out for his interest in the project that he abandoned. It’s like we cared more about his share than he did.

Gah!!!!!

So this post could go on and on about the specific details of frustration and disappointment that we are facing, but it makes us sick to think about how ignorant our contractor has been that we are trying to complete this deal with some kind of profit. This is a job that should have taken 6 months, but has missed the deadline by almost a year. The optimist in us thinks that at least there is a benefit from a capital gains tax perspective, if there’s even a profit.

In the end, the worst part is being disappointed by the so called friends that we thought we would build our dreams with. Their loss. They have turned into nothing more than shysters. If they continue down the path that they are on then they are destined to have a run in with karma and a few terms like fraud and embezzlement.

We shouldn’t even care anymore…

Honestly, we just want to move on and still make good on all of our promises. However, the contractor expects to underdeliver, break all promises, go over time, go over budget, steal, and then ask for more money… haha!!

Fortunately, we have not let this experience deter us from our real estate endeavors and we are already wrapping up our next project with a new contractor with much more success. Subscribe to our blog to get notifications on our future posts and learn about what we have done differently to ensure that we have chosen a honest contractor. We personally recommend Hawk Rock Construction or Five-Star Contracting which serve Harrisburg, Pennsylvania and the surrounding areas.

** Oh yeah. I forgot to mention the ending of the business relationship with the realtor. She completely forgot about us until it was time to list the property so that she could cash in on a commission. She was simply too busy with building her own house and self indulgence to pick up the phone, even once in over a year! Even after giving her a chance for redemption and trying to come up with an amicable resolution, she was arrogant and ignorant to the end. Which reminds me… where’s the buyer that you said that you had? Oh wait, never mind. Don’t care. You’re fired.

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