I bought my first home, only to become a victim of predatory remodeling.

This is the story of how I got tricked by malicious criminals into purchasing a home that was riddled with code violations and faulty, unsafe conditions. The house flippers were not licensed contractors, and no building permits were pulled. There was no paper trail, and no way for my house inspector to detect the multitude of problems that were cleverly hidden behind beautifully finished drywall, concrete, and woodwork. Richard Wu commits real estate fraud!

In The News
Remodeling Magazine
Sun Focus Newspaper

Month 7 - Roofing Code Violations

While trying to manage the overgrown lawn in the summer, we discovered roofing shingles strewn about the lawn, killing the sod beneath them.

Without a building permit, the flipper hid roofing problems beneath new shingles, and then simply threw the old shingles into the back yard. We found hundreds of them, every time we did yard work.

Specifically, a large section of new roof sheathing overlapped older, damaged sheathing. Portions of the original sheathing were rotted and caved-in, with its original shingles still visible from the underside!

Additionally, the flipper plugged the eves with construction debris and insulation, and damaged a ventilation chute that cut off airflow to the attic.

When winter came, ice dams formed on the western roof line...

... and water began leaking through the bedroom ceiling!

The damage continued to get worse as melt water seeped in faster and faster...

...until it was steadily streaming into the house.

The shingles were badly damaged from the ice dams.

Inside, demolition of the bedroom soffit revealed that it had been stuffed with insulation, plugging up the eves. The lack of cold air flow to the attic promoted the ice dams.

This date stamp on the new sheathing proved that this was recent work, completed shortly before the home went on the market in late 2012, and only a few months before I bought it. No permit was ever pulled for this work.

Similarly, this date stamp on some installed carpet padding shows that it was manufactured on December 27, 2012... less than 5 months before I purchased the home.

Additionally, an online description of the property fully admits that the house had a new roof, new windows, new floors, new appliances, and new paint... all of which have documented problems. Again, no permits were ever pulled for remodeling work on the property.

17 Months After Purchase

After working with multiple litigators, we have learned that our real estate laws are set up to favor the sale itself and ensure that a transaction takes place, but they offer no real protection for home buyers. Although we have the option to sue the flipper for real estate fraud, attorney fees are estimated between $30,000-$50,000, and a successful outcome is extremely unlikely. Even if we had these funds available, they might be better spent simply repairing the house.

A family friend started a GoFundMe campaign to help raise support for our massive repair costs estimated between $70,000 and $100,000.

Fighting Predatory Remodeling

Since there seems to be little hope for recourse, I am now committed to fighting real estate fraud by strengthening our laws at every level of government to ensure that no one becomes a victim of predatory remodeling ever again.

In the United States, there are examples of federal, state, and local laws that are designed to prevent predatory remodeling and provide recourse for victims. Unfortunately, many of these laws have been suspended in an effort to revive the housing market from the recession, or they are simply deemed not critical to some cities and states. This means that opportunistic real estate investors can still make use of these loopholes, and new home buyers can still become victims.

My goals are:

  • Educate and warn new home buyers about predatory remodeling.
  • Work with local officials to adopt a Property Maintenance program with Point of Sale Inspections for single family homes.
  • Work with state officials to adopt a resolution requiring real estate flippers to be licensed general contractors. This gives victims access to the Contractor Recovery Fund.
  • Work with federal officials to reinstate laws that deny real estate flippers access to federal housing loans.

How You Can Help

  1. Please consider sharing this blog to educate others.
  2. If you have been a victim of predatory remodeling, please email us your story. The more information we have about this widespread problem, the more reasons lawmakers have to adopt solutions.
  3. Be vigilant about construction projects in your neighborhood, and immediately notify your city building inspector of any projects that do not have a permit clearly posted.
  4. If you are interested in Columbia Heights, MN please consider signing this petition.

My family and I thank you for your continued support through our ordeal. We may never see justice, but we are using this experience to fuel our resolve and keep new home buyers safe from predatory remodeling.

About the Author

Frost Simula purchased his first house in Columbia Heights, Minnesota in May of 2013. When it became clear that the Seller had committed real estate fraud, Frost began documenting the nightmare of hidden building code violations, the struggle to save the property from condemnation, and the ongoing ordeal to find justice. An active citizen in his community, Frost is currently working with local, county, and state lawmakers to ensure that nobody becomes a victim of predatory remodeling again. Frost is frequently featured in the media, and maintains his Hoodwinked House website to educate the public about real estate fraud.