Mar 31, 2025
When Jeff Klein and his wife, Rachel Shuler, envisioned their new basement accessory dwelling unit (ADU), they pictured a pace that could generate rental income or comfortably accommodate their aging parents during visits. They didn't foresee living indefinitely with open framing, exposed pipes, and a large pile of dirt Klein jokes would serve as a coffee table while watching television.
Klein and Shuler were enthusiastic when they first learned about a city of Boston program offering $50,000 in interest-free loans for ADU construction.
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"[Fifty thousand dollars] goes a long way on a project like this … it was really exciting" Klein told NBC 10.
The initiative is meant to address the affordable housing crisis in the city. After having an architect draw up the plans, they hired Derek Thomas of Incremental Developers LLC, after viewing his portfolio on his website. Construction began in January 2024 and went well for a while but abruptly halted after Klein and Shuler made a significant progress payment.
“It just stopped, I mean, it was so abrupt,” said Klein.
What went wrong with the project?
After paying $78,000 towards the $132,000 project, Klein and Shuler refused to pay more without seeing further progress. Thomas submitted an invoice to the city of Boston, but city officials withheld payment until specific tasks were completed. Then, in December 2024, a plumbing subcontractor arrived to reclaim tools and equipment, saying Thomas never paid for his work.
Realizing something was wrong, Klein reached out to NBC 10. The couple quickly discovered they weren't alone. Nil Silva and Sarah Fisher of Dorchester had a similar experience. Their ADU project stalled despite them spending over $100,000, leaving them angry and without resolution.
"Just ghosted," Fisher told NBC 10. "I feel overall angry and defeated that we still have no resolution to this at all."
Retired public school teacher Rosalba Solis faced similar frustrations. She described her experience with Thomas as "horrible," marked by lengthy delays and a complete breakdown in communication.
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Court and property records might offer insights into why these projects stalled. NBC 10 reporters found that in April 2023, Incremental Developers purchased a Salem property for $520,000 and secured a $527,000 mortgage. The property was renovated and converted into a multi-family residence featuring its own basement ADU. Thomas and his wife also purchased another Salem property for $715,000 in early 2023.
"It's really frustrating to know that he's just investing in his own properties, and we're just sitting here trying to pay out of our own pocket to scrape enough together to finish our project downstairs," said Fisher.
Thomas disputes these claims. In an email, he blamed the government for the slowdown.
"The permitting process in Boston is widely known to be unpredictable and slow, which often creates project delays, unexpected costs, and frustrated clients," Thomas wrote in an email in NBC 10. "Unfortunately, when city employees interfere with private contracts, rather than sticking to their intended role, it only makes these challenges worse."
The city of Boston, however, has taken action.
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"Based on the performance of this contractor, we would not approve him for funding in future projects." a city spokesperson told NBC 10.
Several homeowners have also filed complaints against Thomas with the Office of Consumer Affairs and Business Regulation. The outcome of those cases is pending.
Now, Klein and Shuler are paying additional funds to another contractor to finally complete their ADU, and they're hoping no one else loses money.
"We're just really grateful that you are doing these kinds of stories," Shuler said. "We don't want anybody taken advantage of the same way we were taken advantage of."
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Smart strategies for home renovations
Home renovations can be stressful — and worrying about shady contractors can make the process even more challenging. To avoid similar financial pitfalls, follow these tips.
Get multiple quotes
Always get detailed quotes from at least three different contractors. Compare not just pricing, but also timelines, reputation, and transparency about potential hidden costs. Asking for recommendations from friends or neighbors can be a good place to find trustworthy contractors.
Set aside a contingency fund
Unexpected costs and delays are typical in home renovations, especially in older homes. Experts recommend setting aside at least 5-10% of the total budget as a safety net for unexpected expenses.
Prioritize “must haves” over “nice to haves”
Focus your initial budget on essential items necessary to complete the project and ensure livability. If finances are tight, be flexible on luxury upgrades — these can always be added later when finances permit.
Explore your funding options — and make sure you understand them
Beyond personal savings, consider other financing options and how they will impact your financial situation. Home equity loans or renovation-specific mortgages can offer access to credit, but make sure you understand the terms and have the means to pay them back.
Look for local grant or loan programs, like Boston's ADU initiative. Some contractors may offer their own financing — but pay close attention to the terms, conditions, and interest rates to avoid surprises.
By taking these steps, homeowners can protect themselves from financial loss and ensure their renovation dreams become a reality. A little extra diligence upfront can prevent months — or even years — of frustration.
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Danielle is a personal finance writer based in Ohio. Her work has appeared in numerous publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love.
