The commercial property industry can be volatile at times. Funding can fall through, the economy might have issues, or investors might pull out. Whatever the reason, construction projects can come to a stop, leaving an unfinished construction site for someone to buy and finish. These kinds of property are generally sold cheap to unload the financial burden of the holding company. It might seem like a good chance to snatch up some high dollar property for pennies on the dollar, but it’s best to proceed with extra caution. 

Anytime you take over a half-finished construction project, the risk of unforeseen variables negatively affecting the timeline and budget goes way up. To avoid these pitfalls, ask yourself these questions before buying an unfinished property.

  1. How far along was the project and how much work needs to be done?
  2. Does any of the work that was completed need to be redone?
  3. What, if anything, do you want to change about the direction of the project?
  4. Does the property come with any lawsuits, loans, or other liabilities?
  5. Was the past owner insured?
  6. Will insurance cover any of the construction issues?
  7. Will the insurance still apply if the original owner has gone bankrupt?

Dealing with the past insurance policy can get a little tricky. There’s lots of confusing legal minutia that can make it hard to get the ball rolling again, so make sure you’re working with a real estate broker that knows what they’re doing.

The initial inspection to assess the condition of the project will be critical to making your final decision. Odds are there will be a lot of data to go through and interpret, which is where we can help. Once the inspection finds all the problems, we can estimate what it will cost to finish the project. Buying an unfinished property will always come with some risks, but when you partner with the right contractor, much of this risk can be avoided.