I get asked all the time “where do I find good deals�? My response is always the same, “anywhere and everywhere�. I don’t say this flippantly either. I do believe investors need to be finding potential deals anywhere they possibly can and the more creative the better. It doesn’t hurt to dig around and ask questions and look into opportunities that might be a little off-the-beaten-path.
One such opportunity is with unfinished homes. Many unfinished homes are sitting on the market because the builders have run out of money or don’t want to spend any more money on a property they know they won’t be able to sell. While the note below mentions some obstacles you may encounter buying unfinished homes, it is nevertheless worthwhile to talk to the builders and see what opportunity may exist.
Unfinished Homes Can Be a Great Find
A small number of buyers are acquiring homes that the builder hasn’t completely finished so they can do the job themselves, and save money in the process.
For ambitious do-it-yourselfers, it sounds like a great deal. But finding an unfinished new home that a builder will sell isn’t as easy as it might sound, even though builders are awash in unsold inventory.
Builders say they’re reluctant to sell unfinished homes because it can be difficult to get an occupancy permit, even a temporary one, from a municipality unless the property is complete.
Plus, subcontractors likely will object to such an arrangement. There’s also the question of liability. Who’s responsible if the buyer gets hurt while working on the property?
Nonetheless, if you get this kind of request from a potential buyer, it doesn’t hurt to talk to the builder, says Don Augustin, vice president of Kenneth James Builders in the Chicago area.
“The way things are right now, you have to do above and beyond what you normally do because you don’t just want a house sitting there,” says Augustin.
Source: Chicago Tribune, Mary Ellen Podmolik (09/05/08)
Posted by Carter Brown
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