Depending upon which section of the country you’d like to invest, you may run across an area that has an unusual inventory of unfinished homes. Half-built. Skeletons if you will. During the housing debacle, builders couldn’t keep pace with the demand and broke ground on new subdivisions just as fasttaking over a half-built home as they could get the permits.

But when the bottom dropped out it hit some new neighborhoods harder than others. In the case of new developments, there were homes that were started but never completed because the developer no longer had funding and prospective buyers vanished. What’s it like to buy an unfinished property, is there some opportunity for an investment?

It’s very likely you can buy a half-built home for a song as the bank has nothing it can really do with it. The plans have already been made, the foundation poured and the framing started. But now it’s a mix of boards, trusses and concrete. When a bank forecloses and repossesses a home currently under construction, everything stops. The bank is holding an asset that is difficult to market and buyers can’t get traditional financing in order to complete the project. At minimum a potential buyer will have to go to the bank, retrieve the plans and specs then obtain a construction loan to complete the build. That’s really out of the ordinary but so out of the ordinary that you might find an incredible bargain. The bank has few options in such an instance other than a tear down or waiting for someone to come and take up the project.

Along with your contractor and your appraiser and visit the property. Consider how much you can buy the project “as is” along with how much it will cost to complete. Your appraiser will then tell you what the home will be worth after completion in today’s market. You may find that the project has been left untouched and weathered for so long that a tear down is the only real option. On the other hand, if the home has solid bones and it passes your contractor’s test, it might be an amazing opportunity.