New construction flip

[Dale Crawford]

I had an opportunity presented to me recently that I don't know where to begin to evaluate. I was walking my recently purchased duplex with my contractor whom I've known for 13 years. I asked him if he knew of any deals on other houses. He proceeded to tell me he's building a house in a newer subdivision and because of a conflict the person building the house is backing out. He has $150k in the ground and would offer the house to me at he cost because he wants to finish it. Depending how we decide to finish it the cost would be between $380k & $425k. The appraisal on the house to be built was $525k, so possible $100k difference. He says he needs $150k now for what he's got in it then we can finish however we want. How would you proceed? What kind of cash would I need to get a loan to finish it? Is it worth the risk for a newer investor? Thanks for your input.