Selling a Rehab Before it's Done

[Alex T.]

Hi everyone. I am working on a SFR rehab right now, and I've been approached by two parties who have an interest in buying the property before it's finished. This is my third total gut flip, but I haven't considered selling anything pre-market, so I'm curious to hear everyone's thoughts. Right now, I'm around 40% done with framing. This is a big project, it's in an A+ location within my city, and we're adding over 1000sqft to the floorplan. I am probably 4-5 months from finishing. I'd like to avoid changing anything structurally so I don't have to redo the drawings and permits. What I'd be willing to do is frame it out completely and then let a buyer come in and customize the finishes. So here's my dilemma:

If I contract with a buyer for a certain price, I'd be absorbing a lot of risk for what could happen in the market over the next 4-5 months. I also like that I can work with a buyer and give them exactly what they want for finishing - I don't have to worry about making a bad design decision that isn't well-received by the market.

On the other hand, contractually, this seems complicated and risky. What happens if the buyer doesn't like the quality of the work? What happens if the buyer loses their job, needs to relocate, etc? I also worry about the fact that I'd essentially be working for the buyer.

Price-wise, I haven't gotten deep into conversations yet, but my guess is that I'd be able to get a slight premium to customize the house. Has anyone sold a rehab/new construction prior to finishing, and if so, what advice would you give me? Thanks