Renovation went wrong ?

[Sherif Kaissi]

I’m seeing some potential opportunities through a wholesaler,But I see and if there are some traces of someone who was renovating it and seems like they left it halfway does this mean trouble? should I jump in?

[Steve K.]

Partially completed projects can be an opportunity but there are some significant potential pitfalls to watch out for as well. In my experience when a project is half done, the part that is half done is often half-assed and needs to be redone, so really look into the quality of work that has been completed. 

Definitely look into the title as well. Partially completed projects often have multiple liens from contractors who never got paid. 

Find out how long it has been half-done. There were a ton of deals like this on the market following the mortgage crisis of 2008-2010 so it's possible it's been vacant that long, in which case it's probably been exposed to weather etc. and may be a teardown at this point. Certain places that were slow to recover from the last recession still have a lot of half-finished houses, and time has not been kind to them. There are a lot of these in places like Belize, Costa Rica, and the Caribbean Islands that are tempting but are ultimately too complicated to touch. 

Vandalism or theft of materials (copper pipes and wiring especially) can be an issue if it has been abandoned for a while, so check for any theft or damage that would be difficult to remedy.

Also look into whether or not permits were pulled/inspection benchmarks reached. Regulation compliance may be a mess so it's possible you'll be starting over again with the local planning department. Try to find out who the builder is/was, ask them if you can get the working plans and if there is any transferable warranty on the completed work (unlikely). Do as much due diligence as possible by consulting with architects/engineers, etc. A new architect/engineer can’t be expected to sign off on the work of someone else, especially if they’ve gone out of business, so they will possibly need to do more work reverse-engineering and creating plans based on what's been done, adding significant cost. 

Insurance and qualifying for a loan can be tricky as well.

Picking up a project mid-stream can be a great way to gain equity quickly if the price is right and the buyer is an experienced builder who knows what they're looking at, but definitely not a place for beginners.