What if the build period takes longer than 12 months?Jun 08, 2021
When you sign a contract with the Fourplex Investment Group, the builder is obligated to perform and deliver a certificate of occupancy within 12 months of you closing on your loan and starting construction. This means a rent ready unit(s) delivered within the 12 month contractual period.
What if they don't get it done in 12 months? Can that happen? Is that possible?
Yes, it's possible. It has/does happen and will continue to happen. When you're managing 200+ units in a subdivision with multiple subcontractors, delays do occur.
You have to have a flexible mind when it comes to real estate and new construction. But you shouldn't just have to take it, right?
That's why we've put a penalty in the contract. If FIG's builder takes longer than 12 months to deliver on your property, they are required to pay you a penalty of $500 a door per month. This makes it very motivating for them to get the units done on time because they don't want to be on the hook for that many penalties.
If you're investing in a FIG multifamily development, know that they're working toward a specific deadline and that you're not left completely on the hook. You'll have those penalties to fall back on and help carry that fourplex, duplex, or triplex a little bit further. If need be.