Cost to Complete (CTC)
Over the last year we’ve experienced dramatic drops in the market along with failing banks, causing many construction loans to go into default. As such, Lenders have found themselves as holders of projects in varying stages of construction/completion and having to decide if the project should be completed, mothballed or sold. The Cost to Complete is a necessary tool when making that decision.
Foreclosing on partially completed Construction Projects is difficult. Here are some of the key questions a Cost to Complete will answer:
- What is the current condition and/or stage of construction?
- What will it cost to bring the project to substantial completion?
- How long will it take to complete construction?