Sometimes finishing a construction project is harder than starting one.
Taking over an unfinished construction project sounds straightforward. Assess what's been completed, determine what remains, establish a budget, and get back to work. But what happens when much of the work that's already been completed wasn't done correctly?
That's exactly the situation we encountered when a lender engaged our team to take over two partially completed single-family homes in Denver. At first glance, the homes appeared to be well into construction. Cabinetry had been delivered, many of the finishes were installed, and significant progress had been made.
Unfortunately, as we began evaluating the work, we discovered that appearances were deceiving. The further we got into the project, the more problems we uncovered.
The problems beneath the surface
One of the first major issues involved the exterior metal siding. Because the homes were constructed on extremely tight lot lines, specific fire-rating requirements applied to portions of the exterior walls. The previous contractor had installed expensive metal siding without the required fire-rated assembly underneath.
The solution? Remove the siding, install the appropriate fire-rated materials, obtain the necessary inspections, and reinstall the siding. Unfortunately, not all the original material could be salvaged.
Inside the homes, the mechanical systems presented their own challenges. Furnaces had been installed without the clearances required by code, forcing us to remove them and rotate them 90 degrees before reinstalling them correctly.
Then there was the plumbing. We discovered numerous plumbing problems throughout both homes, including incomplete installations, defective work, and questionable decisions that required extensive investigation and correction.
Finding a plumber willing to take over someone else's problematic work proved surprisingly difficult. Several contractors declined the opportunity because they didn't want to assume responsibility for mistakes made by the previous plumbing contractor or general contractor. Ultimately, we worked with one of our established plumbing relationships to develop an indemnification arrangement that addressed those concerns and allowed the corrective work to move forward.
And those were just some of the problems. We discovered electrical boxes buried behind drywall, missing cabinetry, improperly sequenced finish work, and showers so narrow that they were impractical for an average-sized adult. One particularly memorable discovery was a plumbing drain terminating at the base of the stairs, directly in the main living space. We're still not entirely sure what the original plan was for that one.
Outside, we encountered another expensive construction sequencing mistake. Shoring piers between the homes had never been cut down before vertical construction began. What should have been relatively simple work with heavy machinery now required workers to manually chip away concrete and cut exposed rebar in an extremely constrained space.
A realistic path to completion
Every one of these problems represented additional time, money, and complexity. The real challenge wasn't simply completing the remaining construction. It was figuring out what we could trust, what needed to be investigated, and what had to be torn apart and rebuilt.
Our team systematically worked through the problems, coordinated the necessary corrective work, managed inspections, and established a realistic path to completion. Throughout the process, we had to balance the cost of correcting existing deficiencies against the lender's ultimate objective: recovering as much of its investment as possible.
As of September 2026, both homes are approximately three weeks from completion. Our next milestone is obtaining certificates of occupancy, after which we will bring both properties to market and manage the sales process. For the lender, that means two troubled construction projects are approaching the finish line and a potential exit.
For our team, the experience reinforces an important lesson about distressed construction. When you take over someone else's unfinished project, the most expensive work is often the work you thought was already finished. At NAKO, our job is to uncover those problems, develop practical solutions, and move stalled projects toward completion and financial recovery.