Advice needed: Fix & Flip nearing completion but draw schedule slowing progress

[Stephanie Fuentes]

Hi everyone,

I’m working on my first full renovation project in the Houston area and would appreciate advice from experienced investors who have been through this situation.

I used a hard money loan with a draw schedule for the rehab budget. The renovation has been progressing well, but some of the actual project costs have exceeded the allocated draw amounts for certain line items. There are still funds remaining in the rehab budget pool, but because of the draw structure I’m currently stuck waiting on reimbursements while additional work still needs to continue.

Here are the basic numbers:

• ARV: approximately $520,000

• Current loan balance: approximately $326,000

• Estimated remaining renovation cost: about $35,000–$40,000

The property has strong equity, and the remaining work is primarily finishing items needed to get the home ready for market.

My question for more experienced investors is:

How do you typically handle finishing capital gaps when the draw structure slows the project down?

Do most people:

• bring in a short-term private lender

• partner with another investor for the final funds

• renegotiate draw structures with the hard money lender

• or use another strategy?

I’d really appreciate hearing how others navigate this situation.

Thank you in advance for any guidance.

Stephanie

Houston, TX