Deal cash-flow question

[Adam Fenner]

Hey everyone, 

I've been binge-listening to the BiggerPockets podcast while trying to wrap my head around getting educated before my first deal. I tend to overdo it as an accountant. 

I have been trying to get my head wrapped around how the cash flow on hard money or private lending work on the front end: they cover the purchase at closing (after my down payment), but the rehab money usually stays held back and only comes out in draws as the work gets done. Which is reasonably a modest amount of paperwork. That makes total sense for the lender, but it leaves the investor having to front a good chunk of the repairs myself until reimbursement comes through.

For someone super cautious like me, that is something that needs to be planned for. Essentially negative tens of thousands (Closing fees, repairs) until after the deal, even if the deal has a solid closing return

How did you all manage this on your first (or early) flips? Did you use private money instead to get more flexible disbursement? Did you start smaller so the rehab budget was tiny? Or did you just grind it out by fronting the repairs and slowly building cash flow/credit as you went?

Appreciate any advice from those who've been there, trying to think this all the way through before I pull the trigger. 

Thanks in advance, Adam