Hard Money Lender that offers intial construction draw advance?

Question

Has anyone worked with any Hard Money Lenders that are able to offer a construction loan advance/pre-construction draw? Basically not looking to come out of pocket before getting reimbursed. I currently work with one outfit that does this. Looking for more options. I do flips in CA if that information helps.

Marty Johnston · Answer

Account Closed There are certainly options out there! Is increased leverage your primary goal/lowering closing costs at close or is it just the upfront draw in itself what's most important to you? There could be a difference there. Depending on your experience, credit, the property type, state that it's located in, PP + Rehab Budget, and ARV, you may have some pretty good high LTC options!

Jared Rine · Answer

Account Closed...I do a good amount of construction loans in CA, and there's not many groups out there who will do this as $$ is more competitive and investors need to make their return.  I'd want to know more information though because I'm usually known for flexibility.  So if it makes sense - say you've bought the land, done all soft costs, there's good margin over and above on LTV/LTC, etc., then I'd say it's an open convo to get a initial draw.  Or let's say you need for vendor deposits and then some to start work.  Possible.  I'd say it's easier for ground up construction, but that doesn't mean it's not open for flips. I'd need to see #'s on your flips. It might just mean structuring higher LTC so you're not so out of pocket with a reimbursement structure.