Hard Money Loan Draws

[Kyle Winters]

I am doing my first fix and flip loan where the lender sends me draws after work is done. My question is how do new investors front the initial money to start work if the point of the rehab loan is that they don’t have their own money to do renovation? My rehab will only be $10-20k, so I do have some funds to get it going, but is this typical of hard money lenders? Do you ask contractors to be paid after work is done? I’m gonna guess that answer is no, but just wondering how this would work with a larger rehab.

[Chris Seveney]

@Kyle Winters

1. You should have your own funds

2. Never pay contractors before work is done. They want to buy materials - great buy materials then have them sign a lien waiver and pay them