Rehab schedule vs construction loan draw schedule
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesQuote from @Mike Klarman:
Managing this part of the process is usually very hard for the traditional investor. Lots of traps, lots of financial education so to speak.
This also will choke/bankrupt a project. If the project gets to the point where you are getting a small draw, then doing little work, then start the draw process again, get a little draw, do very little work, etc. That will kill, kill you.
Construction has a capital intensive nature. Materials and labor are not cheap. 20% upfront is not crazy at all. But again, when you have a GC, you are trusting a third party with money and execution. I can't tell you how many GC ran projects went south on time and money.
To do this phase of the project correctly in my opinion, you need to front as much of the rehab as you can. At least 50% if you want this done in two draws. You put up 50%, then do a big draw, that money is used to complete the project and get the contractors paid, and then the final draw is your 50% back.
But I would go right to the laborers, the workers, and I would hold the money and decide when final payment gets released. You have to be your GC, IMO. No one will watch the dollars like you, no one.
And doing two huge draws just allows more room for error. In my experience you really need to tie each draw to a phase of work, it makes it so much simpler and easy to follow for everyone.
Just based on my experiences......
25 Replies
- Architect · Houston TX United States · Member since 2026 · 5 posts · 0 votes1mo
Hi Kwok,A 20% upfront deposit is pretty high for a condo flip and puts a lot of risk on you. Many investors cap the initial deposit at 10% just to cover initial permits and materials.
To fix your cash flow, try breaking the project into 5 or 6 smaller milestone draws instead of 3 huge ones.
Tie these draws directly to specific city inspection sign-offs (like framing or plumbing rough-ins). Hard money lenders usually release draw cash much faster when you show them official city inspection passes tied to your permitted plans.How detailed is the scope of work in your current permit drawings? Sometimes breaking those architectural milestones down early makes it much easier to get the GC and lender on the same page.
- 1moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
More context is needed with respect to the total cost of these renovations and scopes of work. Are we talking tens of thousands or hundred thousand plus total cost projects? What is the 20% going towards? Is it covering down stream sub contractor deposits required by the electrician, plumber, HVAC sub to obtain as a condition for obtaining their permits and purchasing materials? All important details.
Cash flow during construction is often overlooked and good to see this topic raised. It's not as simple as I need XYZ to close on the property. You need operating money to advance the construction. This can become problematic towards the beginning of the project when initial deposits are sought and also towards the end when items like kitchens, baths, appliances etc. which carry larger capital amounts need to be installed before the lender will fund those improvements.
Depending on the transaction, lender, strength of the deal and experience of the borrower there are ways to manage this. Some lenders will release partial payments for long lead order items, you can build "mobilization fees" or "developer fees" into the front end of the loan that can be used for early project liquidity purposes. Important to communicate and negotiate these items before the loan is funded so the lender and borrower are on the same page. Likely more success with a community bank than many of the alternative lenders that are more rigid and robot like in the way they operate and service loans.
- 1moBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Speaking as a GC, here is how I would do it - upfront $$ should be minor, less than 10%. The exceptions would be money to order cabinets/doors/windows and other trades that have a long order window. The GC should have enough funds to get his part of the job started.
I would always tie draws to the trades being complete (or progressing). I.E. when framing is done, pay that ....when electrical/plumbing passes rough inspection, pay them 50%, save the rest for final draw.
It seems nowadays that Contractors want too much money up front. I would be wary of giving too much as it leaves you, the investor, at risk.
Ideally you will find a GC who you trust and who trusts you and has trusted Subs...then just tie the draws to phases of work being complete.
- Specialist · NJ · Member since 2022 · 1k+ posts · 652 votes1mo
Managing this part of the process is usually very hard for the traditional investor. Lots of traps, lots of financial education so to speak.
This also will choke/bankrupt a project. If the project gets to the point where you are getting a small draw, then doing little work, then start the draw process again, get a little draw, do very little work, etc. That will kill, kill you.
Construction has a capital intensive nature. Materials and labor are not cheap. 20% upfront is not crazy at all. But again, when you have a GC, you are trusting a third party with money and execution. I can't tell you how many GC ran projects went south on time and money.
To do this phase of the project correctly in my opinion, you need to front as much of the rehab as you can. At least 50% if you want this done in two draws. You put up 50%, then do a big draw, that money is used to complete the project and get the contractors paid, and then the final draw is your 50% back.
But I would go right to the laborers, the workers, and I would hold the money and decide when final payment gets released. You have to be your GC, IMO. No one will watch the dollars like you, no one.
- 1moBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesNo decent General Contractor is going to allow a customer to run the job, his subs, or the budget.
Quote from @Mike Klarman:
Managing this part of the process is usually very hard for the traditional investor. Lots of traps, lots of financial education so to speak.
This also will choke/bankrupt a project. If the project gets to the point where you are getting a small draw, then doing little work, then start the draw process again, get a little draw, do very little work, etc. That will kill, kill you.
Construction has a capital intensive nature. Materials and labor are not cheap. 20% upfront is not crazy at all. But again, when you have a GC, you are trusting a third party with money and execution. I can't tell you how many GC ran projects went south on time and money.
To do this phase of the project correctly in my opinion, you need to front as much of the rehab as you can. At least 50% if you want this done in two draws. You put up 50%, then do a big draw, that money is used to complete the project and get the contractors paid, and then the final draw is your 50% back.
But I would go right to the laborers, the workers, and I would hold the money and decide when final payment gets released. You have to be your GC, IMO. No one will watch the dollars like you, no one.
And doing two huge draws just allows more room for error. In my experience you really need to tie each draw to a phase of work, it makes it so much simpler and easy to follow for everyone.Just based on my experiences......
- Rental Property Investor · Philadelphia, PA · Member since 2021 · 774 posts · 501 votes1mo
@Kwok Wong - I highly suggest following Bruce's lead on this one. Generally speaking investors want to put up as little as possible and GC want the most money as possible in a deposit. From my experience the higher the deposit requested from a GC the greater the red flag that presents. I think it's most natural to agree on a schedule of trades and then align payments accordingly: Demo is X, framing is Y, electric rough in Z, HVAC B, Plumbing C, etc... I would initially fund the demo, and when that is done, fund the framing, etc... If your deposit is too much you risk the GC not being able to manage the funds along side the project completion - or worse yet, use some of your funds for another project. Unfortunately, I know that from experience! Good Luck!
- Specialist · NJ · Member since 2022 · 1k+ posts · 652 votes1mo
It’s my experience that bad acting GCs are the main cause of rehab failure. I’m sure there are some rock star GCs out there that have the labor and knowledge, but there just is no barrier to entry to be a GC. A $100 and an application can get you licensed.
Even if you are going to tie a draw to a phase of the rehab, you have to be pulling out enough money for next phase.
Draws can be expensive and time consuming and the less you do of them the better.
Plus if you can fund as much of the rehab as possible, then you delay drawing down on funds and increasing your loan payment.
- Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes1mo
Quote from @Mike Klarman:
It’s my experience that bad acting GCs are the main cause of rehab failure. I’m sure there are some rock star GCs out there that have the labor and knowledge, but there just is no barrier to entry to be a GC. A $100 and an application can get you licensed.
Even if you are going to tie a draw to a phase of the rehab, you have to be pulling out enough money for next phase.
Draws can be expensive and time consuming and the less you do of them the better.
Plus if you can fund as much of the rehab as possible, then you delay drawing down on funds and increasing your loan payment.
NJ has extremely lax contractors licensing and regulatory environment. Have your contractors pull a performance bond, only costs me .5% & a quick call to my broker. Any contractor that cant or wont is a good indicator of someone you don't want.
- 1moBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesNot to be contrary, but in the states I have worked (AZ and CA) getting a GC license (or any) is very difficult and expensive. At least a couple thousand $$, takes months to get, requires a fingerprint/background check, and the pass rate on the test is only about 12%, harder than passing the bar lol,.......I can't speak to all states though.
Quote from @Mike Klarman:
It’s my experience that bad acting GCs are the main cause of rehab failure. I’m sure there are some rock star GCs out there that have the labor and knowledge, but there just is no barrier to entry to be a GC. A $100 and an application can get you licensed.
Even if you are going to tie a draw to a phase of the rehab, you have to be pulling out enough money for next phase.
Draws can be expensive and time consuming and the less you do of them the better.
Plus if you can fund as much of the rehab as possible, then you delay drawing down on funds and increasing your loan payment.
- Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes1mo
Hey @Kwok Wong - This is a really good question and tough one to figure out.
If your GC is doing great work and you arent coming out of pocket to much money for too long of a period fronting some cash isn't the worst idea.
@Bruce Woodruff nailed it by making sure you are paying upon completion of work. You could do a small % at the start and then a larger one at completion.
We always want to make sure we tie our Schedule of Values (aka scope of work) directly to the pay schedule.
Here in Chicago we typically take a 5-10% depoist and try to be cash positive through out the project, but thats speaking more from the GC side than the investor.
Quality Builders4.966 Reviews - Specialist · NJ · Member since 2022 · 1k+ posts · 652 votes1mo
It wasn't in NJ, but no. I never had a contractor offer anything like that. I think most put the cart ahead of the horse during the rehab phase, and that is part of the problem. It's like you can't wait to hurry up and jump off a cliff.
- 1moVijay FriedmanBusiness MemberMiami, FL · Member since 2026 · 766 posts · 122 votes
Quote from @Kwok Wong:
Hi everyone,
I’m looking for some advice on construction draws for condo and townhome flips.
Right now, my GC asks for 20% upfront and is used to getting paid in 3 draws during the project. My hard money lender reimburses me through construction draws after work is completed, so sometimes my cash gets tight while waiting for the next draw.
I’m trying to make the rehab schedule and the draw schedule match better so I don’t have to put out too much cash upfront.
For those of you who flip condos or townhomes:
- How do you structure your GC payment schedule?
- How many draws do you usually use?
- Do you pay 20% upfront?
- How do you keep good cash flow without slowing down the project?
I’d really appreciate hearing what has worked for you. Thanks in advance!
@Kwok Wong
The draw structure can make a big difference here. If your lender is strictly reimbursing completed work, I’d build the GC payment schedule around smaller milestones rather than a few large draws. For repeat flips, it’s also worth comparing lenders based on their rehab draw process, not just rate and leverage. - Specialist · NJ · Member since 2022 · 1k+ posts · 652 votes1mo
Bruce, no doubt there are good and honest and professional GCs. I’m sure. And I’m sure they’re super busy or doing it for themselves. If CA and AZ have high standards like that, great. Other states should adopt those guidelines.
My father-in-law was a mechanic his whole life. He was honest, and actually gave people breaks on prices. But even so, I feel very comfortable saying mechanics are generally crooks.
Good contracting is very expensive. That’s another issue. Your 80k job may be 100k with a top firm. Most investors get an estimate from any ole GC and go with those numbers. And as long as the estimate makes their numbers work, they go for it.
It’s just one of those fields where there’s lots of bad actors.
- Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes1mo
Yea it's actually sad how easy it is to get a general contractor's license in Illinois / Chicago. You literally need a heartbeat, general liability insurance, and to pay the city fee.
It creates a great space for a TON of really bad contractors and subcontractors because everyone is a contractor.
Going with the ole contractor is how I see SOOO many clients get upside down on their 203k renovation projects. Many of the HUD consultants here in Illinois provide low numbers in general, which then, in the client's eyes, makes deals work...then they work to find a GC to meet that number and end up not being able to finish the project.
Quality Builders4.966 Reviews - Specialist · NJ · Member since 2022 · 1k+ posts · 652 votes1mo
Pittsburgh is also terrible. Literally $100 and an application and you call yourself a GC. And a big problem is, even if you are a decent GC but you are a bad business owner then that will affect the job. Delays in labor, materials, missed costs, miss appropriating funds to other projects. There's lots to mess up on.
- Lender · All 50 States · Member since 2015 · 401 posts · 250 votes1mo
Kwok, I think there are really three schedules here, not two.
Your GC wants money before the next phase starts. Your lender wants completed work before it reimburses you. You’re sitting in the middle, so the real question is how much cash has to leave your account before the prior draw comes back.
Before you agree to 20% upfront, I’d ask exactly what that money is buying. If it’s tied to cabinets, windows, permits, or subcontractor deposits, list those items and confirm the orders. If it’s simply a general deposit, I’d treat that differently. Twenty percent of a small scope and 20% of a $200,000 scope aren’t the same decision.
Then map the job week by week: work completed, contractor payment due, draw evidence required, inspection requested, lender approval, wire received, and cash needed to start the next phase. Don’t assume “draw approved” means “money available.” Find out the actual inspection-to-wire time and what happens when the inspector asks for something else or a line item doesn’t match the approved budget.
I’d tie GC payments to observable milestones, not calendar dates. At the same time, the contractor has to stay funded enough to keep labor and materials moving. Starve the job and it slows down. Fund too far ahead and you’re carrying unnecessary contractor risk.
The biggest test is simple: if one draw is seven to ten business days late, does the project stop? If the answer is yes, the problem isn’t the number of draws. The project doesn’t have enough liquidity for the draw system you’re using.
Get the GC schedule, lender draw process, and your cash reserve on one page before closing. Rate and leverage matter, but a loan with a draw process you can’t carry can become expensive very quickly.
- Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes1mo
How do you structure your GC payment schedule?- We structure our GC schedule around inspection approvals. Those approvals include the city/village & if we are using an HML then the HML inspection. If we are self funding then we will still hire an indepedent inspector (same one's used by the HML) to inspect a contractors work. Contractors get 50% to get started on a specific part of the schedule & the remainder when they pass the inspection and provide us with lien waivers.
How many draws do you usually use?- The number of draws depends on the complexity of the renovation, inspection schedules and how fast we want to get in & out of a deal. With that said over the years we normally have ended up with 4 draws
Do you pay 20% upfront?- When you say 20% upfront I assume you mean 20% of the entire renovation budget. We pay for performance which means passing inspections. We will pay 50% upfront for each milestone & then the remaining 50% once an inspection is passed for that milestone. On some contract we will hold back 10% of that milestone until the entire renovation is complete. .
How do you keep good cash flow without slowing down the project?- There are some tricks that I'd rathar not discuss on a public forum. Send me a DM and I'll tell you. What I will discuss on a public forum is we often will have our schedule stacked so that a contractor can start on another phase of a project while waiting for the city/village to complete their inspection of a previous phase. It's a delicate dance, but our goal is to keep a project moving which means having enough cash to get that next phase started and now necessarily waiting for a refund from the HML.
Hope this helps and good luck.
- Lender · Chicago IL · Member since 2020 · 357 posts · 229 votes1mo
I agree with most of what's already been said here! I've been the borrower before and ultimately transitioned into private lending. I've worked with hard money lenders and banks, and their reimbursement schedules, while completely valid and fair, can definitely be challenging depending on how many projects you have going at once and how much cash you keep in reserves.
As a borrower, I’d also focus on building relationships with private lenders who may have more flexibility in how they structure draws and reimbursements. I’d look for vendors who will give you house accounts and bill every 30 or 60 days, and consider using business credit cards for certain material purchases when it makes sense, assuming your GC isn’t purchasing everything directly.
As a private lender, I’d also caution against trying to structure things so you’re putting out as little cash as possible. Some liquidity is part of the business, especially when you’re running multiple projects. The better goal, IMO, is making sure your lender’s draw process, your GC’s payment schedule, and your own reserves all work together so a normal reimbursement delay doesn’t bring the project to a halt.
And as you build a track record with the same GC, vendors, and lenders, there’s often more flexibility on all sides. Good relationships make a huge difference.
Kindly,
Jennie Berger
Property People
- Investor · Pacific Northwest · Member since 2026 · 538 posts · 306 votes1mo
The cash-flow problem usually isn’t that the lender reimburses after work is completed.
It’s that the contractor payment schedule and the lender inspection schedule are behaving like two unrelated systems.
That’s what I’d fix.
I would not automatically agree to 20% upfront unless that money is tied to something specific and defensible: mobilization, permits, long-lead materials, deposits that genuinely have to be placed, etc.
Twenty percent of a $150,000 rehab is $30,000.
That is a lot of unsecured cash to hand over simply because “that’s how the GC gets paid.”
I’d rather have the contract broken into milestones that mirror work the lender can actually verify.
For example, instead of:
20% upfront
30% halfway
30% later
20% at completionI’d want something closer to:
Mobilization / permits / documented material deposits
Demo + rough framing complete
MEP roughs complete
Drywall / close-in complete
Cabinets / flooring / finishes substantially complete
Final punch / inspections / CO where applicable
The exact phases depend on the project, but the principle is the same:
Every meaningful payment should correspond to something that now exists in the property.
That protects you and makes the lender draw much easier to support.
I’d also talk to the lender before changing anything with the GC.
Ask them exactly what triggers a reimbursable draw.
Do they require 100% completion of a line item?
Can they reimburse partially completed line items?
How quickly can an inspection be ordered?
How quickly after inspection does money actually hit your account?
Is there a minimum draw amount?
Do they require lien waivers?
Do they hold retainage?
Those details matter more than the advertised interest rate once the project is moving.
If your lender takes eight business days from draw request to funding, and your GC expects to be paid every Friday, you don’t have a contractor problem.
You have a working-capital problem.
That gap has to be financed somewhere.
One thing I’d avoid is making the GC your involuntary bank.
If the contractor has completed $40,000 worth of work and you say, “My lender hasn’t reimbursed me yet, so I can’t pay you,” that relationship is going to deteriorate quickly.
A good contractor should not have to finance your project.
But the reverse is also true.
You shouldn’t have to finance three future phases of their work before they perform them.
That’s why milestone billing is so much cleaner.
I’d also keep some retainage until final completion.
Something in the 5–10% range is common enough conceptually, depending on the contract and jurisdiction.
You want enough money left unpaid that the punch list still matters.
If the contractor has already received 100% and you have twelve small items left, you’ve discovered that your punch list is now competing with every other project they have.
I’d also separate materials from labor when it makes sense.
If there is a $14,000 cabinet order that has to be paid before fabrication, fine.
Show me the supplier quote.
Show me the deposit requirement.
Ideally the payment goes directly to the supplier or is otherwise clearly documented.
That is very different from writing the GC a generic $30,000 upfront check and hoping it stays allocated to your project.
For condos and townhomes specifically, I’d add one more layer: association dependencies.
If your scope includes windows, exterior penetrations, plumbing shutoffs, electrical work in common areas, dumpster placement, elevator use, working-hour restrictions or anything requiring HOA approval, those items can wreck a draw schedule if you treat them like ordinary construction tasks.
I’d have those approvals and scheduling constraints reflected in the rehab timeline before promising the GC milestone dates.
The cleanest system I’ve seen is when the rehab budget, contractor schedule of values, and lender draw schedule are basically speaking the same language.
If the lender has “Plumbing Rough – $12,000” and the GC contract has “Phase 2 – $37,500,” you’re going to spend the whole project translating.
If both systems break the work into similar line items, draw requests become boring.
Boring is good.
So I’d probably do three things:
Get the lender’s exact draw protocol in writing.
Rework the GC agreement into more frequent, objective milestones instead of three giant draws.
Keep enough working capital to cover at least one full draw cycle even if the lender is late.
That last one matters.
You can optimize the schedule all you want, but if your project stops because an inspector couldn’t come until Monday, the entire rehab is now being held hostage by a reimbursement delay.
You want the lender draw to replenish your cash.
You don’t want it to be the only thing keeping the next subcontractor on site.
The goal is not to eliminate working capital.
It’s to make sure you’re financing the gap between completed work and reimbursement, not accidentally financing half the project months before it exists.
- Flipper/Rehabber · Fresno, CA · Member since 2022 · 11 posts · 4 votes1mo
Common issue, your GC's schedule is front-loaded, your lender's is back-loaded, and the gap in between is what squeezes your cash.
Usually helps to push from 3 draws to 4-5 smaller milestone-based draws, and negotiate the GC down from 20% upfront to something closer to 10%. Also worth looking at how fast your lender turns around draws, that lag is often the real bottleneck, not the GC schedule.
Feel free to DM me if you want a lender recommendation, happy to point you toward one that handles draws quickly.
- 4wJosh HandlerPro MemberContractor · Memphis, TN · Member since 2026 · 61 posts · 72 votes
Nobody here has said what that 20 percent is actually doing on the GC side, so I will, because it changes how you negotiate it.
When a contractor wants 20 percent up front and cannot itemize it, one of two things is true. Either he is buying material for your job, or he is finishing somebody else's job with it. The second one is common and it is usually not fraud, it is a shop running on float, where each new deposit closes the gap left by the last project. That works fine until one job slips. Then every job slips, and yours is somewhere in that chain whether you can see it or not.
So the useful question is not whether 20 percent is too high. It is: show me what this buys. Supplier quotes, permit fees, sub deposits, long lead orders. A shop with actual working capital can produce that list in ten minutes because it already exists internally. A shop running on float will give you a percentage and a feeling. That answer tells you more about whether your schedule holds than a reference call will.
Two other things from this seat.
Ask to pay the supplier directly on the big material orders. Cabinets, windows, HVAC equipment. If a GC resists paying a vendor directly for material going into your house, that is information. If he is fine with it, you just removed the largest piece of unsecured deposit from the argument and he still gets his material on time.
On the draw lag, the structure I have seen work best takes you out of the middle of the money entirely. Set day of the week for completed work video, lender wires the draw straight to the contractor rather than to you. Sounds like a small change. It is not. It kills the "my lender has not funded me yet" conversation, which is the conversation that actually poisons a GC relationship, and it gives the contractor a payment date he can staff against. Not every lender will do it. Worth asking yours, because the ones who will tend to be the ones who understand construction rather than just underwrite it.
Last thing, and it is the one that answers your actual question about not slowing the project down. From the build side, the cheapest thing you can do for your schedule is decide fast. A late draw costs you days. Owner indecision on selections costs weeks, and it costs them silently, because the crew just goes to another job and comes back when you answer. Have your finishes picked before demo starts and you will buy back more time than any draw structure will give you.
Full disclosure, I run a construction company, so I am on the side that receives these deposits. Weigh the deposit advice accordingly.
- Lender · Chicago IL · Member since 2020 · 357 posts · 229 votes3w
Great point on the 20%. I’d add one thing: that upfront payment isn’t always just covering labor and materials. Part of it can also be the contractor reserving time and bandwidth in their schedule for your project.
I’ve been on both sides of this—as the borrower/investor/GC/designer/builder and now as the lender/client—so I’ve seen how differently this can look depending on where you’re sitting.
When I was acting as the GC on a new construction spec build for a client, part of my 15% down payment was simply for carving out space in our calendar for her project, in addition to paperwork, material prep, permits, etc.
So I agree with asking what the deposit is actually for. I just wouldn’t assume that every dollar should tie directly to a material invoice or immediate labor cost. There’s definitely a balance. And it can be tricky to find that balance.
- Investor · Pacific Northwest · Member since 2026 · 538 posts · 306 votes3w
Kwok — curious where this landed a month later, because I think there’s a useful distinction buried in the original question.
The problem wasn’t necessarily that your GC wanted 20% upfront or that three draws was inherently wrong. The problem was that your contractor’s payment schedule and your lender’s reimbursement schedule were operating on two different clocks.
That turns you into the bridge lender for your own rehab.
Looking at it a month later, the question I’d ask is: did you solve the cash problem by adding liquidity, or did you actually redesign the process?
I’d want the GC scope broken into milestones that correspond directly to what the lender will inspect and reimburse:
mobilization/materials → rough work → close-up → finishes → punch/final.
Then build the lender’s documentation requirements into each milestone before work starts — photos, invoices, lien waivers, completion evidence, inspection request, etc.
That changes the operating model from:
GC needs money → you advance cash → work happens → lender eventually reimburses you
to:
work reaches verified milestone → draw package is already ready → lender releases capital → next phase starts.
You still need a liquidity buffer, but now the buffer is protecting against timing variance instead of permanently financing a badly aligned process.
Kwok, if you’re still working through this, I’d actually be interested in what happened over the last month. If you send me the GC payment schedule and the lender draw requirements, I can map the two against each other and show you exactly where the cash gets trapped.
- Investor · Moosic, PA · Member since 2026 · 1 post · 0 votes3w
One thing I would keep very tight is the relationship between the rehab schedule and the draw schedule. I’d want each major scope milestone tied to the documentation required for the next draw, with enough working-capital cushion that a delayed inspection or reimbursement doesn’t stop the project. The biggest risk usually isn’t just whether the total budget works — it’s whether the timing of cash availability matches the timing of the work.
- 3dErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Hey Kwok,
My clients usually have a handy HELOC open or Cash Out set aside from a refi. This usually helps keep the project moving forward while the draws process. It also helps to work with a lender that offers a quicker inspection period. There are many that have portals set up to take photos and review. The draws are usually paid out in 24-48 hours.
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