Drew 2: Safely Paying Contractors & Protecting Your Renovation

9 Jul 2026 · 2 min

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2:03

In this on‑site video, real‑estate investor Drew walks viewers through his method for paying contractors during a house flip. He explains that he never makes large upfront payments; instead he structures the contractor’s compensation into five incremental draws that are released only after specific work is completed and the agreed‑upon materials are installed. Drew emphasizes the importance of verifying that the work and materials align with the original repair bid because they directly affect the after‑repair value (ARV) of the property. He then describes how his hard‑money lender uses an online portal to review proof of work, conduct its own inspection, and issue the draw check to Drew rather than directly to the contractor, adding an extra layer of protection. The video’s core message is that by controlling payment timing, validating materials, and routing funds through the lender, flippers can safeguard their investment and still achieve profit.

Chapters

Hey now, welcome to another Drew 2. I'm at my flip property. Today I'm covering the draws, or the money that I'm gonna pay my contractor. So whenever we pay our contractor, we pay them in small increments. Look, this is where the compressor will go when they get the HVAC all the way in. So in the beginning, when my contractor gave me their repair bid, I then— ooh, water from watering the grass. Everything's coming together, I'm telling you. We agree to the schedule of payments. In this construction, we have 5 draws to my contractor. We do not pay them upfront. $40,000 upfront? No way. We're not doing that. I don't even give them half. Even if you give them 10%, I still might say not to do that either. Nobody's getting too much money. Once they get the work done, then I start paying them. So what am I checking? I'm making sure the work is done, but I also want to validate That the materials are done like we agreed to in the beginning. Those materials affect my after-repair value, my ARV. I need the materials to be right or my value might be lower than what I estimated in the beginning. It all comes together here. Tile in the bathroom, right? Tile to get my— oh, huh, toilet. I'm telling you, it's all coming together. So, these are the things we validate. I then return it into my hard money lender. My specific hard money lender— hey, countertops and the sink. My specific hard money lender has an online portal. If I feel very comfortable about working with my contractor, I give them access and they can load the proof. And you better believe the hard money lender inspects it. They're not just cutting a check either. But when they cut the check, they cut it to me, not the contractor. These are the protections in place. Validate the work. Make sure the materials are right and make sure the money goes to you before it goes to them. Flipping ain't easy, but you can absolutely make money if you protect yourself. Hey, thanks for watching today's Drew 2. We'll talk with you soon.