Catherine Bell explains how construction draw schedules work on fix-and-flip loans. You complete a set amount of work, like $25,000, then the lender verifies it with a video walkthrough or inspector before releasing the money. Keep cash on hand for construction costs instead of drawing everything upfront.
Are you a land shark doing deals? Fix and flip, I will do a construction holdback, which is a draw schedule. So they have to say— they have to like do maybe, maybe $25,000 worth of work. They send me all the evidence of the work. I make them do a live video walking me through so it's not some house in Timbuktu that isn't even the one I'm loaning on, so that I can verify the work has been done. Either that, or I can send an inspector out there to give me an inspection depending on the, the size of the loan. So then Once you're satisfied there, you're going to send them their draw and they get paid back for that. So they have to have money, they have to have some operating money for construction holdback. Now this one, I think they just want the money and they're going to just do it like that's what they've proposed. But that's not how I would come back. That is the way I like to do.
