In this interview, Global Integrity Finance host Toby talks with CFO Angie Potter about the escrow rehab draw process for borrowers and investors. They walk through how a borrower initiates a draw by submitting a detailed request on the company website, referencing the original underwritten scope of work. Once submitted, a third‑party inspector is ordered; the inspector receives the scope, invoices, and access details, visits the property, and returns a report that lists each line item, completion percentages, and photos tied to specific items. Angie explains how the team validates the report, resolves discrepancies (over‑estimated costs, missed work, dumpster counts, or inspector errors), and may dispute portions before finalizing payment. Payments are limited to the amounts and items approved in the scope; supplies not installed or un‑installed appliances are not funded. The typical turnaround from request to fund disbursement is about four business days, with possible extra time for disputes. The conversation ends with guidance for borrowers on providing detailed draw requests, understanding payment rules, and contacting the support line (214‑548‑5190) for any questions or disputes.
Chapters
Hey everybody, this is Toby with Global Integrity Finance. Today we're going to talk to you about the escrow rehab draw process. We have a lot of the new investors, not so much new in investing but new with Global, that doesn't fully understand how the draw process works, how they go about it, and what the expectations are. So today we've got with us Angie Potter, CFO of the company, who who handles all those transactions. And so we're going to talk about the flow, the process, how they go online, how they submit the form, what the expectations are, the inspections and all that. So welcome, Angie. How are you doing today?
I'm good.
So first time on the show?
Yes.
Glad to have you here. It's always good to have somebody that looks better than me on the show. So first and foremost, Angie, what's the process for a client who is funded a loan They've done some rehab on the loan and now they need to draw some money out. So what's the process?
Okay, so when they're ready to do their first draw, they're going to go to our website, which is www.globalintegrityfinance.com, and at the very top there is a draw requirements tab. At that tab, when you click on that tab, it actually gives you the tab to do a draw request.
Okay.
At that time, you'll fill that information out. Be sure and put accurate information on the draw request. Once you submit that, it will actually be emailed to me. At that point in time, we do order an inspection.
Okay, um, let's talk about the the form real quick and make sure that we're specific on that. So each and every borrower has a scope of work that they submitted to us that we've underwritten. We've done the appraisal based upon those line items on that scope of work and the dollar amount that they've allocated for that line item, correct? Mm-hmm. So when they do that, when they go online and fill out that request, what kind of details do you need in reference to that?
Well, if they can actually go to their scope of work and put it perbatim as to what they're expecting and what they feel like is completed, it helps me when I get the inspection back to compare it to, okay, the inspector may not have paid on this, but they said it was done. Now I can start disputing that line item and find out exactly what happened.
Okay. We do see a lot of people who just kind of generically say, "I've done this, this, and this, and this. Pay me $20,000." Correct. And this, this, and this, and this may not be on their scope of work.
Correct.
Do you see that a lot?
Yes, we do.
So, okay, we'll go into that in a little more detail. So a borrower has submitted the draw request. You now order a third-party inspection.
Correct.
Tell me about that process.
The third-party inspection, I actually send them the draw inspection request that you've sent me, and I also send them your scope of work and any invoices, receipts, that type stuff that you've sent me actually goes to the inspector. The inspection is set up through the third-party inspection company, and they order it through an inspector. He then reaches out— him or her reaches out to the borrower to schedule getting into the house, getting onto the property. If you've included a lockbox number, access to the property, if they can't get a hold of you, a lot of times they'll just go on out. But if you've just put a phone number, they actually need a phone call back to be able to access the property.
Okay.
At that point in time, they'll do their inspection report. It goes back to the third party. They type it all up and then it comes to me.
Okay. So once you receive that report, what does that report look like? What's the details in that report?
Well, the report The report's going to have your scope of work totally typed out. And then it's going to have a total at the bottom of the total of all the work being done and a percentage basis. Then on this column over here is going to give you the work that the inspector showed completed. And it also has percentage basis.
What else is in that report that helps you determine that it's validated?
Lots of pictures.
So you get photos of those line items showing the work either completed, partially completed, or not touched.
Correct.
They're not taking pictures of the whole house. They're taking pictures of those line items that that borrower has requested to be paid upon. Correct?
Correct. So for example, say your rough-in on the plumbing is completed and I can't— they didn't pay you for plumbing, but I can look at the pictures and I can see, oh, well, you've got it piped to the bathroom and I see it coming out of the walls for the showers and the bathtubs and the sinks, then I know the rough-in has been completed. So I can go back and dispute the report through the inspection company and go back to the inspector themselves and get the report corrected.
Okay, so that's positive. So even though the inspector may have said, "Oh, nothing was completed," you can note and see that, "Oh, it was and they just missed it." So you're saying our inspectors sometimes make mistakes?
Oh yeah.
So is that common?
It is common. Yes, it is common.
And that's one of the things that we want to emphasize to our clients is that, so you send in a draw request, we've sent a third-party person to go out there and inspect it. They've done their due diligence. They've assessed the work completion. They've taken photos of that, and then they've turned the report into us. And then We, you, then analyze that to make sure that it is accurate, especially if somebody has requested $21,000 but the inspector says only $12,000 is due. That causes a great concern and a flag for you to really dig into it to see what the difference is, right?
Correct.
So when that happens, 90% of the time, what do you find?
Well, um, both ways. I find a lot of times that the borrower has overestimated work that was done or thought the work would be done before the inspector actually got there and it wasn't. That's where the pictures help tremendously. But I've also seen where the inspectors just flat missed it or didn't realize that that line item actually went with— it just said plumbing. That the plumbing wasn't complete, so they didn't pay anything. Well, the rough-in was complete, so let's go ahead and give them 50%.
Gotcha.
So I can help maneuver through those. Also, we run into issues with dumpsters. The inspector sees a dumpster out there, so he pays you for just for one dumpster because that's what he sees. You might have already gone through 3 dumpsters. So with receipts and invoices for the dumpsters, it helps me go ahead and pay extra on that section. Gotcha.
So the more details that our client can give to us specifically based upon that scope of work, the easier and simpler and more expedited your process would become. Correct. So have you run into a situation with a client who, let's say, sheetrock— let's say that they did a line item for $2,500 in sheetrock, but they ended up spending $4,000 in sheetrock, and they requested $4,000 in sheetrock.
Yes.
Have you had that situation before?
Yes, we've run into it quite a bit.
Okay, so how do you— how do we educate our borrowers on that line?
Well, unfortunately, I can only pay you for what you estimated and is on your scope of work.
Mm-hmm, okay. So we have to make sure that our clients fully understand that if you've done a scope of work and you've exceeded that dollar amount, That's something that you have to just eat, unfortunately. And this is where we need our clients to be very savvy in their budget.
Correct.
That if it's going to cost $60,000 and these line items equal $60,000, this is what we're going to pay 100% on, not any more.
Correct. And I have found, you know, a lot of the clients come back and say, well, we did the scope of work when we were in the process of buying the house, and then once we got into the house, we realized that we needed to change it. That's the best time to change it, before we ever get into the inspections. Once we get into the inspections, it gets a little confusing because the bottom line never adds up to the same amount once you start making changes.
Gotcha.
So then we work off percentage basis also. So they don't always see those numbers working out. When the total is larger than what is actually in the escrow account.
Okay, so let me see if I can run through this real quick and try to simplify what we've talked about here today. So first and foremost, when a client is looking to pull money out of their rehab escrow funds, first and foremost, they go to the website and request a draw.
Correct.
Fill out that form with as much detail as possible based upon your scope of work, not just, oh, I spent $2,000 here, $3,000 there, $4,000 there. If that's not on a line item or that dollar amount is not in that line item, then it does us no good. So the more detail you can give us in that request, the better our information is to go to the inspector. Once we receive that, that immediately goes to an inspector. How long does it take once you get that request? Does it go out to an inspector inspector?
It goes out pretty fast to an inspector. The whole timeframe from the time that I can actually order the inspection to actually getting funds out is about a 4-day— 4-day— 4-business-day turnaround.
Because then the inspector has to get ahold of the client, schedule the ability to get into the house, get into the house, do that report, send it back to us. Then you've got to do your due diligence unless it's just spot on. If there's a discrepancy there, then you've got to do some research. That may delay it another day or so. And then you'll, once everything's concluded, then you send out to the client an approval for the draw request along with the report and showing how much is being disbursed.
Well, actually, how I do it—
oh, correct me if I'm wrong—
is as soon as I get the report and I start looking at it, I go ahead and send I send that copy of the report to the borrower so that they can go ahead and start looking at it.
Okay.
I also order the funds that I can fund at that point in time so that the time frame that it may take to dispute doesn't hinder them as bad as—
So I'm requesting 10, you may be authorized and good to go 7, and we'll, we'll discuss the other 3.
Correct.
Gotcha. So I'm going to get my 7 now.
You're going to go ahead and get funds keep you moving forward.
Gotcha.
And then it may take us a couple of days to dispute and get it all correct, 'cause I do need a new corrected report.
Gotcha.
For the funding, so that they have a copy of every inspection report. They know what lines haven't been paid on, what lines have partially been paid on, and what lines have been paid in full.
Perfect. Outstanding. What else can we help educate the clients on, on making this process smooth smoother and more understandable?
Well, the main thing for them to know is that we don't pay for supplies. We don't pay for the drywall that's stacked in the living room and hasn't been installed yet. We don't pay for the appliances just because you bought them from Sears and they're sitting in the middle of the floor. They have— it has to be installed into the property for us be able to pay on it.
And why is that?
Oh, it's so easy to move it to another property.
Or get stole.
Or get stolen, yeah.
So, and that's a great thing that we do have a lot of people that say, hey, but I've already paid for all this, I'm just waiting for my contractor to get it installed, but I'm out that money. We understand that, you know, but you also have to understand that if for some reason that is stolen, we can't pay for it again, Returned. Yeah, or it gets returned. I pay you and then you return it. So it does need to be installed. We need to know that it is viable.
Correct.
Okay. All right, anything else? All right, well, we hope that this helps you understand how the draw process works. Helps clear up some confusion or misunderstandings. But more importantly, in the event that you have a question, a concern, or a dispute, Give us a call. We're always available, ready to talk to you, explain to you what we see and why we're doing what we're doing. Hopefully this will clear up any misunderstandings or confusion because we want you to be successful, we want you to be profitable, and we want you to have a great experience. So call us. We understand that sometimes communication gets broke through emails, but if you call us, I guarantee you Angie will go through it line by line fully explain our position and what we see and why we're making this decision. Call us at 214-548-5190. We'll talk to you soon.
