In fix-and-flip loans, lenders release money in draws as construction hits milestones. You complete $25,000 of work, show proof through video or an inspector visit, and get paid. You need separate cash for construction costs 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.
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