Once you've closed your fix and flip or new construction loan, the next exciting step is to start construction! As you complete work on your project, you'll want to draw funds from your loan to pay for the work that you've done. To do this, you'll submit a Draw Request to your lender.

Draw Schedule and Construction Budget

Prior to closing your loan, you or your contractor will provide your lender with an itemized schedule of work to be completed, along with the associated costs. This will be organized on a form called a Draw Schedule that will become the basis for submitting your future draw requests.

Most loans will permit you to take between three and six draw requests, though loans for more complex projects may allow more. If you anticipate needing to more take more draws, your lender may permit that, but with more fees charged (to offset the lender's higher administrative costs).

Draw Requests

When you're ready to submit a draw, you'll complete a Draw Request form, listing the specific items of work you've completed and the associated cost. Some tips for completing your draw request:

  • You can only request draws for completed work. Most lenders will not reimburse you for materials purchases, contractor deposits, or similar items. Even if you've purchased and paid for those kitchen cabinets, don't expect your draw request to be approved if they're sitting on the floor - they must be fully installed.
  • You must submit your draw requests in accordance with your originally approved budget. Even if your costs go up, your lender will issue draws from your original Draw Schedule, though your lender may allow some flexibility to re-allocate your budget between items - if you can show savings in other areas. If you change your plan significantly, though (such as changing room counts or other significant alterations to your plan), don't expect your lender to blindly approve your request. Significant changes to your construction budget can only be made with your lender's approval and may require your loan to be re-underwritten.

Inspections

After receiving your Draw Request, your lender will schedule an inspection of your property. The purpose of this inspection is to obtain photos showing that the work you've listed on your Draw Request has actually been completed. This inspection will usually occur within two or three days of your Draw Request submission.

After receiving the inspection photos, your lender will determine the amount of work complete and issue your draw. If items you've requested are not complete, the amount paid to you will be reduced to match the amount of completed work. In such event, you can re-submit those items on a future Draw Request once they're complete.

How Long Does the Process Take?

If there are no issues, most draws can be paid within three to five business days. You can help speed up this process by accurately completing your Draw Request and making sure that it matches to your original Draw Schedule and budget. This will make your lender's job easier, meaning you can get your money more quickly.

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LYNK Capital is a fast-growing hard money lender offering hard money fix and flip loans, rehab and renovation loans, construction loans, and rental property loans. LYNK Capital is a direct private lender that offers lending solutions to real estate investors, contractors, builders, and developers.

Hard Money Fix and Flip Loans

LYNK Capital is your fix and flip lender. We offer hard money fix and flip loans for real estate investors. Fund your rehab or renovation project quickly with competitive interest rates and origination fees. Faster than bank financing with more flexible loan terms. Purchase and refinance options available.

Hard Money Construction Loans

Hard money new construction loans for builders and developers. Fund your new construction project quickly with competitive interest rates and origination fees. Faster than bank financing with more flexible loan terms. Purchase and refinance options available.

Rental Loans

Single-family rental loans for real estate investors. Borrow up to 80% of your property value. Finance your investment property quickly and easily.

Where Does LYNK Capital Lend?

LYNK Capital makes hard money fix and flip and construction loans in: Alabama, Connecticut, District of Columbia, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

Get a hard money loan for your investment property today with our online rate quote and pre-approval.

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