What Does It Mean?
A Draw Schedule is an itemized schedule of costs required for the completion of a renovation or construction project. Your lender will ask you to complete this schedule prior to closing and it will be used to structure and finalize your loan terms (for this reason, it may not be possible to revise your draw schedule after closing – so prepare it carefully!). Draw schedules may be grouped into phases, but more typically will include detailed line items for each piece of work to be completed (such as flooring, cabinets, appliances, windows, etc.)
How Does It Affect My Hard Money Loan?
After closing, your Draw Schedule will be used to determine how much money will be released to you as work is completed. The amounts released to you will be in accordance with the schedule – even if your costs go up – so it’s important to obtain accurate cost estimates prior to closing. Typically, your lender will only release money to you as work is completed (not before!), so an inspection will be performed at each draw to verify the actual amount of work that has been done.
Where Can I Find the Form?
LYNK Capital’s draw schedules for both fix and flip and new construction projects can be found here.