Help Structuring Rehab Financing with Bank

[Ryan Smith]

Hello all, newbie here and I am trying to figure out the best way to structure a rehab fund allocation with a bank. I was able to find a bank that would finance the renovation costs into the total loan cost. I am trying to negotiate the most investor friendly way to ensure that I always have funds available to pay for materials/contractors.

Below is an idea that I have drafted up. Any critiques or different ideas would be much appreciated.

75% LTV Rehab - structure rehab around a 4-payment schedule.

• First, we will create a rehab scope of work that details the rehab in 4-phases (25%, 50%, 75% and 100% completion phases).

For example:

• Phase 1. Replace windows, roof. Cost: $12,000
• Phase 2. Replace plumbing, electrical. Cost: $5,000
• Phase 3. Install sheetrock, doors, trim, insulation. Cost: $8,000
• Phase 4. Install flooring, cabinets/countertops, paint. Cost: $7,000
• As rehab is completed, the bank allots funds into account for us to withdraw and pay contractors/materials

Has anyone had a similar deal or worked something out with a bank that has helped them out in the past?

Thanks again in advance!