Why HOld Back My Money?

[Toyin Dawodu]

I never really understand this logic. Hard money lenders give you a loan at eye popping interest rate. They all seem to have the same policy. "We'll loan you blah blah blah percentage of the LTV, plus 90-100% of rehab." Then they hold all the rehab funds back until you fix the property. Then they will start releasing your money in stages. First they want you to send photos, then they send some inspector, after that they release a portion of what they feel you deserve. Your contractors are in your butt for money. Yes, I understand these lenders have to protect their investors money. However, how do they expect a newbie, and even an experienced rehabber to make ends meet having put all their money as down payment to buy the property? Most lenders insist that you have so called "skin" in the game. Where will the initial rehab money come from before it is replenished from the holdback? These problems have plagued me for ever. As a rehabber, I constantly have to juggle money while praying that my "Shark" HML does not delay or will at least give me some of my money upfront to start the rehab. Does anyone else have the same headache? How did you solve the cash flow crunch? I need some advice on this. Am going crazy with in this shark tank!