For fix & flip loans, rehab 100$

[Hyeseong Park]

I have done 2 flips with my cash only so far and I'm trying to finally go with fix and flip loans to buy multiple houses. Usually these fix and flip lenders do ARC up to 85%~90% & rehab 100%, so I know I have to pay some downpayment for purchasing houses. 

But I recently reached out to one broker and he said once I purchase house with borrowing money, I still have to pay for whole rehab amount at the beginning to handyman and when everything is done, I get money from the lender for whole rehab payment. Is this normal?

Or I dont know if this paying whole rehab price from my pocket first and get paid from lender at last is depending on lenders. 

And if not so, is there any way that I can get paid from lenders for rehab payment at the same time as what I get for purchasing houses?

[David Ramirez]

Hey @Hyeseong Park, 

I've never heard of a hard money lender requiring you to pay the full rehab cost upfront. Typically, it works through draws of money based on the work completed. You do have to start the project with your own money, but they will reimburse you each time you show them the completed work. For example, if you have painted the house both inside and out, you can request a draw for the amount you spent on that. They usually ask for pictures or send someone to verify the work. You pay a small fee for every draw ($100-$300), so some investors try to minimize the number of draws to reduce costs.