Hard Money Lender draw process

[Timothy Richardson]

I'm doing my due diligence on HML'S in my area and pretty much they are all along the same lending premises. My question is about when the money for rehab is being phased out. I know it is wired after their inspector reviews the completed work. When working with a contractor with little funds how do you as an investor or how can you negotiate for them to start the work, pay for materials, and complete the work so it can be inspected so they can get paid? I know some contractors have accounts set up with vendors, manufactures, ect...can you leverage the fact that you are dealing with hard money and that contractors understand the process? Or do you HAVE to come out of pocket in this instance? (I know I asked a few questions lol but...)

[Jeff Lezark]

@Manolo D. makes a good point. If you can't pay cash then he doesn't want the aggravation of getting his money from me on your behalf. The expectations need to be set with the contractor in terms of how and when to receive payment. As long as you have a term sheet in hand from a valid lender the contractor will have assurances of being paid.