How Construction Draws Work With Hard Money
Hard money comes with a lot of variations and rules as to how the funds can be used. Some companies only give out acquisition funds. Some only give construction funds and other companies like Hard Money Bankers, LLC can give out construction and acquisition separately or together. In the event that you receive construction funds on a normal transaction that you are receiving acquisition funds as well, the construction money is typically disbursed in phases. With Hard Money Bankers you actually set up your own draw schedule as you see fit. The construction disbursement phase is very important to be aware of your own cash flow and to know how fast your lender turns those around. Hard Money Bankers is 72 hours or less. If your current company takes weeks to submit the draw and then weeks to approve it, that money that you don't have is very expensive to hold that long. Speed is key. When you have a phase of the construction budget coming to completion, be sure to try to time the inspection the day you complete the work so your lender can receive confirmation and wire you the money that day. This would leave the least amount of down time and make your money the cheapest it can be. When choosing a lender to work with, be sure to understand the construction draw process very clearly as it can cost you a lot of money if your lender is not fast with their turn around.
Ian Walsh215.839.3271
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