Throughout the renovation process, the lender disperses funds to the contractor in draws once the work is completed and has a third party inspector go and confirm the work is completed with each draw.

I just want to make sure I have my ducks in a row before attempting to move forward.Thanks in advance for any advice you may be able to offer me.BrandonYou need to leave reserves for 6 months of living,loan service, insurance, tax etc and see the cashflow...  

Also, you could use this moment to set up an investment account that would position you to build cash reserves even when you buy real estate in the future.Consider researching infinite banking.

Typically, you will need to qualify for one through an application process because it is reserved for low-income buyers.

@Vijaianand Thirunageswaram thank you for your confirmation of the material prices being a driving cost factor at the moment.

Our guy came in at 23,000 for full foundation repair, and as I did diligence on the rest of their estimates on repair they consistently came in short; our GC separately confirmed and even informed me I was low tooComps in the area came in at 141 per square foot, which at our square footage means we would have sold for about 320,000Hard money was to expensive as well so we are currently working out other options so we never have to consider that option again.So all expenses included with no major surprises we would have been all in for around 340 to 345,000, which meant a loss of 20-25,000 if we went off of price per square foot as per a realtor, or best case if it sold for appraisal value we might have made 8-10,000. 

You are going to want reserves in case (when) things go wrong.

If you plan on building a portfolio of rentals and the numbers work (monthly income, reserves just in case something happens) then look at holding onto it.

@Mike BianchiIt won’t let me put the chart up so I’ll try to word it out Rough estimates Purchase 1,300,000Down payment 30% Mortgage $5,838 Income Lot rent - 23 units X $400 = 9,2002bed 2 bath 18 units X $375 = $6,7503bed 2 bath 5 units X $450 = $2,250Vacancy 12% = $2,184 Expenses Insurance $670 Utilities $ 1,121Administration $ 170Managment 10% = $1,602Repairs 13% = $2,100 , $1,000 per unit per year Reserves $500 Taxes $565Other $860 Cash flow - roughly $2,700 Trash is part of the taxes County water Private Septic

I always submit a FOIA request (Freedom of Information Request) to the city before I buy to confirm zoning, fines, judgments, violations, outstanding water bills or other issues, ongoing code enforcement issues, etc.