Previously I shared the story of the Philly project we recently funded. Since the loan went out, the borrower hasn’t wasted any time getting the construction work started. This week I wanted to share with you a walkthrough video of the first rehab milestone. This inside look might help you in working with your private lenders on future projects.
On that note, if you need a lender for your next investment deal, I may be able to help. Feel free to visit www.wingspreadlending.com or give me a call at 484-706-9601. :)
With every loan that has rehab work associated with it, I hold the rehab funds in escrow for the borrower to pay for the construction work. When drafting the loan documents, I work with the borrower to come up with a draw schedule that outlines: # of milestones (usually 3 or 4), the work to be completed in each milestone, a conservative target date by which the work will be completed, and the payment amount that I will release once the work is completed.
I provide the borrower with a template for this and I empower them to work with their contractor to come up with something reasonable. I’ll then review it and make some adjustments, if needed. Both the borrower and I will collaborate on the draw schedule together to make sure it’s reasonable for both of us. Then I’ll add that to the loan docs as formal agreement
Once this borrower completed all the work in Draw 1, he sent me a video capturing the results. I was able to confirm that the work was complete and then I sent him payment within 24 hours so he could pay his construction team.
If you’re interested in seeing the progress for yourself, you can watch the video here.
Hope this was helpful for you. If you're looking for a loan on your next deal, please feel free to reach out to me at 484-706-9601 or apply online at www.wingspreadlending.com
Not ready to apply for a loan? We're always happy to connect with people to see how we can help in the future!
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