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  • Cesar Tamayo

Why is a scope of work important?

If you’ve ever seen my borrower’s checklist, you would see that one of the items on the list is a scope of work. A scope of work is a critical component in any RE investment project - especially if you’re working with a private money lender.

This week, I’ll dig into why your scope of work is important for your lender.

By the way, if you need funds for your next flip or rental purchase, I would love to help. Feel free to visit or give me a call at 484-706-9601

So what is a scope of work? A scope of work is a document that outlines exactly what work will be done on your project. It should be agreed upon by both you and your contractor with as much detail as possible so there is minimal (or hopefully no) dispute later.

From an investor’s perspective, this may make or break your project. If the scope of work is loose - or worse, non-existent - your contractor may not complete the work to your expectation.

So why does your private lender care about your scope of work? Well as a lender, I ask for this for a few different reasons:

  1. I want to understand all the work that is going to go into the project. Are you just doing flooring and paint? Are you doing an all new kitchen? Or just adding new countertops? Are you replacing the roof? Or just repairing a section? These are all questions that should be answered in your scope of work. The more detail the better.

  2. The scope of work should support your rehab estimate. If you’re asking for only $10,000 in rehab but your scope of work calls for new HVAC, new kitchen, new bathrooms, and a new roof; you may be underestimating how much your rehab will cost.

  3. A detailed scope of work tells me that you are organized, and have a high attention to detail. As a private lender, I love seeing that. It means you are on top of the project before it even starts. Nothing instills more confidence in a borrower than seeing they are on top of all the details.

If you want to see an example of a good scope of work, feel free to reach out and I’ll share one with you.

At the end of the day, you want your lender to know that you have all the details of the project covered. Sharing a scope of work with them is one of the most impactful ways to achieve that!

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

By the way, if you can share this with at least one other person, I would really appreciate it!

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