[Stephen Husted] (0:00 - 1:07)
Right quick and dirty on how to handle dealing with your construction draws on your new rehab project. So you've closed on the house and your contractor goes out to the property, starts to do some work on it. And let's say there's $10,000 worth of work done.
Once that's coming up, what you can do is you reach out to the lender. The lender is either going to send somebody out to check out the work, or they're going to ask for photos. Once they get that and they verify it, they're going to take that and they're going to wire that money to your bank account.
And then after that, what you do is you go ahead and pay your contractor and trick. If you can, during the process, delay using the money from the lender, and you have money set aside, let's say 15,000, that you can actually just sell fund in the beginning. Try to do that because what it will do is it's going to save you.
Every time that you take a draw, it's going to increase your loan amount, which actually makes your payment, the mortgage payment go up. So the longer you can delay your construction draws, the better. What we typically do is let's say it's a $50,000 project.
We'll sell fund to the very end. And then we'll have the lender come out. They'll verify the work.
They send the 50,000 to our bank. And then we just put that right back onto our line of credit. That's a little trick to kind of save you some money.
