How to Manage Your Rehab Budget and Draw Requests with Loan Ranger Capital

If you are a real estate investor who is looking to fix and flip properties, you may need a hard money loan to finance your project. Hard money loans are short-term loans that are secured by the value of the property, rather than your credit score or income. They are ideal for investors who need fast funding, flexible terms, and minimal documentation. These will typically include draws on a rehab budget.

However, hard money loans also come with some challenges, such as higher interest rates, fees, and points. One of the most important aspects of using a hard money loan is managing your rehab budget and draw requests. A rehab budget is the amount of money you plan to spend on renovating the property, and a draw request is the process of requesting funds from the lender to pay for the work done.

In this blog post, we will share some tips on how to manage your rehab budget and draw requests with Loan Ranger Capital, a hard money lender based in Texas and Tennessee. Loan Ranger Capital offers competitive rates, fast approvals, and excellent customer service for investors who need hard money loans for fix and flip projects.

Tip #1: Create a realistic rehab budget

Before you apply for a hard money loan, you need to create a realistic rehab budget that covers all the costs of renovating the property. This includes materials, labor, permits, inspections, utilities, contingency, and holding costs. You can use online tools such as HomeAdvisor or Fixr to get an estimate of the average cost of different types of repairs and improvements.

You should also do your own research on the local market and the comparable properties in the area. You want to make sure that you are not over-improving or under-improving the property, and that you are adding value to it. You should also factor in the after repair value (ARV) of the property, which is the estimated value of the property after it is fixed up and ready to sell.

A realistic rehab budget will help you determine how much money you need to borrow from the lender, and how much profit you can expect to make from the deal. It will also help you avoid overspending or running out of funds during the project.

Tip #2: Communicate with your lender

Once you have created your rehab budget, you need to communicate it with your lender. Loan Ranger Capital will review your budget and approve it based on their underwriting criteria. They will also set up a draw schedule. This is a timeline of when and how much money they will release to you during the project.

You should maintain regular communication with your lender throughout the project. You should update them on your progress, any changes or issues that arise, and any requests for additional funds. You should also provide them with receipts, invoices, photos, and other documentation that prove the work done.

Loan Ranger Capital has a simple and streamlined draw request process that allows you to get your funds quickly and easily. You can submit your draw request online through their website or app, or by email or phone. They will typically inspect the property within 24 hours and release the funds within 48 hours.

Tip #3: Manage your contractors & Draws

Another key factor in managing your rehab budget and draw requests is managing your contractors. You should hire reliable, licensed, and insured contractors who have experience in working with investors and hard money lenders. You should also have a written contract with them that specifies the scope of work, timeline, payment terms, and expectations.

You should supervise your contractors closely and make sure they are following your instructions and meeting your standards. Also pay them promptly and fairly according to the agreed terms. You should avoid paying them upfront or in full before the work is completed and verified by the lender.

Managing your contractors well will help you avoid delays, disputes, and poor quality work that can jeopardize your project and your loan.

Tip #4: Stick to your plan

Finally, you should stick to your plan as much as possible. You should avoid making unnecessary changes or additions to your rehab budget or scope of work that can increase your costs or time frame. You should also avoid using your draw funds for anything other than paying for the rehab expenses.

Sticking to your plan will help you stay on track with your budget and schedule. This ensures that you complete your project successfully and profitably.

Conclusion Rehab Budget Draws

Managing your rehab budget and draw requests with Loan Ranger Capital is not difficult if you follow these tips. By creating a realistic rehab budget, communicating with your lender, managing your contractors, and sticking to your plan, you can make the most of your hard money loan and achieve your fix and flip goals.

If you are interested in applying for a hard money loan with Loan Ranger Capital, please visit their website or contact them today. They will be happy to assist you with your financing needs and answer any questions you may have.

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