What Is a Draw on a Fix and Flip Loan?

Your contractor's ready to start on the flip. Then you find out the rehab money isn't sitting in your account.

Most fix and flip lenders hold the repair budget back and pay it out in draws. A draw is a payment the lender releases after a stage of work is done. You finish the demo or the roof, ask for a draw, and the lender usually sends someone out to check the work before the money moves.

So you'll often front some of the cost yourself and get paid back. Plan for that gap. Your contractor needs to know how it works too, or you'll have a tense week.

Also, keep your scope of work detailed, line by line. Lenders release draws against it, and a vague budget slows every payment.

SixtyFour West places your deal with lenders whose rules it fits.