When you finance a renovation project with a Fix & Flip loan, your lender doesn’t release the full rehab budget upfront.
Instead, funds are distributed in stages called “draws” — as specific parts of the renovation are completed.
This structure protects both the investor and the lender, ensuring that funds are used efficiently and progress aligns with the approved budget.
💡 What Is a Draw Schedule?
A draw schedule outlines how and when rehab funds will be released during your project.
Each draw corresponds to a milestone — such as demolition, framing, roofing, or interior finishes.
Draw Stage | Common Example | % of Total Rehab Budget |
Draw 1 | Demo, foundation, and framing | 20% |
Draw 2 | Roofing, plumbing, and electrical rough-in | 25% |
Draw 3 | Drywall, insulation, windows, exterior work | 25% |
Draw 4 | Interior finishes, flooring, paint | 20% |
Final Draw | Final inspection & completion | 10% |
This is an information.
Your specific draw schedule depends on your scope of work (SOW) and will be finalized before closing.
🧾 How the Draw Process Works
Complete Work: You or your contractor finish a defined stage of the renovation.
Submit Draw Request: Provide invoices, receipts, and photos documenting completed work.
Inspection: The lender sends a third-party inspector to verify progress.
Funds Released: Once approved, funds are wired to you or your contractor within a few business days.
Funds are usually drawn from an escrow account and disbursed only after lender approval — ensuring proper oversight throughout the rehab.
⚙️ Typical Requirements for Draw Releases
Completed draw request form with updated cost breakdown
Photos or inspection report verifying completed work
Lien waivers or invoices from contractors/subcontractors
Proof that previous draw funds were spent appropriately
This is a tip.
Keep communication open with your project manager or draw coordinator — fast responses mean faster funding.
📈 Pro Tips for Smooth Draw Management
Build a realistic timeline before closing and stick to it
Group smaller jobs together to reduce the number of draw requests
Maintain a clean paper trail for all rehab expenses
Schedule inspections proactively to avoid project delays
Only request draws after clearly defined milestones are completed
🧠 Why Draws Protect Investors
While the draw process might feel slower than getting funds all at once, it helps:
Keep contractors accountable
Prevent misuse of funds
Track project progress objectively
Protect your investment and the lender’s capital
The draw process ensures your project stays funded, inspected, and profitable — from the first hammer swing to the final sale.