Processing rehab draws and organizing draw inspections are a time consuming post closing process for private lenders and their borrowers.
Making it easy for your borrowers to make draw requests is a great way to improve borrower experience and save you time.
This article goes over a step-by-step process on how to automate the rehab draw process for real estate private lenders and their borrowers.
1. Rehab Budget Template
Every lender should have a simple excel sheet template for borrowers to complete their rehab budget on. Your template should contain line items for each of the main construction items with significant cost. If you don’t have one already, you can use this one.
2. Have a Single Source of Truth
In Baseline, Excel formatted rehab budgets are compatible with the lender’s and borrower’s portal. When are borrower uploads a rehab budget, the borrower and the lender have the ability to interact with single version of the budget. This eliminates the need to email back and forth versions of the budget. When changes are made or requested on one side both parties are notified.
3. Amounts Allocated to Specific Line Items
For lenders, a common source of inefficiency is getting a lump sum draw request and then trying to determine which items of the rehab budget have been completed. In Baseline, a single draw request comes in with amounts requested on each line item and pictures supporting that draw. This makes it much easier to systematically review the draw request and compare it back to the originally approved scope of work.
4. Enable Remote Draw Approvals
For loans on straight-forward rehab projects, enabling no inspection draws can be an excellent way to improve efficiency. When there are no major structural changes to the property and the project is described as a “cosmetic rehab”, draw inspections are not usually necessary. Enable borrowers to upload pictures of their completed work and request rehab draws remotely.
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