Welcome back to another episode of Casey’s Corner — your go-to hotspot for all things real estate success. Whether you’re flipping your first house or your fifteenth, today’s topic is one you don’t want to miss. We’re diving into something that confuses a lot of investors… The Construction Disbursing System. Or, as we like to call it: “How to get your money when you need it most.”
What is Construction Disbursing?
When FasterFunds Lending gives you a rehab loan, those funds don’t just land in your account all at once (and that’s a good thing!). Instead, the rehab money is held by a third-party disbursing company — a neutral party that releases funds as work is completed on your project.
Think of it like your project’s own personal piggy bank… and you get to crack it open as you hit your milestones.
How to Get Your Funds — FAST
Here’s how to tap into those funds with speed and confidence:
- Complete a Phase of Work
Whether it’s demo day, new plumbing, or that fresh kitchen install — once you’ve wrapped up a chunk of work, you’re ready to request funds.
Example: You hire a vendor like Evans Flooring. They request that work be paid for upfront. You pay Evans Flooring and request an invoice. Once work is complete, have Evans Flooring sign a lien waiver to ensure that the work was done by your standards and Brad was paid. Once you have the invoice and lien waiver; you’re ready to request funds from disbursing.
- Document Everything
Take clear before-and-after photos. (not mandatory but recommended)
Keep your receipts and invoices organized.
These are your golden tickets to prove the work’s been done.
- Submit a Draw Request
Send your completed documentation to the disbursing company. The more complete and clean your request, the faster they can process it.
- Get Inspected
The disbursing company will send an inspector to verify work. No sweat — just another step in making sure everyone’s on the same page.
- Funds Are Released!
Once approved, the disbursing company cuts you a check to be mailed or picked up. If the contractor wants to be paid directly, they can visit the disbursing companies’ office, sign a lien waiver and a check will be given to them.
On to the next phase!
Pro Tips from the Field
Plan your draw schedule in advance Stay organized with receipts and timelines Keep open communication with your project manager and contractor Don’t wait until you’re out of cash — plan ahead for each draw’
Got more questions? Give us a call and let us walk you thorugh the process (636) 223-4262
