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Construction Disbursement: What's The Deal? - YouTube
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what's going on guys it's dustin here
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with faster funds landing and here we
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are
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another week has went by since our last
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video and every week my goal is to share
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some information on how
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you can have success in your real estate
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investment career so today we're going
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to talk about construction disbursement
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what it is why we use it the ins and
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outs of it and all that fun stuff so
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let's first of all talk about what
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construction disbursement is
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with our loan program there are certain
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times where we can fund the entire
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purchase and the entire rehab of a
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project
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but that does not mean at closing we
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hand you a 50 000
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check and you can go right away with it
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right no we go through
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a third-party company that will do
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construction disbursements right so
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what is this so construction
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disbursements is where we take that
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rehab money that we've
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agreed upon crazy math let's just say 50
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000
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and then we're gonna put that with a
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third-party company that holds that in
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estrogen
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that money then is going to be dispersed
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to you
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after that certain part of that work is
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done so you have to provide
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that company the third-party company
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with lean waivers and receipts those are
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going to be
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important so you submit the main papers
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and receipts
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to the construction disbursement company
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the construction disbursement company
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then issues you a draw
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for equal to that amount okay so if you
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paid a contractor let's say it was for a
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roof
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and it cost ten thousand dollars you pay
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out of pocket for that ten thousand
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dollars
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and then you're gonna be able to get
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that draw and get that ten thousand
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dollars back
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so the big pro to that is gonna be just
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quicker access to your money so you
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don't have to wait until
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three months until the project's done
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and then when the project sells on your
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project
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does a refinance you get that money a
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lot
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quicker also one of the big pros with
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construction disbursement
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you have to be organized with it because
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the only way you're going to get your
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money back
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is by submitting these waivers and
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receipts each time right so that's
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really a good pro because in real estate
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investing some things can be chaotic so
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this is just another layer to keep you
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more organized
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so we talked a little bit about what it
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is so now why do we do it again
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the biggest reason to do it is because
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you get quicker access
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to your cash back instead of that you
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know even in this hot market you can
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sell a property
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real quick the reality is it still might
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be 30 to 45 days before that
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actually closes so now you can get your
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money back a little quicker
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hope that makes sense when you talk
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about the draws
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now there is a cost associated with this
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in this cosmic range depending on which
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dispersion company is
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anywhere between 750 to 950 depending on
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the situation and things like that
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so that is paid out of closing so
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remember that this is not a free service
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there is going to be a cost associated
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with it
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so to recap construction disbursement
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why do we use it we use it for the
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biggest reason here is just quicker
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access to your cash
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this way you don't have to have as much
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money on hand
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to finish a project okay
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keeps you organized what we have to do
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with that is we're going to make sure
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that we have to get lean waivers and
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receipts which only protects you
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in the case a contractor runs off
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anything like that
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you have the lane layers all right we
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talked about the cost anywhere between
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750 to 950 depending on the circumstance
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we talked about what draws are a lot of
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companies have a certain amount of draws
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that you can do
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so you don't want to every time you pay
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someone 500
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do a draw so you have to have this
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organized and make sure you have a
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system around it
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we talked about the why we talked about
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what it is guys i hope this makes sense
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again here at fast funds we want to make
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sure that we're offering you
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tons of advice and making sure that
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we're helping in your real estate
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investing career if you have
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an idea or a question about what you
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would like one of our videos to do
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just go ahead and comment them below and
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guys make it a great week we'll talk
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[Music]
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soon
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you
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