The words that come up between your lender, your building department and your contractors, in plain English, with what they mean for your schedule and your money.
Lender draws
How rehab money gets from your lender to your contractors.
A payment of rehab money your lender releases in stages as the work gets done, usually after an inspection or photos show the stage is complete.
In most fix-and-flip loans the renovation budget is not paid out at closing. The lender holds it back and releases it in draws: you finish a stage of work, request the draw, the lender verifies the work (a site visit, photos, or both), then funds it. Many lenders reimburse work that is already done rather than paying up front, so you need cash to carry each stage until its draw arrives.
In Flip On Time: The Draws view groups your budget lines into draws and shows which lines are ready to request.
Rehab holdback
The part of your loan set aside for the renovation. It is not paid at closing; the lender releases it to you in draws.
If your loan is $230,000 with a $68,000 rehab holdback, you get $162,000 toward the purchase at closing and the remaining $68,000 arrives over the project as draws are approved.
Draw schedule
The plan that splits your rehab budget into stages (draws) and says which work each one pays for.
Lenders usually agree the schedule before closing, for example: demolition and roof in draw 1, rough-in trades in draw 2, finishes in draw 3. Work done out of order may not be fundable until its stage comes up.
In Flip On Time: Set it up in project setup or the Draws view; each budget line belongs to one draw.
Draw request
What you send the lender to release a draw: the completed line items with invoices, lien waivers, photos and passed inspections.
Requirements vary by lender. Missing paperwork is the most common reason a draw is delayed, which is why it pays to collect each item as the work finishes rather than at the end.
In Flip On Time: Each draw has a lender-ready packet (Pro) listing every line with its inspection, invoice, waiver and photos.
Lien waiver
A signed form from a contractor or supplier giving up their right to put a lien on the property for work they have been paid for. Lenders usually want one for every paid line.
A conditional waiver takes effect once the payment actually clears; an unconditional waiver takes effect when signed, so contractors sign it only after they are paid. Progress waivers cover a payment partway through the job; final waivers cover the whole job. Some states require specific statutory forms.
In Flip On Time: Track each line’s waiver as Not requested, Requested or Received.
Retainage
A percentage held back from each payment until the job is finished, to make sure the work gets completed. Common on larger construction jobs; many flip lenders use none.
With 10% retainage, a $10,000 invoice releases $9,000 now and $1,000 at completion.
In Flip On Time: Set your lender’s retainage in the draw rules; requestable amounts account for it.
Permits and inspections
What the building department needs before, during and after the work.
Approval from your city or county building department to do regulated work such as structural, electrical, plumbing or mechanical. Work usually cannot start, or be inspected, until it is issued.
Cosmetic work (paint, flooring, cabinets in place) often needs no permit, but rules vary by jurisdiction. Unpermitted work can delay a sale when the buyer’s inspector or lender finds it.
In Flip On Time: The Permits view tracks each permit’s review time, days late and expiry countdown.
Corrections requested
The plan reviewer has comments to fix before the permit can be issued. Nothing moves until you resubmit, and the review clock often restarts.
Permit expiration
Permits lapse if work or inspections stall too long. Many US jurisdictions follow the model building code: 180 days without starting work or without an approved inspection. Check yours.
An expired permit usually has to be renewed, sometimes with a fee, before inspections can continue.
In Flip On Time: You get a warning a set number of days before each permit expires (your draw rules).
Building inspection
A visit from the building inspector to check the work against code at set stages. Failing one means fixing the work and booking a re-inspection.
Inspection sequence
The order inspections have to pass in: footings before framing, rough-ins before insulation, insulation before drywall, and so on. One late inspection holds up every one after it.
In Flip On Time: The Inspections view shows the chain, what each inspection is waiting on, and which draw it unlocks.
Rough-in inspection
Checks electrical, plumbing and mechanical work while the walls are still open. It has to pass before insulation and drywall can go up.
Re-inspection
A second visit after a failed inspection. It usually costs a fee and adds days of waiting, and everything that depends on it waits too.
In Flip On Time: Re-inspection fees are added to your delay cost.
Finaled
The final inspection has passed and the permit is closed. Buyers and their lenders often ask for proof that every permit is finaled.
Certificate of occupancy (CO)
A document some jurisdictions issue after the final inspection, confirming the building is safe to live in. Not every renovation needs a new one.
Loan and holding costs
The numbers that decide what each day of the project costs you.
What it costs to own the property each day you hold it: loan interest, property taxes, insurance and utilities. Every day of delay adds them again.
In Flip On Time: Flip On Time turns them into a daily figure and prices each day of delay with it.
Dutch interest
Interest charged on the full loan from day one, including rehab money the lender has not released yet. A non-Dutch (disbursed) loan charges only on money already drawn.
On a $230,000 loan with a $68,000 holdback at 11.5%, Dutch interest is about $72 a day from closing; disbursed interest starts near $51 a day and rises as draws fund.
In Flip On Time: Choose Dutch or disbursed in the loan terms; the daily burn follows it.
Points
An upfront lender fee quoted as a percentage of the loan: 2 points on a $200,000 loan is $4,000.
Loan maturity
The date the loan must be repaid in full. Short-term flip loans often run 6 to 12 months; going past maturity can mean an extension fee or default terms.
Extension fee
What the lender charges to push back the maturity date, usually a percentage of the loan.
In Flip On Time: If your projected sale runs past maturity, the fee comes off your projected profit.
After-repair value (ARV)
What the property should sell for once the renovation is done. Lenders size many flip loans from it.
In Flip On Time: Enter it as the projected sale price.
Days on market
How long the finished property takes to sell once listed. You keep paying holding costs the whole time, so plan for it.
Your holding costs per day: interest, taxes, insurance and utilities added together. It is what one more day of delay costs.
Schedule slippage
How many days the project has slipped. It is set by the single worst permit or inspection delay (the critical path), not the sum, because delays on parallel tracks overlap.
Maturity cushion
The days between your projected payoff (the sale) and the loan maturity date. A small cushion means one more delay could cost an extension fee.
Requestable now
Money you can ask your lender for today: the lines in a draw whose inspection, invoice, lien waiver and photos are all in, less any retainage.
See these terms on a real flip.
The demo shows permits, inspections and draws working together, with what each delay costs.
Definitions are general and for information only. Inspection sequences, permit rules and draw requirements vary by jurisdiction and lender. Flip On Time records what you enter. Not legal or financial advice. Questions about a term? See the home page FAQ.