Permits, Inspections, and Payouts: A Lender’s Perspective on Rehab Readiness

Quick answer:

For rehab projects, lenders like Silverton Capital don’t just look at the property or your contractor—they look at how prepared you are to manage timelines, handle city requirements, and stay on top of your draw schedule. That starts with permits, inspections, and clear documentation.

If you’re flipping or rehabbing a property in Dallas, Tarrant, or Collin counties, here’s what you need to know about aligning with your lender from day one.

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Why Rehab Readiness Matters in Private Lending

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Every real estate investor loves to say they’re “ready to start rehab.” But from a lender’s perspective, that means something specific:

• Have the permits been pulled?
• Is the scope of work aligned with your timeline and draw schedule?
• Are your contractors licensed and insured?
• Are you prepared for inspections from the city and from us before each draw?

When we fund a rehab project, we’re not just betting on the deal—we’re betting on your ability to execute efficiently. That’s where readiness becomes key.

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Permits: The Foundation of a Legitimate Rehab Plan

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Whether you’re replacing a roof or gutting a duplex, pulling permits isn’t just about code compliance—it’s about lender confidence.

Here’s why it matters:

• Without proper permits, a project can be delayed, fined, or shut down.
• Unpermitted work may be uninsurable—or unsellable.
• Appraisers and buyers could raise red flags later.
• Some jurisdictions require permit sign-offs for certificate of occupancy or final sale.

As your lender, we don’t need permits for every cosmetic update—but if your scope includes:

• Electrical or plumbing changes
• Structural work
• Roof replacement
• Major additions or layout reconfigurations

…we’ll likely ask: Where’s the permit?

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💡 Pro Tip: If you’re not sure what requires a permit in your municipality, ask your contractor—or better yet, call the city before you apply for your loan.

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Inspections: Both City and Lender Want to See Progress

Inspections serve two purposes during a rehab project:

1. Code compliance inspections (done by the city)
2. Draw inspections (requested by your lender)
   
   

At Silverton Capital, we often require a quick third-party inspection before releasing funds on your rehab draw. This isn’t to slow you down—it’s to verify:

• The work completed matches the scope of work
• Materials are on-site and ready for the next phase
• The contractor is progressing as expected
• The job site is secure and active

These inspections are typically scheduled within 24–48 hours and don’t cost much, but they’re essential for releasing funds and keeping your project on track.

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Draw Payouts: How Rehab Loans Actually Flow

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In a rehab loan, we don’t give you all the money upfront. Instead, we disburse funds in draws, based on completed work and upcoming material needs.

A typical draw structure might look like this:

1. Initial draw at close (covering part of purchase and maybe a small repair allowance)
2. Midpoint draw once major systems or demo is complete
3. Final draw when finishing touches and inspections are done

To release each draw, we require:

• A draw request form (we provide this)
• Photos of completed work
• Any relevant receipts or invoices
• Optional: third-party inspection confirmation

The more organized you are, the faster we pay out.

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How to Stay Ahead of Lender Expectations

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Here are a few ways to keep your lender—and your project—moving forward:

• Create a timeline with milestones tied to draw stages
• Document everything—permits, receipts, contracts, photos
• Communicate early if something changes (contractors, scope, timeline)
• Be realistic about inspections and permit processing times
• Submit complete draw requests to avoid back-and-forth delays

If you're not sure what we’ll need to see—just ask. We’d rather answer early than delay a draw later.

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Final Thoughts: Rehab Readiness Builds Trust

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A good deal with a sloppy execution plan doesn’t get funded. A solid deal with a tight, well-documented plan? That gets attention—and approval.

When you show us that:

• Permits are in hand
• Inspections are scheduled or passed
• Draws are planned and reasonable

…you send a clear message:

“I’m a professional investor. I’m here to close, build, and exit successfully.”

That’s exactly who we want to lend to.

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Ready to fund your next flip or rehab project?

Apply now with Silverton Capital. We lend throughout Dallas, Tarrant, and Collin counties, and we move quickly when borrowers are ready.

This article is for informational purposes only and is not intended to serve as legal, financial, or investment advice. Please consult with a licensed professional before making financial decisions.