Construction draw inspection checklist for private lenders

Not legal advice. This checklist is for business-purpose construction and fix-and-flip loans by private and hard money lenders. It is not an inspection standard, and it does not replace a site visit by an inspector you trust. Lien deadlines and waiver rules below come from the Colorado and Virginia statutes linked at the bottom, read on 2026-10-22.

• Every line in the draw request maps to a line in the approved budget (the schedule of values).
• For each line: budget, drawn before, requested now, and what would be left. A line drawn past 100% needs a change order you approved.
• Watch the contingency line: a borrower moving money into it, or out of it into finished work, should say why.
• Check the math: the requested total equals the sum of the lines, and retainage is held the way the loan documents say.

• Each requested line has invoices or receipts behind it, from the vendor named, for this property.
• Invoiced amounts add up to at least the amount requested for the line.
• No invoice appears in a past draw too (same vendor, number and amount).
• Stored materials: only if the loan allows them, with proof they are on site or bonded and insured where stored.

Ask for a waiver from every contractor and supplier who was paid out of the last draw, for at least the amount they were paid. A missing waiver is a reason to hold that part of the next release. See lien waivers for construction lenders for the Colorado and Virginia rules.

Photos should show the work being paid for, taken at the property and after the last draw. Straight-from-the-phone JPEGs keep the date taken and the GPS position; screenshots and messaging apps often strip them. A photo reused from an earlier draw is a red flag. See photo checks for construction draws.

Look up the building permits at the address on the city or county portal. Work that needs a permit (structural, electrical, plumbing, mechanical, roofing in many places) should have one issued, and inspections should be moving. A draw for work with no permit is a question for the borrower before money goes out.

• Release in full, release in part (line by line), or hold, and write down why.
• Keep the request, invoices, waivers, photos and your decision together in the loan file. The next draw is checked against this one.

shinnslist's Draw Desk runs these checks in your browser and writes a one-page release recommendation. The lender makes the call.

What does a lender check before releasing a construction draw?

The request against the approved budget, the invoices against the request, lien waivers from everyone paid out of the last draw, dated site photos of the work, and the building permits at the address.

How long do contractors have to file a mechanic's lien in Colorado?

Under C.R.S. 38-22-109, most claimants must record a lien statement within four months after their last labor or materials, and must serve a notice of intent at least ten days before filing. Laborers by the day or piece have two months after completion.

How long do contractors have to file a mechanic's lien in Virginia?

Under Va. Code 43-4, the memorandum of lien must be recorded within 90 days from the last day of the month in which the claimant last worked or supplied materials, and may not cover work or materials furnished more than 150 days before the last day of work.

Is a draw review an inspection?

No. A document review checks that the paperwork agrees with itself and with public records. It does not replace a site visit by an inspector.

• C.R.S. 38-22-109, Colorado mechanics' lien statements (FindLaw), read October 22, 2026
• Va. Code 43-4, memorandum of mechanics' lien (Virginia Law Library), read October 22, 2026