There are two common ways to pay for a rehab. A traditional draw schedule takes a deposit up front and releases the rest at milestones like "rough-in complete." A weekly labor draw schedule spreads labor payments across the weeks the work is actually happening.
Our guide to weekly labor draws covers how the model works. This post puts the two schedules side by side on the same project, then shows how to use a weekly draw schedule to run the rehab itself.
The example project
All numbers below are a hypothetical example, not a quote.
- 1,400 sq ft single-family house
- Full rehab: demo, new kitchen, two bathrooms, flooring throughout, paint, new HVAC
- Budget: $52,000 ($36,000 labor + $16,000 materials)
- Planned timeline: 9 weeks
Traditional 4-draw schedule
The contractor quotes $52,000 with materials included and asks for a common milestone split:
| Draw | Amount | When | Cumulative paid | What triggers it |
|---|---|---|---|---|
| Deposit | $15,600 (30%) | Signing | $15,600 | Nothing built yet |
| Draw 2 | $13,000 (25%) | About week 4 | $28,600 | "Rough-in complete" |
| Draw 3 | $13,000 (25%) | About week 7 | $41,600 | "Finishes in progress" |
| Final | $10,400 (20%) | Completion | $52,000 | "Project complete" |
The structure sounds reasonable: payments tied to progress. The trouble is the triggers. "Rough-in complete" is a judgment call. Most investors aren't experts in every trade, can't easily check the plumbing and ductwork before it's covered, and approve the draw because the project needs to keep moving.
Weekly labor draw schedule
Same project, same total. Labor is paid in $4,000 weekly draws (this example uses the minimum; larger projects get larger draws). You buy the $16,000 of materials yourself, directly from suppliers at cost, as each phase needs them.
| Week | Planned work | Draw | Cumulative labor paid |
|---|---|---|---|
| Before start | First draw reserves the start date | $4,000 | $4,000 |
| 1 | Demo, dumpster | $4,000 | $8,000 |
| 2 | Framing, rough electrical | $4,000 | $12,000 |
| 3 | Rough plumbing, HVAC rough | $4,000 | $16,000 |
| 4 | Insulation, drywall hang | $4,000 | $20,000 |
| 5 | Drywall finish, flooring start | $4,000 | $24,000 |
| 6 | Cabinets, flooring | $4,000 | $28,000 |
| 7 | Tile, countertops, paint | $4,000 | $32,000 |
| 8 | Fixtures, trim, punch list | $4,000 | $36,000 |
The draw covers labor only, and every payment is credited toward the $52,000 total.
Money paid vs. work in place
The useful comparison isn't the total. It's how far ahead of the work your money is at each point. Call that the overpayment gap.
| Point in project | Traditional: paid to contractor | Weekly: labor paid | What's done (example) |
|---|---|---|---|
| Before work starts | $15,600 | $4,000 | Nothing |
| About week 4 | $28,600 | $16,000–$20,000 | Rough-ins, some drywall |
| About week 7 | $41,600 | $28,000–$32,000 | Most finishes underway |
| Completion | $52,000 | $36,000 labor + $16,000 materials | Finished house |
In the traditional schedule, a large share of the budget is in the contractor's account before anything is built, and each milestone payment tends to land ahead of the work it's supposed to cover. With weekly draws, you pay one draw ahead to reserve the start and then roughly keep pace with the work. The materials you've bought are yours, on site or installed.
That matters most when something goes wrong. If a quality problem shows up around week 5 on the milestone schedule, you're arguing about work that's already been paid for. On a weekly schedule, you're talking about one week of work, and you found out that week.
The "rough-in complete" trap
Milestones hide problems between check-ins. A contractor calls rough-in done and asks for the second draw. The framing looks done. The wiring looks roughed in. Whether the drain slopes are right or the ducts are routed properly is hard to tell on a walkthrough, so you pay. If the trim-out crew later finds the rough-in wasn't right, you're paying to redo work you already paid for.
Weekly review works in smaller pieces. "This week the crew framed the primary bedroom and bath" is easy to check. "Rough-in is complete" is not.
Using the draw schedule to keep the rehab on track
A weekly draw schedule is also your project plan. Each row is a week of planned work, a payment, and a running budget total. Used well, it does four jobs.
A weekly progress check. Each week, compare what was done with what that week's row said. On plan: move on. Behind: ask what slipped, why, and how it gets made up. Catching a one-week slip is easy. Catching a four-week slip at a milestone is not.
A budget tracker. The cumulative column shows where spending should be at every point. If your running total, including any approved scope changes, is drifting above plan by week 4, you have time to respond: adjust later scope, draw on your contingency, or accept the variance. Under a milestone schedule you may not see the drift until most of the money is spent.
A communication rhythm. A weekly payment creates a weekly conversation. Issues come up while they're small, instead of sitting for weeks behind unanswered texts.
A way to run several projects. If every rehab has a schedule in the same format, you can review them all at once each week and see which one needs attention.
This only works if the schedule is built on a clear scope of work. The draw protects you only when you know what each week was supposed to deliver.
When milestones make sense
Milestone payments can be fine with a contractor you've done many projects with, or on a small, short job where a week-by-week plan adds little. For a full rehab, a new contractor, or several projects at once, the weekly schedule gives you earlier warning and a clearer picture of where your money is.
If your contractor insists on a large deposit first, read why big upfront deposits hurt flip margins.
How we work
Seller's Little Helpers is a licensed and insured general contractor for real estate investors in Chicagoland. Our crews handle every trade. After a $150 scope visit, you get a proposal within 3 business days with the full project price, timeline, weekly draw amount, and material list. The first draw reserves your start date, and each week Mason sends an update with photos, progress against the timeline, draw and budget status, and any decisions that need your sign-off. See pricing.