A weekly labor draw is a simple idea. Your contractor quotes the full project price up front. Instead of paying 30–50% of it as a deposit and the rest at milestones, you pay a set amount each week while the work is in progress, and every payment is credited toward the project total.
Same total cost. Different risk. This guide covers how it works, what it does to your exposure and cash flow, and how it fits with a hard money lender's draws. It brings together what we used to cover across four separate articles.
How it works, week to week
- Scope and price. A scope visit produces a scope of work and a proposal with the full project price, the timeline, and your weekly draw amount.
- Reserve your start date. Your first weekly labor draw locks in the start. Crews mobilize, and you buy materials from the lists we provide.
- Work, report, draw. Each week the crew works the plan, and you get a progress update with photos, progress against the timeline, and draw and budget status. You pay that week's draw, and it's credited toward your total.
- Repeat until the punch list is done. Payments run while work is in progress, until the project is complete.
At Seller's Little Helpers, weekly labor draws are sized to each project's contract, scope, schedule and labor requirements, with a $4,000 weekly minimum. Materials are purchased separately, by you, at cost.
A worked example: 40% deposit vs weekly draws
Take a $60,000 rehab: $40,000 of labor over ten weeks and $20,000 of materials.
The deposit model. The contractor asks for 40% up front: a $24,000 check before anyone picks up a tool. If the crew shows up three days a week by week four, or the rough electrical looks wrong at week six, your leverage is already gone. They have your money, and the next milestone payment is the only lever left.
The weekly draw model. In this example the weekly draw is $4,000, the minimum; larger projects get larger draws. Your first draw reserves the start date. After that you pay $4,000 a week while the work progresses, and you see the week's progress before the next week begins. By the time you've paid $24,000 in labor, five weeks of work have been done and reported.
| 40% deposit | Weekly labor draws | |
|---|---|---|
| Paid before work starts | $24,000 | $4,000 (first draw) |
| When you see progress | At milestones, or when you visit | Every week, in your update |
| Labor cost across the project | Same | Same |
| Materials | Often bundled and marked up | Bought by you at cost |
Why it changes the contractor's incentives
A deposit rewards getting hired. The money is in the contractor's account before the work starts, so the incentive to show up rests on reputation and the next milestone. A weekly draw spreads the reward across the job: a crew that works this week is paid this week. When a contractor is juggling several jobs, your project isn't the one that gets pushed back because it already paid.
The good contractors don't mind. Weekly payments are steady cash flow for them, with no arguing over whether a milestone was really hit. The ones who insist on a big deposit before they start are often the ones who need your money to fund other jobs.
What it does to your cash flow
Across a portfolio, deposits tie up capital before any work is verified. Three rehabs at $50,000 each with 30% deposits put $45,000 into contractors' bank accounts on day one, with milestone payments landing on the contractors' schedules, not yours.
With weekly draws, your outlay is predictable: the weekly draw for each active project, due weekly, for as long as the scope says. That's capital you can keep for the next acquisition, for earnest money, or for reserves. And you can plan it, which is hard to do when a milestone payment depends on when the contractor decides a milestone is done.
Weekly draws and hard money
Most hard money and bridge lenders release rehab funds as work is documented. A weekly draw schedule lines up with that naturally: the work gets done, the weekly update documents it, and you request your lender's draw against it. With a large deposit, you're fronting that money yourself until the lender sees enough work to reimburse it.
Need draw packages formatted for your lender? Our lender documentation add-on assembles progress photos, draw packages, and inspection reports (1% of project value, $500 minimum). How lender draws and contractor draws fit together.
What weekly draws don't do
They don't lower the project price. They don't replace a clear scope of work: the draw only protects you if you know what each week was supposed to deliver. And they don't make a bad contractor good. They make it much cheaper to find out.
Compare weekly draws with a traditional draw schedule, or see SLH pricing.