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Scope Of Work


Last updated: March 1, 2024


The Scope Of Work is a document prepared by you (the real estate investor) or your general contractor to communicate, in detail, all of the work planned for a fix and flip, fix and rent or ground up construction project.


The scope of work is one of the most important loan processing documents because it is used by the appraiser to determine the after repair value (ARV) of the property. Your private lender (underwriter, loan committee) uses the ARV opinion from the appraisal report to determine the loan amount, and whether or not the deal even makes sense to fund.


Avoid Low Appraisal With A Detailed Scope Of Work


If your scope of work is not thoughtfully prepared, your appraisal may come back low and the following can happen:


  • your loan may not get approved (deal economics don't work)
  • you need to get the property re-appraised or request revisions from the appraiser (time consuming and seller can back out)
  • you need to fund more of your project out of pocket because of a lower than anticipated loan amount

Free appraisal DSCR loan


Scope Of Work Example




Scope Of Work Best Practices


The most important things:


Provide a detailed narrative


See "Project Information" section above, this is where you share your narrative when you work with OfferMarket as your private lender.


This is your opportunity to tell the story of this project and convince the appraiser and underwriter that you know what you're doing. Confidently pitch what you plan to do to increase the value of the property in a cost effective manner.


Be specific about each component of your rehab


You may be busy and this may be the last thing you want to be spending time on, but the scope of work really is one of the best uses of your time. Not just to optimize your ARV, but also to think through the nitty gritty details of your project. Thoughtful completion of your scope of work will ensure your project is properly budgeted, executed and your profit (flip or cash out refi) is optimized.


Make sure your numbers add up


You would be surprised how often borrowers say the rehab budget is one amount (i.e. $100,000) but then provide a scope of work with sections that add up to a different amount (i.e. $111,000).