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Scope of Work Templates for Hard Money Borrowers: Line Items Lenders Approve
By Jason Taken · Principal, Jaken Finance Group
Scope of work template hard money — line-item SOW categories, contingency rules, draw milestones, and lender approval tips for fix-and-flip and BRRRR borrowers.
A scope of work (SOW) is not a contractor wish list — it is the underwriting document that ties your rehab budget to ARV, sets your draw schedule, and determines whether hard money lenders fund 85% or pass on the file. Generic “kitchen remodel $25K” lines get redlined; trade-by-trade line items with quantities get approved at close.
This guide provides scope of work templates for hard money borrowers — category structure, contingency rules, milestone mapping, and lender review patterns. For submission workflow, see how to submit a scope of work. Model total project economics on the fix and flip calculator.
Why lenders care about SOW granularity
| Vague SOW | Granular SOW |
|---|---|
| ”Full rehab $80K” | 47 line items by trade |
| ARV unsupported | Rehab reconciles to comp condition |
| Draw disputes | Milestone releases match inspection |
| Change orders kill margin | Contingency pre-approved |
Underwriting compares SOW total + purchase against ARV × LTV cap. Overbudget SOW = lower leverage or decline.
Master SOW template — category structure
Use this table as your Excel/Google Sheets skeleton. Adjust unit costs to market — these are Midwest/Southeast illustrative (2026).
Demo and site prep
| Line item | Qty | Unit | Unit cost | Extended |
|---|---|---|---|---|
| Interior demo — kitchen | 1 | lump | $2,800 | $2,800 |
| Interior demo — primary bath | 1 | lump | $1,600 | $1,600 |
| Debris haul-off | 3 | load | $650 | $1,950 |
| Dumpster rental | 2 | mo | $450 | $900 |
| Subtotal demo | $7,250 |
Rough mechanical
| Line item | Qty | Unit | Unit cost | Extended |
|---|---|---|---|---|
| Electrical panel upgrade (200A) | 1 | lump | $3,200 | $3,200 |
| Rough electrical | 1,450 | sf | $4.50 | $6,525 |
| Plumbing rough — kitchen/bath | 1 | lump | $4,800 | $4,800 |
| HVAC system replacement | 1 | lump | $7,500 | $7,500 |
| Subtotal rough | $22,025 |
Kitchen
| Line item | Qty | Unit | Unit cost | Extended |
|---|---|---|---|---|
| Cabinets (stock + install) | 18 | lf | $185 | $3,330 |
| Countertops — quartz | 42 | sf | $68 | $2,856 |
| Appliances — mid package | 1 | set | $2,400 | $2,400 |
| Backsplash tile + install | 32 | sf | $22 | $704 |
| Subtotal kitchen | $9,290 |
Baths
| Line item | Qty | Unit | Unit cost | Extended |
|---|---|---|---|---|
| Primary bath — full gut | 1 | lump | $9,500 | $9,500 |
| Hall bath — refresh | 1 | lump | $4,200 | $4,200 |
| Subtotal baths | $13,700 |
Finish and exterior
| Line item | Qty | Unit | Unit cost | Extended |
|---|---|---|---|---|
| Drywall repair + texture | 1,450 | sf | $2.80 | $4,060 |
| Interior paint | 1,450 | sf | $1.85 | $2,683 |
| LVP flooring | 1,100 | sf | $4.25 | $4,675 |
| Exterior paint | 1 | lump | $5,800 | $5,800 |
| Landscaping refresh | 1 | lump | $2,200 | $2,200 |
| Subtotal finish | $19,418 |
Contingency and permits
| Line item | Qty | Unit | Unit cost | Extended |
|---|---|---|---|---|
| General contingency (10%) | 1 | lump | $7,168 | $7,168 |
| Building permits + fees | 1 | lump | $2,400 | $2,400 |
| Subtotal contingency | $9,568 |
Grand total SOW: ~$81,251
Full submission process: how to submit a scope of work.
Draw milestone mapping
Align SOW categories to draw releases — lenders inspect against approved lines, not “progress feels good.”
| Draw # | Milestone | SOW categories funded | Typical % |
|---|---|---|---|
| 1 | Close + demo start | Demo, dumpster | 15%–20% |
| 2 | Rough-in complete | Electrical, plumbing, HVAC rough | 25%–30% |
| 3 | Drywall / mechanical trim | Kitchen cabinets, bath rough | 25%–30% |
| 4 | Finish | Paint, floor, appliances | 20%–25% |
| 5 | Final | Landscaping, punch list | 5%–10% |
Draw detail: fix and flip draw process guide.
SOW templates by project tier
Cosmetic tier ($35K–$55K)
| Category | % of budget |
|---|---|
| Paint / floor | 35% |
| Kitchen refresh | 25% |
| Bath refresh | 20% |
| Mechanical touch | 10% |
| Contingency | 10% |
Best for: Indianapolis bungalows, collar-county SFR — see best neighborhoods flip Indianapolis 2026.
Mid tier ($55K–$95K)
Full template above. Best for: Chicago South Side brick, Charlotte value-add.
Heavy tier ($95K–$150K+)
Add: foundation, roof, structural, addition line items with engineer letter attached.
Best for: Chicago two-flats — Chicago two-flat financing.
Lender red flags in SOW review
| Red flag | Lender response |
|---|---|
| No contingency | Require 10% add |
| Rehab > 50% of purchase | ARV scrutiny |
| GC bid missing | Hold approval |
| Permit line $0 in Chicago | Reject or revise |
| Single lump-sum line | Redline to trades |
Product context: fix and flip loans Chicago · what is a hard money loan.
Worked example — SOW vs ARV reconciliation
| Amount | |
|---|---|
| Purchase | $285,000 |
| Approved SOW | $81,251 |
| All-in | $366,251 |
| ARV (appraisal) | $425,000 |
| Lender ARV cap (72%) | $306,000 |
| Max loan on ARV | $306,000 |
| Max LTC (88%) | $322,301 |
Binding constraint: ARV cap at 72% — not LTC. SOW accuracy directly affects leverage.
Run scenarios on the fix and flip calculator.
Attachments checklist
Submit with SOW per how to submit a scope of work:
- GC signed proposal matching line totals
- GC license + insurance COI
- Interior/exterior photo set
- ARV comp summary (3 sold)
- Permit pre-application (if required)
- Timeline Gantt (start → CO)
Common borrower mistakes
| Mistake | Fix |
|---|---|
| Copy-paste SOW from last deal | Re-line every property |
| Underbid to win loan | Inspectors reject draws |
| No change-order process | Pre-approve contingency use |
| Skip exterior photos | ARV support weakens |
| Submit after close | Get approved pre-close |
Bottom line
Scope of work templates for hard money borrowers succeed when line items match inspection milestones, contingency is explicit, and totals reconcile to ARV. Start from the category template above, submit per how to submit a scope of work, and fund through fix and flip loans Chicago or your state hub.
Next reads: Fix and flip draw process · Chicago two-flat financing · Fix and flip Chicago mid-year check