When a flip in Texas started to fall apart, smart structure brought it back from the brink.

Jet Lending funded a flip of a single-family home in Ingleside, Texas. It was appraised at $216,000, with a rehab budget set at $70,000. The investor issued a loan for $116,640.

On paper, everything was penciled out. The borrower, based out of state, appeared motivated and ready to execute. The strategy was clean: buy, fix, flip.

Then came the execution.

The Breakdown

The borrower hired a local contractor, sent money upfront, and expected progress. Instead, the jobsite stalled almost immediately. Draw inspections revealed minimal work completed. The borrower was making interest payments on a non-performing project. Meanwhile, the contractor was unresponsive.

From day one, our inspector flagged concerns, noting the borrower was sending money to a contractor he hardly knew and who was probably using the funds on other jobs. Jet Lending was getting strung along, and the clock was ticking on interest.

First, we stopped the draw process: No work, no capital. But the borrower bypassed the system, sending another $20,000 directly to the contractor against advice. In return, the contractor installed what could generously be valued at $2,500 worth of insulation and vanished. Again.

This wasn’t just a cost overrun. It was a collapse of operational control.

Regroup and Rebuild

With funds drained and progress stalled, the borrower admitted he was out of money and options.

This is where most lenders would cut their losses and walk away. But Jet Lending took a different approach: We took control.

Our draw team—Kevin, Summer, Johnny, and Eddie—devised a recovery strategy. Summer, the draw coordinator, outlined the pivot: A $5,000 disbursement so the borrower could fly in a new out-of-state contractor. Once Kevin confirmed the new contractor’s presence on-site, another $10,000 would be released.

Micro-Tranche Funding

These moves marked the start of a milestone-based micro-tranche funding system:

Capital released only upon performance

On-site verification of labor and materials required before each disbursement

No funds moved based on promises—only proof

Jet Lending didn’t increase the risk; we redistributed it through structure.

Local Leverage in Action

Jet Lending also tapped its Ingleside-area network to locate reputable contractors. Kevin made multiple site visits to map out which elements were incomplete, where funds had truly gone, and how to stabilize the project.

Our inspectors returned with hard data. Our coordinator enforced the revised draw protocol. Our executive team assessed exposure.

This was no longer just a project; it had become a case study in real-time asset management.

The Turnaround

To his credit, the borrower followed the new plan. The new crew arrived, and he stopped trusting blindly. Under a tighter structure, the flip regained traction.

Yes, timelines slipped. Yes, the profit margin was squeezed. But the deal wasn’t a loss: The project was salvaged, and the borrower learned important lessons.

Traditional lenders might have cited breach and walked away. Jet Lending didn’t. Instead of cutting the borrower off, our team focused on protecting the asset—and by extension, the borrower’s outcome.

What Changed

From this experience came lasting changes to our internal systems that marked an institutional shift:

Enhanced oversight for out-of-state borrowers

Verification of all new contractors via network referrals or proof-of-performance

Default use of milestone-based draw disbursements for suspect projects

Micro-tranche funding approval only upon visual inspection and labor/material match

Capital freezes for any projects with unverified draw requests

We also launched an internal “Project Health Scorecard” that scored:

Speed of work

Match between draw request and visible progress

On-site labor and material presence

Percentage of budget burned

Project scoring under 70 triggers a pause-and-review, not as punishment but as protection.

Upon reflection, the borrower acknowledged his mistakes. He realized he moved too fast and hadn’t vetted the contractor or maintained oversight. But we didn’t just tell him what went wrong. We gave him a roadmap to fix it. By sticking with the new process, the project was completed. Both the borrower and Jet Lending avoided a total loss.

Build Systems, Not Just Deals

The unglamorous part of lending is what happens when borrowers’ misstep, contractors underperform, and projects slip out of control. A process like the one we have in place proves its worth after the funding.

The lesson? Don’t fund trust. Fund control.

Lenders should view every troubled deal as more than a crisis—it’s an opportunity to sharpen systems, elevate teams, and protect long-term relationships. When lenders stay engaged and solve problems with their borrowers, they don’t just save capital—they build loyalty.

The more successful your borrower becomes, the more likely they are to come back and do another deal. Repeat borrowers are built through outcomes, not origination. Don’t run from bad deals once you’re in them. Instead, embed case studies like this into your internal training, so your team improves with every challenge.

The best lenders don’t just close loans. They create systems that close gaps—and finish properties.