How Lenders Can Leverage Remote Project Monitoring
When a construction project you’re funding needs more money, an on-site inspection doesn’t always need to come first. Remote project monitoring is becoming a popular way to check on a construction project’s progress without an inspector needing to visit in person.
For lenders feeling apprehensive about relying on information collected through virtual site inspections, let’s dive into how remote monitoring works when it’s most useful, and why it can be a trusted tool to streamline and improve the construction lending process.
What is remote project monitoring in construction?
Remote monitoring enables construction lenders to gain insight into a project’s progress without an inspector visiting on-site. Often designed to supplement an in-person inspection, remote monitoring lets you tap into a network of trusted individuals related to the project to capture and upload photo evidence to a shared system. Lenders can leverage this type of progress inspection to expedite draw requests or for ongoing monitoring along the way, without the added cost or time that comes with in-person inspections.
We’ve had cameras for years that can track progress on a project, but what was lacking was the ability to know that the photo was accurate and taken at the actual construction site. Advanced geolocation technology has now given us the ability to know exactly when and where a photo was taken. A photo captured with a smartphone, for instance, is going to store the location, date, and time that the picture was taken. This offers clear proof that the photo is indeed documenting the progress of the correct project your team is financing—and will stand up to audits as well.
When remote monitoring comes in clutch
Expedited funding draws
Getting an inspector to make a site visit takes time and planning. Once the in-person site visit takes place, it can take several days for an inspection report to be written and submitted to the lender. This can lead to delays in draws as the lender waits for verification that specific portions of the project have been completed. A virtual site inspection that’s verified through geolocation and date/time stamps provides the progress verification that’s needed for fund disbursement.
This can especially come in handy between on-site inspections. For example, if a project makes speedy progress just a few days after an on-site inspection, but the budget doesn’t allow for another in-person visit, a remote project inspection can offer enough proof of progress to include the needed funds in the next draw.
Visiting rural properties
While many inspection service companies will have a hefty network of vetted inspectors, some projects may be too rural to bring out an inspector in a timely manner, or the inspector may not have the equipment needed to access more rustic properties. Remote project monitoring can fill in the gap here, and a strong solution will operate smoothly on even just one bar of LTE service.
Missed line items
Even the best of inspectors can be prone to error. If they forget to provide evidence of completed work—even just some minor tile work in the bathroom—the builder won’t be able to receive the funds in the next draw. Rather than sending the inspector back out there, lenders could request the progress inspection remotely and receive photos from one of the trusted parties on-site. Then, they’ll just need to submit a lender-submitted inspection report to release the funds with the next draw.
Remote project monitoring provides a visual log of the project’s progress. It’s also beneficial should disputes arise. Visual proof that’s dated and geolocated can quickly answer questions regarding the progress and when specific stages were completed.
Monitoring a construction project without being in the field offers definite productivity benefits as well. It can take hours of time for an inspector to travel to a site and perform a visual inspection. Then it sometimes takes days for them to send a report back on the project status. Relying on virtual site inspections gives an instant look into the progress, enabling lenders to quickly verify the status and release funds promptly when requested.
Pairing remote and on-site inspections
Remote project monitoring shouldn’t fully replace an in-person checkup from an inspector. In fact, it’s best practice to pair remote monitoring with prescheduled on-site inspections every 30-45 days. That way, you’re covered on a consistent basis, whether it’s a preplanned draw or a more urgent, ad hoc need. If you require a more thorough review, lenders can also route photos from a remote progress inspection to a prequalified inspector for their own remote review.
Construction lenders who lean on remote project monitoring often gain more than just a virtual progress inspection. Most monitoring tools come with a suite of inspection services that increase efficiency and transparency while mitigating risk, reducing administrative burdens related to billing, and offering prequalified inspectors to pair with any remote offerings. Lenders can streamline the process for themselves while maintaining their first goal—getting funds into the hands of the builders who need them.
Table of Contents