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What is retainage substitution?
The ability to earn investment interest from retainage.
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How does retainage substitution work?
A retainage specialist navigates the process, but ultimately the contractor is paid interest from accumulated retainage .
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Retainage firms near me:
Double Diamond Investment Group with offices in NJ, PA, NV and FLA
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How much money can I earn from retainage substitution?
Interest rates change frequently. Please consult with a retainage substitution specialist.
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What is the best type of investment for retainage substitution?
Shorter-term, High-quality municipal bonds
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What is the risk associated with investing in municipal bonds?
The two main risks are default risk and interest rate risk. Default risk may be substantially reduced by exclusively investing in high-quality and essential purpose bonds. Interest rate risk should be reduced by investing in shorter-term bonds.
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Do I have to use my own money for retainage substitution?
In many states the contractor has no cash outlay.
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If I use my own money, how long does it take to get paid?
This depends on the owner. Many owners return cash in just a few days while others may take up to a few weeks.
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What agencies allow retainage substitution?
Most agencies within approved states allow this practice.
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What are the typical escrow agent fees?
Escrow fees range from a few hundred dollars to as much as $1,500 per year.
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For tax purposes, how do I record retainage earnings?
Many accountants record these investments as marketable securities. Please check with your own accountant.
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Is retainage substitution worth it?
Yes, some utilize these proceeds to offset employee salaries, while others allow Regional VPs to include the earnings as part of their bonus pool.
