I've been down both roads myself, and honestly, I'd lean toward banks if you're the type who values autonomy. Investors can be great for flexibility upfront, but like you said, they often come with strings attached—sometimes pretty tangled ones. Banks might drag their feet, but once you're approved, they mostly stay out of your hair. If you prefer making decisions without constant oversight or second-guessing, a bank loan probably suits your style better. Just my two cents from experience...
Went with a bank loan myself when building our custom home, and honestly, it was pretty straightforward. Sure, the paperwork was a pain and took longer than I'd hoped, but once we got approved, no one bothered us about design choices or timelines. Heard stories from friends who had investors breathing down their necks about every little detail... wasn't my idea of a good time. If you're like me and just wanna get things done your own way, banks might be less hassle overall.
Did you find the bank's timeline manageable? I went the investor route once, thinking it'd speed things up, but ended up stuck in endless meetings debating paint colors... never again. Banks might be paperwork-heavy, but at least they stay outta your hair.
I feel ya on the investor headaches. I haven't gone that route myself, but my brother-in-law did, and it was kinda hilarious (for me, not him). He thought investors would speed things up too, but ended up with a group that had opinions on everything—from window trims to landscaping bushes. He joked that he spent more time playing therapist and referee than actually building the house. In the end, the project moved at a snail’s pace because every decision turned into a committee debate.
For my own build, I went with the bank loan, and yeah, the paperwork was a royal pain at first. Felt like I signed enough documents to fill a small library. But once that hurdle was cleared, they pretty much left me alone as long as I stuck to budget and timelines. It was refreshing not having someone breathing down my neck about paint colors or fixtures every other day.
One thing though—banks can be sticklers about timeline milestones. I almost missed one of mine because of unexpected rain delays and had to scramble to keep everything on track. It worked out fine in the end, but it definitely added some stress.
Curious if anyone here has tried mixing both funding methods? Like maybe using investors for initial land purchase and prep, then switching over to bank financing for construction itself... Wondering how messy or smooth something like that could be.
I've seen a couple projects try that hybrid approach, and honestly, it can get messy fast. Investors usually want clear exit strategies or defined returns, and banks have their own strict criteria about equity and ownership structures. Mixing the two means juggling both sets of expectations simultaneously... doable, but not exactly smooth sailing. Might be simpler to just pick one headache and stick with it?
