I’ve been on both sides of this, and honestly, the “vending machine” thing with banks drives me nuts. Last year, I had a renovation project where a single unexpected code update threw my whole budget off. The bank didn’t care—just wanted their numbers to match. With an investor, I probably could’ve explained the situation and maybe worked out a solution, but then again, I’d have to justify every little change. Has anyone actually run the numbers on how much equity you end up giving away versus just paying interest? I keep thinking about long-term costs, not just flexibility.
BANKS AREN’T FLEXIBLE, BUT INVESTORS AREN’T FREE EITHER
I get where you’re coming from with banks being rigid. I had a similar headache when I built my place last year—ran into a surprise with the city inspector and suddenly needed to upgrade all the electrical. The bank’s response? “That’s not in the original draw schedule.” No room for negotiation, just a bunch of paperwork and delays.
But honestly, I’m not convinced investors are that much better. Sure, you might get a little more flexibility if you can talk things through, but at what cost? I looked into bringing in an investor for my build, and the amount of equity they wanted for what was basically a short-term risk was wild. Like, I’d be giving up 20-30% of my upside just to avoid a few months of interest payments and some red tape. That adds up fast, especially if your project appreciates or you plan to sell down the line.
Interest from a bank is predictable. You know what you owe, and once it’s paid, it’s done. With an investor, you’re potentially handing over a chunk of your future profits forever. And let’s be real—investors can be just as demanding about “justifying every little change,” especially if their money’s on the line. I’ve heard stories where people end up feeling like they have a boss looking over their shoulder the whole time.
I guess it comes down to whether you value control or flexibility more. For me, I’d rather deal with the bank’s bureaucracy than lose a big piece of my investment. At least when it’s all said and done, the house is 100% mine. Just my two cents, but I think people underestimate how much equity they’re really giving away when they go the investor route.
BANK LOAN VS. INVESTOR FUNDING, WHICH MAKES MORE SENSE?
I get where you’re coming from, but I’ve seen investor deals that weren’t all doom and gloom. My neighbor did a flip with a private investor, and yeah, he gave up some profit, but he also got the project moving fast—no waiting on bank approvals or jumping through endless hoops. Sometimes speed and flexibility are worth the trade-off, especially if you’re juggling multiple projects or tight timelines. Not saying it’s always better, but there are situations where giving up a slice now means you actually end up with more later. Just depends how much you value your time (and sanity).
BANK LOAN VS. INVESTOR FUNDING, WHICH MAKES MORE SENSE?
I totally get that—sometimes the hassle with banks just isn’t worth it if you’re on a tight schedule. I’ve worked on a few high-end builds where private funding made things way smoother, even if it meant splitting profits. Curious though, has anyone here ever regretted bringing in an investor later on, maybe when the project took off more than expected?
Curious though, has anyone here ever regretted bringing in an investor later on, maybe when the project took off more than expected?
Honestly, that's where things can get sticky. If you bring in an investor and then the project really takes off, you might kick yourself for giving up a chunk of the upside. I’ve seen folks lose control over decisions or have to compromise on materials just to keep everyone happy. If you’re confident in your build and can handle the bank paperwork, sometimes the hassle is worth keeping it all in your name. But yeah, if time’s tight or cash flow is iffy, splitting profits can be a fair trade-off. Just read that contract line by line... investors can be more hands-on than you expect.
