BANK LOAN VS. INVESTOR FUNDING, WHICH MAKES MORE SENSE?
The bank doesn’t care if you use reclaimed wood or laminate, as long as you pay them back.
That’s been my experience too. On a mixed-use project a few years back, I had an investor who wanted to “reimagine” the landscaping—ended up costing us weeks and a chunk of the budget. With bank loans, I’ve found the predictability is worth the paperwork headache. But I do wonder, have you ever run into a situation where the bank’s requirements actually limited your design? Sometimes their risk aversion can be a different kind of roadblock...
BANK LOAN VS. INVESTOR FUNDING, WHICH MAKES MORE SENSE?
Funny you mention that—had a bank once insist on a certain percentage of “market rate” units in a mixed-use deal, which totally threw off my original layout. Ended up having to rework the floor plans to fit their loan conditions. My way around it: I get my design ducks in a row, then walk through the plans with the lender before finalizing anything. Saves me from backtracking later... not always fun, but it keeps things moving smoother.
BANK LOAN VS. INVESTOR FUNDING, WHICH MAKES MORE SENSE?
Yeah, banks can be sticklers for their requirements—had a similar experience where their conditions forced me to rethink the whole site plan. Honestly, that’s one reason I lean toward investor funding when I want more flexibility. Investors can be demanding in other ways, but they’re usually less rigid about design specifics. Still, if you want to keep control and don’t mind jumping through some hoops, banks are usually cheaper money in the long run. Just depends how much control you’re willing to give up and how tight your timeline is.
BANK LOAN VS. INVESTOR FUNDING, WHICH MAKES MORE SENSE?
Man, I hear you on the banks. The paperwork alone is enough to make you want to pull your hair out. Last time I tried to get a construction loan, I swear I spent more time explaining why I needed a certain window size than actually building anything. They want every “i” dotted and “t” crossed, and if you sneeze the wrong way, you’re back to square one.
But here’s the thing—at least with a bank, you know what you’re getting into. Yeah, they’re picky, but once you jump through their hoops, they mostly leave you alone to do your thing (as long as you don’t go totally off script). The rates are usually better too, and you don’t have someone breathing down your neck about profits or timelines every week.
Investors, on the other hand... well, they can be great if you want to move fast or try something a little outside the box. I had one project where an investor was all in for some wild design ideas that a bank would’ve laughed at. But then again, he wanted updates constantly and had opinions about everything from tile choices to landscaping. Sometimes it felt like I was building his dream house instead of my client’s.
I guess for me it comes down to how much control I want to keep and how much risk I’m willing to take on. If I’ve got time and patience, I’ll wrestle with the bank for the lower rates. If I’m in a hurry or want to try something new, investors can be worth the hassle... just gotta be ready for their “input,” if you know what I mean.
Either way, there’s always some kind of trade-off. No such thing as free money in this business—just depends which headaches you prefer.
BANK LOAN VS. INVESTOR FUNDING, WHICH MAKES MORE SENSE?
Haha, the “free money” myth—if only, right? I totally get what you mean about banks. I swear, last time I tried to get a mortgage, I felt like I was applying for a top-secret government job or something. But honestly, as someone who’s always watching the budget, I lean toward banks just because I know what I’m paying and when. The interest rates aren’t always fun, but at least I’m not giving up a chunk of my project or future profits.
That said, I’ve seen friends go the investor route and it’s a mixed bag. One buddy got an investor who was super chill, barely checked in, just wanted his cut at the end. Another had someone who basically moved in and started picking out paint colors. I don’t think I could handle someone micromanaging every decision, especially if I’m the one paying the bills.
I guess for me, it’s about keeping things predictable and not having to argue over every little choice. I’d rather deal with paperwork than someone second-guessing my every move... unless I’m desperate for cash or on a tight timeline, then maybe I’d reconsider.
