Each real estate transaction we’ve completed is subtly different from the other. On our latest project, we are using a construction loan, where the bank finances the renovation costs. Previous projects, we have held the renovation funds internally.
Using bank funds to renovate our portfolio verses our own capital allows us to scale faster. Should another deal arise, we now have access to money that would have otherwise been tied up in renovating our current project. The trade-off here is that the bank charges interest to use their money for the renovation. This strategy works so long as the debt service costs are affordable.
