Private fund or better options?

Question

We build tiny homes and sell them on CFD, I've talked to a few lenders that mentioned a private fund, may be ideal to fund these.

Im wondering if that's the route to go or is there a better option? A quick run down on how we operate.

We utilize a private lender now. They fund these loans 100% which covers land accusation, and build cost.
Term 6 months, interest only payments. Followed by a balloon payment at the end of remaining balance. Interest rate fixed at 12.9%

Loan is dispersed via draws.

Our typical timeframe start to finish is 60 days. From the time we acquire land and build to the time it's sold.

So my question is, is a private find the way to go to fund these types of deals?  Also any investors that this seems like an interesting idea to, I would be interested in chatting

Cody Foran · Answer

@Scott Wolf no complaints with our current set up. Would just like to get another investor on board too kind of scale these a little faster, as our current investor is only interested in doing one at a time

Chris Seveney · Answer

I do not think you are gonna find better than waht you are paying. you could start a fund with accredited investors but by the time you pay the costs to set it up and run everything and reduction in what you pay will get chewed up in fees.

you could also sell the CFDs after the fact (but not many cfd buyers nowadays due to too many lawsuits).

Cody Foran · Answer

@Geoffrey Scott Gregory it won't allow me to DM you, feel free to shoot me over and let's chat.

Cody Foran · Answer

@Andy Gonzales it's working out so far for us.  Just not ideal to scale quickly.  We actually have the CFD sold typically before construction is 100% complete.

Cody Foran · Answer

@Chris Seveney it seems that is the case. Which our current setup is fine. It's just not suitable for the larger projects.   Selling the CFD's are not an issue, we have a few steady buyers for those.  Is there a better alternative than CFD, that is more attractive?

Andy Gonzales · Answer

That’s a solid setup. A private fund could work if you’re trying to scale and keep more control over terms, but it does come with setup costs and admin work. I’ve seen others keep their current lenders while building a small fund on the side to test the model.

Curious — how are you handling servicing on those CFDs?

Geoffrey Gregory · Answer

Hi Cody,

I'm a small private investor and currently have around $50,000 available to lend. I'm looking to work with borrowers like you who have a proven track record, creditworthiness, and a clear exit strategy or business plan. I’m especially interested in short-term, real estate–backed loans such as yours where the property serves as collateral.

If you can demonstrate a solid deal structure—I’d love to start a conversation and learn more about your projects. Please feel free to send me a direct message.

Looking forward to connecting to hear more.

Cody Foran · Answer

@Scott Wolf they didn't have much info outside of mentioning a private fund may be the way to go, unfortunately. Most lenders seem to have a 100k minimum requirement (which is fine) but can not get underwriting to approve a tiny home.

Scott Wolf · Answer

What's wrong with the setup you have now? Are you getting better offers?