JV vs Traditional Financing: Which Is Better?

When it comes to funding a real estate project, investors often face two primary paths: traditional bank financing or entering into a joint venture (JV). Both have their uses — but they function very differently, especially in terms of risk, flexibility, and speed.

Traditional Financing usually comes from a bank or mortgage lender. You borrow money and repay it over time with interest, regardless of whether your project succeeds or not. Banks typically require good credit, a down payment, and proof of income. While it works for long-term rental projects or stabilized properties, it can be slow, strict, and unforgiving.

Joint Ventures, on the other hand, are partnerships where one party provides the capital and the other brings the deal, the management, or the expertise. Unlike loans, you don’t owe fixed monthly payments. Instead, both parties share profits (and risks). If the deal succeeds, everyone wins. If not, losses are also shared.

Let’s break it down:

• Speed: JV funding can be arranged in days, while bank loans may take weeks or months.

• Risk: JVs eliminate debt risk — you’re not locked into interest payments during tough market cycles.

• Control: Traditional lenders may place restrictions on your budget, timeline, or draw schedule. In a JV, you set the game plan with your partner.

Example: A real estate investor in King County wants to flip a property but lacks capital. A traditional bank would require 20% down, good credit, and 6–8 weeks to approve. A JV with Devency Capital provides 100% of the financing, allowing the investor to begin work immediately — and share in the profits instead of paying interest.

For value-add or fix-and-flip projects, JVs are often the better route. They are built on collaboration, not credit scores.

Email: info@devencycapital.com

Website: www.devencycapital.com

Phone: 206-806-7935

📞 Ready to take action? Call us today and let’s discuss how we can partner on your next real estate deal!