So you’ve found the perfect project, the numbers add up and you’re good to go – apart from the small matter of how to finance it.

If you’re unable to finance your property development fully from your own resources, you have two choices – borrowing the money, or finding co-investors and giving them a share of the profits. As with most things in life, there are pros and cons to each.

Giving away a share of the profits in the form of equity frees you from the burden of having to pay interest on the capital and, because you are sharing in the risks and rewards, the amount you have to pay to the investor at the end of the project will be entirely linked to its relative success. On the downside, you’ll have to find an investor – or investors – that share your enthusiasm for the project and you might find that they demand a large share of the spoils because they understand the importance of their cash to you.

Debt, on the other hand, means having to commit to a repayment programme. The good news is that it keeps you in control of the project and allows you to budget for the cost of capital and interest in your forecasts.

The nature of your project, whether it’s a light refurbishment, buy-to-let or a ground-up development; the level of your own resources; and the amount you need to raise will all have an influence on the most appropriate route.

We have a long tradition of property investment here in the UK and many options exist for investors that want to get involved, from running their own projects to investing a few pounds in a crowdfunding platform. As a developer, you need to compete for their attention.

For the purpose of this article, we’ll assume that investment is the path you want to explore first, so the challenge then becomes how to find your investors.

1. Friends and family

Usually the first port of call, but asking the question can be awkward. Nobody wants to compromise a friendship or cause a family rift – and you need to consider how they would react if things went wrong further down the line.

2. Other private investors

You’ll generally find these through your network, including the agents working on the sale. These wealthy individuals are happy to get involved in property projects, usually in locations that they know, and, once found, it’s just a matter of building a relationship with them. You can expect these investors to ask lots of questions about the project and your ability to deliver it. They’re also likely to want plenty of security, as well as a good return.

3. Angel investor networks

You’ll find a host of angel networks online. Typically, you submit your requirements through the website and view the profiles. You won’t have any prior relationship, and some of the investors on these sites can be quite casual, so you could find you need to submit your proposal to several networks before you get a bite.

4. Family offices

These are professional wealth managers protecting and growing the assets of an affluent family. They will often have an appetite for property as part of a balanced portfolio, but it’s a close-knit industry so can be hard to break into without the right contacts.

5. Crowdfunding platforms

There are several property-based peer-to-peer platforms on the market, some more established than others, so it’s important to check the criteria and credentials of the platform you choose. Assuming your project passes the platform’s credit checks, it will be marketed to its investors. The risk is that the project is not fully funded by its close at which point it is withdrawn from the platform and you are back to square one. Rates can be high as the platform has to offer attractive rates to investors as well as factor in its own margins and fees.

Here at LendInvest, we offer loans rather than equity through products like property development finance, bridging loans and auction finance. You can see lending products for every kind of property project on our full product page.

While there are investors of various types providing the capital on the other side of our platform, they are at arm’s length and you don’t have to do the work to find them. The availability of the funding is also guaranteed for all loans that are agreed – there’s no waiting and seeing if investors will take it up. Rates are competitive and not dissimilar to those that you would expect to pay to a bank if it was to have an appetite to lend.

The common denominator is that you need an attractive and well thought through proposition that gets the balance of risk and reward right for the investor, while keeping the project profitable and attractive for you. You should be prepared to put time into it and also for a few false starts, particularly if you are seeking a large amount from one source.

So, whatever your project, review your options and decide whether equity or debt works best for you.