Bank says bad debt OK, asset not OK

I want to start buying property with the goal of generating passive income from rent. I’ve read a bunch of books, listen to podcasts, did my research and I stumbled upon a good opportunity that needs more money that I have right now but still a very low amount. So, I need a loan.

I went to a couple of banks to ask for a loan and the answer was essentially: no, we cannot lend you the money to buy this asset that will pay for itself, but if you want to blow it up on a holiday and buy some useless toys, sure, here it is!

Mind you, I can easily pay the loan from my salary. I actually save more money every month than the monthly payment of the loans and I have in the bank a third of the money. My salary has been steadily going up and I’m in an industry in which I’m in a lot of demand. Where my plan is a safe bet, betting on me is even safer.

I’m not one to believe in conspiracy theories but it almost seems like their rules are designed for people to be stupid, instead of smart, with their money; to get in bad debt instead of growing their wealth.

Now, for the nitty gritty details: I asked for a personal loan, some banks disqualify me because you are not allowed to use it for business, some banks disqualify because I’m planning on buying property. They say: “we cannot give you a personal loan for property because you may also get a mortgage”

“Ok, can you give a mortgage then?” “No, because your property is in another country”

“Can you do anything?” “No”

Let’s say I take this supposed mortgage they are so afraid of and the plan fails. Whoever has the mortgage will repossess the property and I’ll pay the bank out of my salary the same way I would if I wanted to spend the money on a caribbean cruise or home improvement.

This feels utterly ridiculous.

Web presence for startups

You build a product, a web or a mobile app and then you need to build a web site to promote it, a.k.a.: the web site. There are several ways of building and maintaining this web site and I have tried most of them and today I have strong opinions about how to do it.

One alternative is to build a custom website as a bunch of HTML and CSS produced by a graphics designer and a coder. Maybe with some server side functionality. If you are building a web app, you might be tempted to mix the web presence with the web app. A lot of tech startups go this route because they have the talent and because it’s the only way to achieve the pristine look that everybody wants and that the industry giants, such as Apple, have.

This is a mistake. The mistake is not considering the process of the evolution of this web site. We only think of the initial task of building it and that tends to be easily achievable, but after that is when the problems really start. Marketing and sales will want constant modifications to that web site both in terms of content and look and feel. They’ll want new landing pages, different kind of analytics. Sometimes they’ll want to scrap the whole thing and start over. This is part of their job and you should just let them do it.

The problem of having the developers of the startup also develop the website is that they need to maintain it and if your marketing/sales people are active enough, they can easily generate enough modifications for a full time person. But your developer needs to be working on the product, not the website. Most changes requested by marketing are going to be relatively small and not as important as improving the product, which means your web presence will be neglected and your marketing person will get annoyed.

The answer is to have CMS and give write access to market and sales. Whether the CMS is WordPress or SquareSpace or something else, it doesn’t matter. I would even recommend to not host it yourself so that the marketing/sales department have a support department that can help them with issues that is not your development team.

This approach will not look as clean, it might feel a bit clunky and people inside and outside the organization are going to constantly fight it. If this is your choice, you’ll have a tough time defending it. I found myself repeating the contents of this blog post to many people over and over again and this is why I’m writing it.