Navigating Challenges and Optimizing Funding in the Elfa Loftus Development
The elfa Loftus development, undertaken by Insta projects, faced notable hurdles including rapid partner selection, project pauses, and quality control issues, ultimately extending the initial nine-month timeline by six months. Despite thes challenges, the project maintained investor confidence and highlighted the benefits of focused funding solutions.
Initially, the project required swift selection of construction partners. This urgency, coupled with unforeseen issues requiring extensive rework – such as the complete replastering of the second and third floors due to unsatisfactory quality - contributed to delays. J. Rutkauskas, of Insta projects, emphasized the importance of prioritizing quality over speed, stating, ”It is indeed better and cheaper to repair and do quality now than to repair a broken wall after a few years and to suffer for reputation. After all, the object has guarantees.” The goal was to ensure long-term quality and avoid future defect repairs.
Insta projects employed both project and work managers to oversee construction phases, eventually assuming full project management duty. The work was divided into smaller, manageable components and assigned to various teams. However, the quality of work from approximately 80% of the newly hired brigades proved unsatisfactory, necessitating frequent changes and contributing to the extended timeline.
Dialogue proved crucial throughout the process. A. Satkūnas highlighted the developer’s openness in informing investors about the delays, attributing them to objective reasons and the need to maintain quality standards. This communication was reinforced by the fact that preliminary purchase contracts for nearly all the planned lofts were already signed or in progress, and that 24 developers intended to retain their lofts for rental purposes. J. Rutkauskas further maintained transparency by regularly sharing construction progress photos on social media.
Financially, the project was initially funded through Insta projects’ own resources, contributions from initial buyers, and investments from physical investors. While Profitus was prepared to offer financing, Insta projects utilized previously established funding methods, which ultimately proved more expensive. J. Rutkauskas now recognizes the potential benefits of leveraging Profitus’ funding options for materials and labor costs, stating, “If I had said more and asked Aurimas, I would have implemented Elfos Loftus more financially rational.”
The experience underscores the value of consulting with financial specialists before embarking on new projects. Profitus notes a growing trend of real estate developers, both large and small, utilizing focused funding as a viable alternative to customary bank or credit union loans, especially due to its speed and accessibility.A. satkūnas confirmed Profitus’ continued interest in supporting future projects led by Justas, citing Insta projects’ reliability as a key factor.
