We all have hedge funds/investors with an almost insatiable appetite for these loans and nearly every lender I know sells all, most, or some of their paper.Just a heads up that a local "big bank" is just as likely to sell your loan as I would be.

Kristin and I are confident we would be able to submit forms and setup the entity online ourselves, but want to suppress fears some with this conversation.Thanks for the tip,Brandon & Kristin

I think the answer is very dependent on your appetite for risk.  

And second I think you need to really characterize your risk/return for both approaches you've outlined and see how that fits your personal appetite for risk.

I am lucky enough to be backed by 5 private investors who collectively will provide up to $2m to get me started, and have a pretty high appetite for risk (so I can use leverage).

They come out with new requirements every year like fire suppression systems. 

Our goal in offering stock to our customers was to allow those with the risk appetite to profit from our eventual success as a company should we our goals, in addition to the loans we offer for investment.

I would recommend not to squeeze investor too much as if things go well he will have the appetite to come back with you and refer to outside people.Absolutely consult a lawyer when taking investor money.

I called every lender in my local area and took notes, asking about their appetite for SFR lending.

The appetite for real estate has been insatiable in Boston lately but I also sold a three-family property to another client on Nightingale Street, Dorchester for only $112,500 during the bottom of the Great Recession so it's important to keep perspective which this market, in my opinion, seems to have lost.