$3,200 is probably a decent rate unless it’s new construction.

Yes, that means he will have to give up his 3.5% rate (or whatever it is assuming lower then today rates) but it is what it is. 

If it is someone you know you can give them a straight return as if its a loan - can provide a lower interest rate to provide upside - it really depends on the lender and what are they concerned with and what is their risk profile. 

Interest rates are changing every day. 

My firm has several lenders who can seamlessly close in 15 days on 'traditional' mortgages at/below market rates and we've been doing so for a couple of years now. 

Since you haven't started the project yet, use this time to network with lenders to see who offers the best terms....seasoning, rate, leverage and pre-payment penalty terms. 

We cap the rate for utilities and actually added about 10% above our normal average this past year due to rising utility costs in our area for gas and propane.  

Of course back then we were getting “screwed” with 6-7% rates.

With high home prices, rising mortgage rates, and intense market competition, securing a property has become increasingly difficult.A recent survey found that over 60% of real estate agents reported instances where Gen Z buyers lost out on homes due to delayed decision-making, missed appointments, or hesitation in making offers.

So with interest rates high...