While RCN sees continued success in the longstanding short bridge loan, adding additional products away from fix-and-flip allowed RCN to build April to a record month.
“We have found that more and more folks are aggregating one- to four-family homes as individual rental products,” said Jeffrey Tesch, managing director of RCN Capital. “A longer-term rental product allows folks that traditionally go to their local community bank for this type of loan a unique option when they acquire homes in need of financing.”
RCN has rolled out a 30-year full AM product, allowing borrowers to lock in today's low rates. “If you look at the long term history of where interest rates have been, we know they will go back up again. The fact that people can lock these in today is a tremendous win for them building their portfolio. It’s Incredible,” Tesch said.
RCN has also introduced its Ground Up Construction Program, which focuses on in-fill lots close to urban or suburban centers where vacant lots and never-built-out individual parcels allow developers or investors to come in and build from the ground up.
“As the number of homes close to urban centers has decreased in the MLS, there are not as many homes for sale as there used to be,” Tesch said. “Instead, our Ground Up Construction product has taken off.”
Connecting with more brokers and working with more broker partners have also tipped the scales in favor of RCN. Basing its operations in Connecticut, RCN strategically uses independent mortgage brokers to drive business. “We help educate these brokers on how to originate these products away from the standard owner-occupied single-family homes they are used to,” Tesch said. “Almost 78% of every loan we originate, we are paying a referral to an independent mortgage broker. We take pride in these relationships and in the educational component we can provide. ”
Tesch advises mortgage professionals to use the Real Estate Investment Association Clubs across America to familiarize themselves with the current market and trends. Going to local events, getting some education and figuring out what is happening from a community and a real estate investment perspective will help anyone hoping to find success in this area.
Once an individual is comfortable, Tesch recommends reaching out to companies, such as RCN Capital, who offer broker education programs. RCN’s program pairs brokers with internal loan officers to start building relationships.
“Internally we figured out that, if we take our internal employee, our loan officer, and pair with an outside professional independent mortgage broker, we are invested in that mortgage broker’s success,” Tesch said. “At the end of the day, the internal only makes money when they close loans. It’s a win for the independent professional and internal employee.”
RCN Capital has evolved from a regional lender to a national powerhouse. As one of the national players, they have retained their family roots.
“We are the same company I built almost 10 years ago,” Tesch said. “The core employees are still with me. We invest in them, the company, by offering education and training that keeps them at the top of their game. And we know our independent professionals are our partners. Without them, we don’t have anything.”