Learn about how real estate investors use Rehab Financial Group’s 100% Financing Program to execute the BRRRR strategy to buy and rehab residential properties (in 30+ states), and then refinance into a long-term DSCR loan. Private Lender Link’s CEO, Rocky Butani visited the company’s office in January 2023 to interview RFG’s President, John Santilli. Watch the video or read the transcript below.
ROCKY BUTANI:
So your loans are either rehab to sell or fix and flip, or rehab to rent, and then ground up construction. If my strategy is to rent the property, what does that entail? And do I have to qualify for the long-term rental loan before you’ll fund my rehab loan?
JOHN SANTILLI:
Generally speaking, the answer is No. We treat the loans pretty much the same, whether it’s going to be a fix & flip or it’s going to wind up being a BRRR type of investment. If we see that there’s some uniqueness associated with the property itself, then the answer is yes. We will always try to focus on making sure there is an out when you’re coming in to our loan.
ROCKY BUTANI:
And let’s say I initially planned to sell it, but then I decided, “hey, I want to keep it and rent it out.” Is that okay?
JOHN SANTILLI:
No issue from our perspective.
ROCKY BUTANI:
Okay. So if I wanted to rent the property instead of selling it, do you offer long-term rental loans?
JOHN SANTILLI:
We do offer long-term rental loans. Honestly, our core business is the short term. So the long term is more of a pass through for us. So a lot of lenders over this past year have got themselves in trouble by putting those loans on their balance sheet and not having them priced properly. Obviously that’s not our goal. We don’t want to be stuck with those loans.
So the way that we have focused our program is to really be more of a pass through. And we really just focus on, we have a lot of your information already, let’s prep your loan to be sold to a third party that is more aligned with third party product. We do have some preferred pricing lined up. And really for us, it’s a matter of taking you off of our balance sheet and putting you onto somebody else’s. So for us, we price the loan as low as we possibly can, pay for our cost in general. It’s not really a profit machine for us. It’s really just a service to our investor base.
ROCKY BUTANI:
What do you mean by pass through?
JOHN SANTILLI:
So we are either acting as a banker or we’re acting as a broker. And in this environment, it has been a preference for us to be a preferred broker for some of our relationships where we get some preferred pricing. And the fact is that that’s is the way that we’re offering that product to our customers.
ROCKY BUTANI:
So only for the 30-year rental loan, the DSCR loans, that’s how it’s structured. But all the other types of loans, rehab and ground up construction, that’s all your own money?
JOHN SANTILLI:
Our balance sheet, our money, our rules. From our perspective, it’s common sense underwriting. We are not bound to third party money. Okay? we have all of our money in-house. Ultimately, we have written our guidelines to satisfy our investors’ needs, but we have the control to make exceptions where need be. Once we have a relationship with our investor, we understand your business. The fact is that we can really put your business on steroids and really get the engine really running.
Learn More About RFG’s 100% Financing Program
Read or watch other parts of this interview to find out all the requirements for the buying and rehabbing part of the BRRRR strategy…
- 100% Financing Program Overview
- Interest Rates for 100% Financing Rehab Loans
- Interest Reserves and Draw Process
- Project Scope and Experience Requirements
Visit RFG’s profile to learn more and find their contact information.
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