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.
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?
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.
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?
No issue from our perspective.
Okay. So if I wanted to rent the property instead of selling it, do you offer long-term rental loans?
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.
What do you mean by pass through?
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.
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?
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.
Private Lending Trade Associations – Why Investors & Brokers Should Care
In this guide, I’ll explain why real estate investors or mortgage brokers should care about private lending trade associations when...
Valuation and Appraisal for RCN Capital Correspondent Program
Learn about the valuation and appraisal process for loans funded through RCN Capital’s Correspondent Program for brokers and private lenders....
Analytics Logics 2023 Q3 Private Lending Trends Data Report
Author: Alex Kaddah / Analytics Logics In this article, I will delve into the recent trends within the private lending...
Compliance Considerations for Private Lenders to Lend Nationally
Learn about some compliance considerations for private lenders (aka hard money lenders) that want to lend on a national scale....
Risk Analysis of Using Software Instead of a Law Firm to Prepare Loan Docs
Learn about the risk analysis of using software instead of a law firm to prepare loan docs for private mortgage...
Private Lending Interest Rate Update 2023 Q3
In this guide, I’ll provide the typical interest rates for short-term loans secured by residential investment properties, the rates for...
Do Private Lenders Need an Attorney to Prepare Loan Docs?
Many private lenders try to avoid hiring a law firm to draft loan documents for all the loans they fund....
How Private Lenders Approach Loan Documents
Learn about how various private lenders approach loan docs for funding private mortgage transactions (aka hard money loans). Private Lender...
Experience and Project Scope Requirements for 100% Financing Fix & Flip Program
Learn about the experience requirements and the project scope restrictions for Rehab Financial Group’s 100% Financing Program for residential property...
Interest Reserves and Draw Process for 100% Financing Fix & Flip Program
Learn about the interest reserve requirements and the draw process for Rehab Financial Group’s 100% Financing Program for residential property...
Protecting and Enabling Brokers’ Success with Technology
Learn about the technology provided with RCN Capital’s Correspondent Program and how it is used to protect brokers/lenders who partner...
Institutional Private Lending Terminology
The majority of private lenders today are institutional, meaning their capital comes from some sort of financial institution, including hedge...