FOR IMMEDIATE RELEASE
Contact: Saverio Mancini
Cashman + Katz
RCN Capital Reports $109M in Private Loans for 2015
Year-end results showcase growth in fix & flip within the hottest real estate markets in the nation
SOUTH WINDSOR, Conn. (January 22, 2016) – RCN Capital®, a nationwide direct private lender, reported $109M in private loans for fiscal year 2015. A majority of these loans were used to fund single-family and multi-family residential and commercial properties that were flipped and sold as part of an arm’s-length sale for the second time within a 12-month period. This comes at a time when increased regulations within the mortgage industry have greatly reduced the availability of short-term commercial loans for investors in competitive real estate markets. Private lenders, like RCN Capital, fill a niche that conventional financing sources have ignored for years, including providing construction loans to contractors in underserved communities.
For example, in Brooklyn, New York, the owner of a 7-room triplex needed to sell the property, but the building had 5 kitchens, which made the home non-conforming to Fannie/Freddie financing. While the borrower had average credit, the property had high potential, and was likely undervalued. It was also located in a hot area of New York City – just one block from the beach and Coney Island. As a result, RCN Capital was able to loan the borrower 80% of the Loan-to-Value ratio of the property, enabling the owner to remove the additional kitchens. This allowed an incoming real estate investor to purchase the property with long-term financing, and increased the net operating income (NOI) and value of the property.
Since its inception in 2010, RCN has underwritten more than 1,500 loans and overseen more than $300 million in originations throughout the country. Its programs have revitalized communities across the country through the purchase and rehabilitation of single family, multi-family, and commercial properties. Each project has created and supported new jobs while injecting money into local businesses that supply the necessary materials and services. RCN’s renovation funding has also increased home values and decreased vacancies, further revitalizing communities on a nationwide scale.
A repeat borrower in Bellwood, Illinois was under contract to acquire a 4-bedroom, 1.5-bathroom single-family residence from HUD. Renovations to the property included updating the kitchen, replacing & resurfacing floors, fixing plumbing, replacing the furnace, landscaping, and fully renovating the bathroom. RCN Capital was able to fund 65% of the After-Repair Value, and the borrower is likely to make $25K on the deal.
Through RCN’s unique private lending resources, borrowers have access to more creative funding solutions, which yield more profitable returns on real estate transactions. And while these distinct scenarios may have typically fallen outside traditional bank lending, RCN’s solutions lead to greater success despite the new rules and regulations of Dodd-Frank.
In Lodi, New Jersey, a borrower with strong credit, but low income from the previous year was able to secure a $368,000 Acquisition and Rehab Loan with RCN Capital to make much needed repairs on a duplex with two, 2-bedroom apartments. The rehab list included roof repairs, bathroom overhauls, new lighting fixtures, new smoke alarms, new appliances and new doors. The borrower expects to sell the property for $599K-$610K.
As a direct, private lender, RCN Capital’s takes a common sense approach to underwriting, with all approvals made in-house. It is dedicated to providing a quick response to time-sensitive loans, offering speed unmatched by conventional lenders; closing loans in as few as 10 business days. Through bridge or gap funding options by RCN Capital, an investor can start the process of applying for a conventional mortgage, get short-term financing from RCN to close quickly, and then refinance conventionally. This would prevent investors from losing out on particular deals because of timing issues.
A borrower in Tallahassee, Florida was listing a nice, clean investment property for sale, but needed funds fast to invest in another profitable opportunity in Nevada. RCN Capital was able to lend the borrower 65% of the Loan-to-Value on the Florida property, ensuring that the borrower could meet his investment goals in Nevada while still in the process of selling the Florida property.
About RCN Capital
RCN Capital® is a national, direct private lender. Established in 2010, RCN provides short-term commercial loans ranging from $50k to $2.5M+ to fund the purchase of non-owner occupied residential and commercial properties, provide bridge loans, and provide real estate-backed lines of credit. RCN lends to experienced real estate investors, commercial contractors and small business owners throughout the country.