When navigating the real estate investment landscape, brokers, private lenders, and referral partners must assess the financial structures that best support their clients’ goals. The choice between financing a single asset or funding a growing real estate portfolio can determine long-term success and operational efficiency. While individual assets may be a good starting point for some investors, portfolios offer significant benefits when managed correctly.
At RCN Capital, we aim to equip brokers, private lenders, and referral partners with the tools they need to advise clients on the best course of action. In this article, we will examine the considerations that brokers and lenders should keep in mind when deciding between funding a single asset or expanding into a portfolio, and how RCN Capital's loan programs can help facilitate each strategy.
For many brokers, private lenders, and referral partners working with new investors, the first step is often financing a single asset. This approach helps clients gain valuable experience and build confidence without overextending their resources. The simplicity of managing a single asset allows new investors to focus on learning the ropes of real estate without the complexities that come with a portfolio.
When an investor starts with a single asset, they can quickly gain experience in property management, budgeting for renovations, and understanding market trends. For brokers and private lenders, offering loans for single assets makes sense, as it aligns with a client’s early-stage investment strategy. Moreover, the fix-and-flip loan program from RCN Capital is a great tool for new investors who are looking to maximize returns on a single property.
The flexibility in structuring financing for single assets makes this approach appealing for both investors and lenders. Investors can start small, refining their strategies before scaling up to more complex investments. Additionally, financing a single property is more manageable for both brokers and lenders, ensuring smooth transactions and minimizing risk.
For investors, a single property allows them to refine critical skills such as assessing cash flow potential, managing repairs and rehabs, and determining whether a property will meet their long-term goals. These skills form the foundation for future portfolio growth, so brokers and lenders should encourage clients to take a methodical, steady approach to real estate investing.
Brokers and private lenders can also benefit from this approach because working with clients who are starting small allows them to establish trust and build relationships. By offering guidance and financing for single assets, brokers and lenders can position themselves as trusted advisors, preparing the ground for future, more lucrative partnerships as the investor’s portfolio grows.
Once an investor has gained experience with a few single assets, it may be time to consider scaling up. Building a real estate portfolio offers numerous advantages, including long-term stability and diversified income streams. For brokers and private lenders, supporting the transition from single assets to portfolio financing can be a strategic move that leads to more consistent, high-volume business.
At RCN Capital, our portfolio loan program provides an excellent solution for clients looking to consolidate their real estate holdings. By bundling several properties under one loan, investors can streamline their operations, reduce costs, and simplify their financial management. This consolidation allows investors to focus on growing their portfolios rather than managing multiple individual loans, making the process more efficient for everyone involved.
Portfolio loans are structured to provide long-term financing for investors with multiple properties, offering a number of advantages that can appeal to brokers and private lenders. The ability to consolidate loans means that investors can reduce their monthly payments and cut down on legal and administrative costs. Portfolio loans also typically come with lower interest rates compared to individual loans, which helps investors save money and increase the profitability of their investments.
RCN Capital offers portfolio loans with competitive terms. Our 30-year loan program allows for up to 80% loan-to-value (LTV) ratios, with interest rates as low as 3.85%. This makes portfolio loans an attractive option for investors looking to lower their financing costs and maximize returns. For brokers, private lenders, and referral partners, the ability to offer portfolio loans to clients can create opportunities for larger, more profitable deals.
Moreover, portfolio loans provide flexibility in terms of property value. While our standard loan programs require properties to have an as-is value of at least $100,000, portfolio loans allow for lower-value properties as long as the overall portfolio average exceeds the $100,000 threshold. This gives investors more leeway when structuring their portfolios and allows brokers and lenders to cater to a broader range of clients.
While portfolio loans can be a powerful tool for investors, there are important considerations that brokers and lenders must be aware of when guiding clients. One such consideration is the partial release fee. When a client decides to remove a property from their portfolio, a fee of 20% on top of the unpaid loan balance (UPB) applies. This fee ensures that RCN Capital maintains the long-term stability of the loan while providing investors with the flexibility to adjust their portfolios over time.
Brokers and lenders should advise clients to carefully evaluate which properties to include in their portfolio, as removing a property may involve significant fees. Understanding these costs and ensuring that the properties within the portfolio are high-quality investments can help investors avoid unnecessary fees and maximize the benefits of portfolio financing.
Knowing when to transition from single asset financing to portfolio loans is a key decision for both investors and their financing partners. Brokers and private lenders should look for signals that an investor is ready for this step. If the investor has successfully managed multiple properties and is generating steady cash flow, it may be time to consider building a portfolio. Additionally, if the investor is looking for greater flexibility and lower financing costs, portfolio loans can be an attractive option.
At RCN Capital, we work with brokers and lenders to ensure that clients are making informed decisions about their financing options. Our team is always available to help assess whether a client is ready for portfolio loans and offer guidance on structuring the loan to best suit their needs.
For brokers, private lenders, and referral partners, understanding the differences between single asset and portfolio financing is crucial to providing the best advice and support to clients. While single assets are a great starting point for new investors, portfolio loans offer the scalability and efficiency that experienced investors need to grow their portfolios. By working closely with investors and offering tailored financing solutions, brokers and lenders can build long-term relationships and capitalize on the growing demand for real estate financing.
As a broker, private lender, or referral partner, your role is to help clients navigate their real estate investing journey. Understanding when to recommend financing for a single asset versus a portfolio is key to providing the right guidance at the right time. With RCN Capital’s suite of loan programs, you can offer tailored solutions that align with your clients’ needs, whether they’re just starting out or looking to scale their investments.
By partnering with RCN Capital, brokers, private lenders, and referral partners can offer comprehensive real estate financing options that support long-term growth, reduce costs, and provide greater efficiency for their clients. Our commitment to providing competitive rates, flexible terms, and exceptional customer service ensures that your clients have the tools they need to succeed in the ever-changing real estate market. Connect with us today to discuss our real estate lending solutions and how they can help you grow your business.