Fast Funding Solutions Every Real Estate Broker Should Know

Today’s real estate market is as competitive as ever, with limited inventory contending with stabilizing rates creating a tough environment for investors looking to make a profit. To beat out the competition, investors need fast funding that allows them to secure the lucrative deals that are available. As a broker or lending partner, providing clients with these powerful financing solutions not only helps them, but it also helps you grow your business. And in order to do that, you’ll need to understand the options that private lenders can offer your clients, and the advantages they have over conventional financing.

Read on as we cover the private financing solutions available to brokers today and how they can benefit your lending operation.

Key Takeaways:

• Fast funding is essential for real estate investors to compete and win deals in today’s low-inventory, high-competition market
• Private lending solutions give brokers the speed and flexibility needed to better serve investor clients
• Bridge loans, fix and flip loans, DSCR rental loans, and cash-out refinances are key fast-funding options brokers should understand
• Private lenders offer advantages over conventional financing, including faster approvals and asset-based underwriting
• Choosing the right lending partner helps brokers close faster, build stronger client relationships, and grow their business

Why Fast Funding Is Essential for Investor Success

Speed is crucial for making winning offers on the limited number of deals available in today’s market. Competition is high, and many properties receive multiple offers, often without contingencies. Similarly, distressed properties and other time-sensitive opportunities require fast funding so investors can get to work quicker, and see returns sooner. Sellers tend to prioritize buyers who make offers that feature rapid and reliable closing timelines. The brokers who understand the needs of investors in today’s market and can provide them with streamlined solutions will stand out from the competition and close more deals.

Here are 4 examples of the fast funding solutions that private real estate lenders can provide you with:

1. Bridge Loans: The Go-To Short-Term Funding Solution

Bridge loans are one of the fastest funding sources available to real estate investors. These loans have shorter terms and a streamlined application process that can deliver financing in a matter of days. Bridge loans are asset based, which means approval is less dependent on the borrower and more focused on the value of the property and whether the deal is financially viable. These loans are an ideal solution for off-market properties (auctions/foreclosures), value-add opportunities, and making stronger offers in highly competitive markets.

2. Fix and Flip Loans for Fast Renovation Capital

Fix and flip loans are similar to bridge loans in that they are shorter in duration, but they are specifically structured for rehab projects. Loan underwriting is based on the after-repair value (ARV) of the property, and they can provide additional funding for renovation costs on top of acquisition expenses. Typically, loan interest is only charged on rehab funds after they have been issued through specific draws, which can save borrowers money during the renovation process. Brokers should include fix and flip financing in their toolkit because it enables you to fund a wider variety of deals and market yourself as a comprehensive loan provider.

3. DSCR Rental Loans with Streamlined Approval Processes

For rental property investors, the limitations that come with conventional or FHA loans can be a significant roadblock. Not only is there a limit on the number of properties that can be financed, but loan approval is typically a lengthy process that is based on personal income, which means borrowers with non-W2 income may be rejected. Debt-Service Coverage Ratio (DSCR) loans remove these limitations, offering investors a financing program based on property cash flow which is designed to facilitate portfolio expansion. These loans are also typically approved much faster than conventional mortgages, which enables borrowers to win more often in today’s competitive market environment.

4. Cash-Out Refinances to Unlock Immediate Capital

Cash-out refinances are a great way for established investors to make use of the equity they have built in their portfolios. By utilizing private loans, borrowers can get access to funding faster to make new acquisitions. Private lenders understand the urgency of real estate investing, and their loans have a streamlined approval process that lets investors strike while the market is hot. Many lenders also offer portfolio loans, allowing borrowers to pull equity from multiple properties simultaneously. As a broker, you should partner with lenders that offer a range of financing options, including portfolio loans, so you can meet the unique needs of any given client.

How Brokers Benefit by Offering Fast Funding Solutions

Your lending business can benefit massively from providing clients with faster financing solutions. For starters, loans designed for shorter projects like home flips can open the door to a new stream of clients who focus on these deals. Building a reputation for speed and reliability can also be advantageous. It allows you to create stronger long-term partnerships with clients, helping you receive more repeat business and referrals to other investors. You can also highlight these advantages in your marketing and on social media to potentially attract even more clients.

To ensure faster loan turnaround, create a standardized submission packet for each client that includes property details, comparables, and necessary documents like a proof-of-funds letter. Building strong relationships with lenders can further eliminate delays, especially as you become more familiar with their loan process and can prepare accordingly.

Choosing the Right Lending Partner for Fast Closings

One of the most crucial decisions you will make to improve your lending operation is choosing the right financing partner to work with. Brokers should look for a lender that prioritizes consistent execution, offers transparent terms, and values communication and responsiveness in their process. This will make it easier for you to help clients reach their goals and improve their overall financing experience, thus making them more likely to return to you for future loans. Choose wholesale lenders who go above and beyond, and offer additional resources that support your business such as marketing materials, free training, and connections to real estate professionals that can facilitate your clients’ deals.

RCN Capital

To help your clients maximize the returns on their next investment, partner with a lender that can provide you with the best leverages and rates. RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors and lending partners. If you are looking to offer fast financing solutions to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.