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After holding rates high through 2024 and early 2025, the Federal Reserve made its first rate cut of the year in September, reducing the benchmark range to 4.00%–4.25%. Mortgage rates followed and fell to about 6.35%, the biggest reduction in over a year. This marks a big change in how much it will cost to borrow money and how investors feel about the real estate market going forward.
As rates go down, investors are becoming more interested in making new purchases, refinancing, and growing their portfolios. It's also easier for borrowers to get money from sources other than banks now that private credit is growing and liquidity is better.
This gives brokers more chances to bring in new business, as long as their products and processes are set up to take advantage of the new demand.
Understanding the Fed's Move and Market Response
The Fed reduced rates in September because the job market data was getting worse. Unemployment went up to 4.3% in August, and the average number of new jobs added to the payroll each month from June to August was only 29,000.
The markets expect more cuts. The Fed's own predictions say there will be 50 basis points in cuts by the end of the year.
"Most analysts think it would have to be a pretty big change in rates to matter a lot for the housing sector," said Fed Chair Jerome Powell. He also said that lower mortgage rates are good for investments since they lead to more building and property demand.
Five Investor Opportunities Unlocked by Lower Interest Rates
1. Refinance and cash-out plays — immediate liquidity for new investments
Why it matters: Lower rates reduce the monthly payments on loans and make it easier to manage the costs of renting out property. Cash-out refinances are a good option for investors with equity to get money for new purchases or repair projects.
How to position it: Run two scenarios side by side: one with the current payment and one with a refinance loan.
Product fit: DSCR and long-term rental programs work well here. Emphasize competitive long-term rates and realistic LTVs that keep cash flow going.
2. More profitable fix-and-flip economics (ARV math improves)
Why it matters: When carrying costs go down, rehab windows and profit margins get bigger. Lowering the cost of financing can be the difference between a very profitable project or only a slightly profitable one.
How to position it: Use lender-stamped pre-approvals and ARV models to show how lowering rates affects net profit.
Product fit: ARV (After Repair Value) products that cover rehab costs and only charge interest on draws provide investors with more flexibility and help them get to market faster.
3. Faster portfolio expansion for buy-and-hold investors
Why it matters: Lower rates make cash-on-cash returns better and let investors own more properties with coverage ratios that are still acceptable. This makes it more appealing to buy multiple properties at once.
How to position it: For landlord clients, establish a 3–5 property expansion strategy that includes refinancing an existing property into cash, buying another one with conservative DSCR underwriting, and doing it repeatedly. Point out scalable underwriting paths and solutions for locking in rates.
Product fit: Long-term rental loans and multi-family programs with flexible LTVs and competitive rates.
4. Lower short-term financing costs for new construction and staged builds
Why it matters: Lower short-term borrowing costs, lower carrying costs, and better projected cash flows make these projects more viable to investors.
How to position it: Present tiered draw schedules and cautious absorption timelines. Show how lower construction holding costs affect project feasibility.
Product fit: Developers can count on getting money for construction projects with financing that includes scheduled draws and good loan-to-cost ratios. This often leads to cheaper interest costs during construction.
5. Opportunistic purchases at auctions and distressed sales
Why it matters: People who buy at auctions and in slow markets value speed, not the lowest rate. Still, reduced rates give you them options for getting out: you can sell, refinance, or turn a home into a rental under better conditions.
How to position it: Start with speedy pre-approval, a viable short-term exit plan, and LTV/ARV evaluations that back up the financials. Show how to refinance after closing into longer-term, lower-rate loans.
Product fit: Short-term bridge and hard-money loans that turn into long-term loans subsequently make it easy to go from buying to refinancing.
How Brokers Should Package These Opportunities
Pre-triage every lead (5–10 minutes): Look at the sponsor's experience, reserves, double check LTV/ARV math & exit plan. Early screening shows investors that you know what you're doing and saves time on appraisal and title work.
Lead with lender-stamped pre-approvals: Use speedy pre-approvals that make it apparent how a reduced rate would help an investor achieve cash flow or buy another property. Numbers that can be shown are better than a hazy hope.
Use side-by-side deal comparisons: Show the current situation next to the "rate-improved" outcome, which includes the monthly payment, cash flow, overall return on investment, and time to refinancing.
Standardize submission packets: Provide a signed purchase agreement, an itemized rehab budget, a comps/feasibility memo, a sponsor profile, and a draft HUD with a broker fee. Standardization speeds up underwriting and checks claims about turn times.
Sell the path to permanence: The true difficulty for many investors is how to turn a short-term gain into a long-term asset. Plan how to get out: whether it’s selling, refinancing into a long-term rental, or moving the money into a portfolio finance product.
Highlight product breadth and protections: When making a pitch, talk about RCN Capital's loan options, such as ARV, bridge, DSCR, and construction loans. Also, include broker protections, such as fee transparency on commitment letters and HUD statements. That makes things easier and fosters trust.
Operation: Win the Next 30–60 Days
Day 1–15: Update your loan comparison templates and sale sheets that clients see with the most recent rate scenarios. Every investor pitch should have a "rate-impact" worksheet.
Day 15–30: Start a pilot by putting three of your current clients through refinance or modest acquisition situations and keeping track of how long it takes to get pre-approval and what happens.
Day 31–60: Use the outcomes of the pilot in short case studies to get the word out and get more clients on board. Use white-labeled marketing to reach certain groups of investors, including flippers, buy-and-hold investors, and builders.
Measurement: Keep an eye on the time it takes to get pre-approval, the conditional ask rate, the time it takes to close, and the amount of repeat business you get in the next 12 months.
Why RCN Capital is a Natural Partner in a Lower-Rate Cycle
- Product breadth across ARV, bridge, DSCR, multifamily, and new construction—so clients have more options.
- Tools for operations, such as a white-labeled Loan Management System to speed up intake and give you milestone alerts.
- Free training through Amplify modules that help you and your employees learn the ins and outs of RCN’s products and underwriting process.
- Broker protections: HUD and fee disclosure on commitment letters cut down on problems at closing.
- Funding stability: RCN Capital has a proven history of providing investors with financing for real estate projects, which means you can rely on them as a lending partner.
If lower rates create opportunities, partner stability and process determine whether those opportunities actually close.
Explore Rate-Driven Opportunities with RCN Capital
Lower borrowing rates are creating more opportunities to refinance, add to a portfolio, and build new homes. Brokers will now need to move faster, have clear financial predictions, and be in the right place to turn leads that are based on rates into closed loans. Brokers who get ready now will be in the ideal position to help investors achieve their goals.
RCN Capital gives you the tools, products, and broker-focused programs you need to take advantage of this time. Check out RCN Capital's Broker Page to find discover ways to work together that can help you turn today's low rates into tomorrow's growth.