How to Fuel Investment Growth with Smarter Rental Property Financing

In today’s competitive real estate market, investors need financing solutions that meet the unique needs of their projects. More importantly, they need to connect with brokers who understand the nuances of rental property financing and can help them scale faster and smarter. As a broker or lending partner, there are key steps you can take to help clients win in the rental property space. Better financing leads to more successful investors, and brokers too can benefit from providing clients with the best financing options. Continue reading as we explore some of the tips and strategies you can utilize to ensure long-term growth for both you and your clients.

Know the Investor’s End Game

Every investor has different long-term goals, and it’s important to have that conversation right away so you can guide the client in the right direction. Ask the right questions to learn what exactly the investor is trying to achieve, and from there you can build out a viable strategy. This includes learning about their experience level, comfort with risk, target ROI or cash flow, and current financial situation. For example, there are some investors who are just looking for simple buy-and-hold properties they can manage with little to no effort. On the other hand there are BRRR investors, who acquire properties quickly and like to stay heavily involved in the process. Understanding the full picture allows you to better tailor financing options to each of your clients.

Introduce Smarter Financing Strategies

Not every client understands what options are available for financing investment projects. It’s up to you to provide them with not just any loan, but the right one. Take the time to discuss all their options, including DSCR loans from private lenders who operate in the real estate space. These loans focus on the investment’s profitability rather than a borrower’s creditworthiness, which means they have less stringent requirements and can be approved much faster. Private lenders are also more flexible when it comes to loan terms, so investors can tailor them to their projects specific needs. By matching investors with the best loan options, you help them see financing as a tool that supports their success, rather than a hurdle.

Customize Financing Based on the Property and the Market

Another way to ensure your client is getting the right financing is by tailoring it specifically to the property and real estate market. Single family properties are ideal for conventional or FHA loans for instance, while multifamily properties offer better cap rates, opening them up to alternative financing options (such as DSCR loans). Local rent trends and vacancy rates may affect an investment’s return, so it’s important to take these into consideration when determining financing. Utilize market data and your own expertise to get a better understanding of the investment, and work with your clients to guide expectations and come to a loan decision that benefits everyone.

Partnering with Investors for the Long Haul

Building a working relationship with your investor clients ensures long-term success, because you can guide their strategies over time and correct course if they make a mistake. It’s how you create repeat business opportunities for your business. The key to building lasting relationships lies in providing value beyond the loan, even offering guidance before they go under contract. And as you continue to work with rental property investors, you can educate them on how to improve returns with proper maintenance, strategic upgrades, and debt restructuring opportunities (such as refinance loans). You play an important role in an investor’s team, serving not just as a financing provider but more as a strategic advisor that assists them in reaching their long-term goals.

Work With a Lender That Supports Smarter Investor Financing

The other key piece of the puzzle is choosing the right financing provider to work with. There are many lenders that operate in the real estate space, but not all are created equal. Look for a lending partner that specializes in rental real estate, with a good reputation and track record of delivering financing. A trusted financing partner will understand the unique needs of these investments, and prioritize speed & transparency to ensure their success. Some partners might even go above and beyond, offering additional resources such as white label marketing materials and professional connections to empower you to deliver the best experience for your clients.

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 smarter rental property financing to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.