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RCN Capital offers short-term and long-term financing options for real estate investors. Whether you or your clients are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that suit your needs.

Final loan terms may vary based on loan types, verification of application information, and other risk-based factors.

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RCN Capital values building strong partnerships with industry professionals because partnerships drive our success. Learn more about RCN Capital’s Wholesale Lending opportunities, including the Broker Referral Program and the Correspondent Lending Program.

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RCN Capital is a nationwide private, direct lender. Established in 2010, we provide retail and wholesale lending options for short-term fix and flip financing, long-term DSCR financing, and ground-up construction financing for real estate investors.

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RCN Capital provides a variety of resources that can help you on your lending journey. Find business partners that can help solve any investing problem, learn more about our processes and get answers to the most frequently asked questions.

Leveraging ARV to Maximize Real Estate Returns


Leveraging ARV to Maximize Real Estate Returns
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When it comes to real estate finance, maximizing returns is always a priority. For mortgage brokers, private lenders, and referral partners, how After Repair Value (ARV) works can be a make-or-break for your business. ARV is an important indicator used to gauge the potential profitability of a property once it is renovated or improved. By educating your clients on ARV and offering the appropriate financing solutions, you can deliver value while building your own business.

Here's how ARV operates and how you, as a wholesale lending partner, can use it to serve your customers better and grow your lending business.

Understanding ARV

Before diving into how ARV can benefit your clients and your business, let’s clarify what it means:

After Repair Value (ARV) is an approximation of a property's value after renovations or improvements have been made. It takes into account the current condition of the property, the extent of renovations to be done, and the market value of similar properties in the neighborhood.

For private lenders and mortgage brokers, ARV is an important metric when structuring new construction loans, rental property rehabilitation loans, and fix-and-flip loans. By advising borrowers on how to properly calculate ARV and how to obtain the proper loan products, you are positioning yourself as a go-to expert in real estate investing.

Leveraging ARV for Enhanced Returns

As a third-party originator or wholesale lending partner, providing solutions that maximize ARV can translate to improved loan performance and repeat business. Here's how you can include ARV in your lending strategy:

Educating Clients on Accurate ARV Calculation

Miscalculated ARV can result in underfunded projects or financial loss. By providing education to your clients—real estate developers and investors—on how to properly calculate ARV, you help them make informed investment decisions.

Encourage your clients to:

  • Conduct thorough assessments of the property's current condition
  • Use reliable comparable sales (comps) from the local market
  • Work with appraisers or real estate professionals for a second opinion
  • Factor in market trends and potential appreciation

As a broker or lending partner, you can offer guidance on how ARV impacts loan terms and what lenders look for when assessing risk.

Structuring Loans Around ARV

In organizing loans, ARV can be used to set the appropriate loan amount and the loan-to-value (LTV) ratios. Most fix-and-flip lenders advance loans as a percentage of the ARV, not the purchase price. 

For example:

  • A lender may offer 80% of ARV, meaning if the estimated post-renovation value is $400,000, the maximum loan amount would be $320,000.
  • Compared to traditional bank loans that focus on the "as-is" value, ARV-based loans provide more flexibility for investors.

By understanding ARV-driven lending models, you can connect your clients with financing that aligns with their project needs.

Helping Clients Manage Renovation Budgets

Profitability is achieved when you remain within budget, which every successful real estate investor understands. As a lender or broker partner, you can help borrowers prevent over-leverage by ensuring that the cost of renovations is at par with anticipated ARV.

Encourage your clients to:

  • Prioritize renovations that yield the highest return on investment (ROI), such as kitchen and bathroom upgrades
  • Get multiple contractor bids to ensure competitive pricing
  • Set aside contingency funds for unexpected expenses

By helping your clients stay on track, you reduce the likelihood of funding shortfalls and increase the chances of a successful project, ensuring repeat business for your lending services.

Market Trends and ARV Fluctuations

Real estate trends change, and ARV projections need to be revised based on that. Mortgage brokers and wholesale lending partners who anticipate market changes are in a position to provide more informed guidance to clients about possibilities and pitfalls.

Some key factors affecting ARV calculations include:

  • Supply and demand: A seller’s market may increase ARV, while a buyer’s market can reduce post-renovation sale prices.
  • Economic conditions: Rising interest rates and inflation can impact property values and borrower costs.
  • Location-based trends: Some neighborhoods see rapid appreciation, while others stagnate.

By providing market insights, you position yourself as a knowledgeable and trusted partner, helping clients make informed investment decisions.

Expanding Your Business with ARV-Based Financing

For third-party originators, focusing on ARV-based lending can bring in new business leads. This is how you can incorporate ARV-specific financing in your business:

Building Relationships with Real Estate Investors

Networking with rental property owners, developers, and fix-and-flip investors can create steady deal flow. Most of these investors use private lenders who comprehend ARV-based financing. 

To attract more clients, consider:

  • Hosting educational webinars on ARV and fix-and-flip financing
  • Partnering with real estate investment groups and meetups
  • Creating content that highlights successful ARV-based deals you've helped fund

By positioning yourself as an expert in ARV financing, you can gain more referrals and long-term clients.

Partnering with Private Lenders Who Offer ARV-Based Loans

Not all lenders base loans on ARV, but lenders who do can offer superior leverage and financing opportunities for your customers. Having relationships with lenders offering ARV-based financing provides you with competitive loan products to fulfill investor requirements.

Look for lenders who provide:

  • High LTV fix-and-flip loans based on ARV
  • Streamlined approval processes for real estate investors
  • Fast closings to keep projects on schedule

By aligning with lenders that understand ARV, you enhance your ability to serve clients while growing your brokerage business.

Leveraging Referral and Affiliate Partnerships

In addition to direct lending, lending partners can monetize ARV-based financing through referral and affiliate programs. Most private lenders, such as RCN Capital, provide compensation programs for brokers and referral partners who generate business.

By referring clients to ARV-based loan programs, you can:

  • Earn commissions on closed loans
  • Strengthen relationships with real estate professionals
  • Build passive income streams while expanding your business

Wholesale lending is a relationship-driven industry, and leveraging ARV financing can help you establish yourself as a go-to partner in the real estate investment space.

Why Work with RCN Capital?

At RCN Capital, we specialize in ARV-based financing solutions that help real estate investors succeed—and provide mortgage brokers and lending partners with a competitive edge.

Our programs include:

We’re committed to providing industry-leading loan products and competitive compensation for our partners.  Connect with us today to discuss our ARV-based financing solutions and how we can help you grow your business.