If you've been in the market recently, you've probably noticed that transactions are slipping away at the last minute because the lender is slow to act. With private lending now at over $2 trillion, mortgage applications down 6.2% this year, and 30-year fixed rates hovering at 6.72%, traditional banks continue to limit credit for borrowers. For brokers, this means more deals breaking apart because the financing does not fit a client’s needs.
At RCN Capital, we hear scenarios like this every day—loans being hung up by never-ending doc requests, silent underwriters, or approvals arriving too late to be of use. To help solve these issues, we've designed our whole process to be broker-friendly.
In this guide, we'll walk you through the most common hard money lending issues we deal with and demonstrate how RCN Capital's broker-first system addresses them so you can close faster, earn more, and keep your pipeline flowing.
Modern lending conditions create special challenges that brokers face daily. According to recent market intelligence, private lending currently accounts for 12% of the overall lending market in Q1 2025, up from 8% last year. This uptick indicates frustration by borrowers with traditional financing constraints.
Overcoming lending challenges starts with understanding where traditional lenders typically fail:
Speed Limitations: Traditional banks typically take 30-60 days to make approval decisions. Real estate investors bidding on off-market properties need responses within days, not weeks. When a seller requests proof of funds and a rapid close, traditional loan timelines are deal-killers.
Rigid Underwriting Standards: Banks use one-size-fits-all criteria that tend to overlook the subtleties of investment properties. A fix-and-flip deal with high after-repair value (ARV) potential gets turned down because the property isn't in top condition according to bank standards.
Limited Flexibility: Investment approaches are vastly different. The needs of a portfolio investor are entirely different from those of a first-time flipper. Classic lenders provide cookie-cutter products that never match more particular investment objectives.
Documentation Overload: Banks require huge amounts of documentation that may take weeks to assemble. By the time the borrowers have accumulated everything, market opportunities have vanished.
The following are some of the most common challenges for brokers, along with some practical solutions you can apply to navigate them.
Problem: Assembling transactions without verifying sponsor experience, liquidity, or a viable exit strategy.
Why it matters: Lenders need assurance that the sponsor will get the job done. Short of this, pre-approvals grind to a halt or conditions skyrocket.
Fix: Ask for a one-page sponsor profile, bank statements to verify cash reserves, and a brief exit strategy memo with each submission. This minimizes underwriting questions and shortens turnaround times.
Problem: ARV or rehab estimates that assume best-case outcomes.
Why it matters: Valuation mistakes quickly erode lender margin and borrower returns.
Fix: Stress-test ARV by -5% to -10%; request line-item contractor bids and a 5%–10% contingency on budget totals.
Problem: Treating construction projects like simple flips or vice versa.
Why it matters: Each product has different LTVs, draw mechanics, and inspection needs.
Fix: Align project type with programs—apply construction programs to ground-up deals, and short-term fix & flip programs to rehabs—then clearly detail the fit in the cover memo.
Problem: Missing basic documentation (purchase agreement, contractor license, comps, proof of reserves).
Why it matters: Underwriters will stop and ask, pushing the deal by days or weeks.
Fix: Utilize a submission checklist. When available, submit through a loan-management platform that alerts to missing items beforehand.
Problem: Fee arrangements not put in writing—including the risk of being cut out.
Why it matters: Commission disputes destroy trust and occur across pipelines.
Fix: Include broker fees in the commitment letter and on the HUD; pre-confirm terms before submitting deals for funding.
Problem: Relying on partner “promises” instead of documented funds.
Why it matters: Unconfirmed equity causes last-minute capital gaps and extension requests.
Fix: Make bank statements, escrow deposits, or signed equity commitment letters conditions of final approval.
Problem: Assuming ideal permitting and inspection schedules.
Why it matters: Delays increase carry costs and push margins down.
Fix: Include buffer days, model worst-case carry, and demand a documented contingency reserve.
Problem: Overlooking state-by-state lending or brokerage rules.
Why it matters: Regulatory misses can stop closings and create legal exposure.
Fix: Check jurisdictional requirements early and involve counsel for complex capital structures.
Problem: Leaving investors in the dark about timing, draws, or fee disclosure.
Why it matters: Frustrated borrowers are unlikely to return or refer.
Fix: Provide a simple timeline at application, weekly status updates, and a clear draw schedule.
Problem: Not leveraging a lender’s training, portal, or white-label marketing.
Why it matters: Inefficiency costs time and makes deals pricier for borrowers.
Fix: Take advantage of ready-to-use training, utilize white-label assets to pitch to clients, and leverage the lender's portal to minimize friction.
RCN Capital structured its wholesale program with the issues listed above in mind. Here's how our tools and methodology are designed to alleviate these problems:
Adopt these short, repeatable steps to win more approvals and keep clients happy.
These actions help minimize surprise and allow you to keep clients on board over the long term—particularly in a setting where conventional mortgage volume is weak and private alternatives look more and more appealing.
To become an RCN Capital broker, there is a simple four-step procedure that is ideal for quick implementation:
Step 1: Registration
Complete the online Broker Registration Application, providing basic business information and licensing details.
Step 2: Onboarding Call
Schedule a welcome call with our Broker Onboarding Specialist to discuss program details and answer initial questions.
Step 3: BLN Training
Complete self-guided training on the white-labeled Loan Management System, typically requiring less than two hours.
Step 4: Agreement Execution
Sign the broker agreement via DocuSign and begin referring deals!
This streamlined onboarding process usually takes less than one week from initial inquiry to first loan submission.
Connect with us today to discuss how our financing solutions can assist you in overcoming lending challenges in real estate while helping you establishing a more profitable brokerage.