The Smart Broker’s Playbook for Rental Property Investing

Rental properties have always served as a solid foundation for a healthy real estate portfolio. As a broker or lending partner, understanding the benefits of this asset class and how it helps build long-term wealth for your clients is a crucial part of the service you provide. Aside from helping clients finance projects, you play a key role in structuring deals for them and helping refine their investment strategy. Brokers who go above and beyond for their clients in this way build lasting relationships with more opportunities for repeat business.

Are you looking to master the ins-and-outs of rental property investments to provide stellar service to your clients? Continue reading for our guide designed specifically for brokers and lending partners, so both you and your clients can succeed.

Know Your Rental Investor Client

The more you understand about your client’s situation, the better and more relevant your solutions can be. For instance, you wouldn’t recommend a large multifamily home to a client with no previous landlord experience. Some clients might be looking for more hands-off passive income, while others are experienced BRRRR investors who like to be involved in their projects. Knowing your client’s motivations and long-term goals helps you determine if a decision aligns with their strategy. Some great questions to ask include:

1. What’s your overall investment strategy or long-term goal?
2. How experienced are you with rental properties?
3. What’s your target monthly cash flow or return on investment?
4. What’s your timeline for closing?
5. How are you analyzing your rental deals?
6. Do you have a preferred lending partner already?

Master Lending Options for Rental Properties

After getting to know your clients, you’re in a better position to recommend financing programs to them. There are several types of loans available for rental properties, so be sure to go over the pros and cons of each option with clients. Conventional mortgages offer lower interest rates, but they also come with a lengthy application process as well as stringent loan criteria. Non-QM options from private lenders have more lenient funding criteria, and can be great for investors who value speed and flexibility with financing. These loans are also asset-based, which means your borrower can still qualify for funding even with less-than-perfect credit, or non W-2 income.

Structure the Deal Like a Pro

Brokers can stand out by advising their clients on how to structure smarter deals. Cash flow is such an important metric that investors tend to get wrong when making estimates. You can offer your insights on which markets to invest in, as well as with analyzing properties. Help them get more accurate numbers so they can make better comparisons and more profitable purchase decisions. Additionally, walk them through the process of calculating DSCR and how it qualifies properties for financing. This also serves as a great segue to begin the conversation about private lending options and financing in general.

Win Repeat Business and Build Investor Loyalty

The key to building long-term business relationships with clients is positioning yourself as more than just a financing provider, but an advisor and business partner. Take time to educate them on the specifics of real estate investments, including market trends, estimating returns, and what to look for in a property. Your advice is a great way to offer value beyond the loan, and build trust as a professional in the space.

Staying in regular communication is also a great way to remain top of mind with your past clients. You should create an email list and send regular updates to past clients with relevant info like current market trends, rate updates, and deal opportunities. These emails also help build your brand and strengthen your position as an expert source of real estate advice.

Leverage a Wholesale Lending Partner

Lenders who specialize in real estate financing understand the importance of speed and communication when funding investment deals. Working with a wholesale partner that has experience in the space lets you provide better and faster service to your clients, which might just be the difference between a profitable investment and a poor one. Look for lenders that have good reviews, with established partnership programs for their brokers and wholesale lenders.

At RCN Capital, we offer broker partners the resources they need to close more deals and achieve success. This includes competitive compensation structures, fast pre-approvals, and a dedicated lending team that ensure an efficient process from application to closing. Partner with us today to gain access to these resources and start growing your business.

RCN Capital

The best way to save on a real estate investment is to obtain financing from 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 professionals. If you are looking to offer rental property financing to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.