Many mortgage professionals, especially brokers, private lenders, and referral sources, are always on the hunt for real estate investment that returns solid money over the long term, as well as stable cash flow. Multifamily apartments have long been an ideal solution, not only for real estate investors but wholesale lenders as well. As a third-party originator, the suggestion of multifamily properties to your customers can make you a go-to resource as well as boost your own business prospects. Let's see why multifamily properties should be on your list and how they can work to the benefit of you and your customers.
Perhaps the most attractive reason to urge your clients to invest in multifamily properties is their robust cash flow. Unlike a single-family residence, multifamily properties have several rental units, providing a constant flow of revenue. For brokers, this means more frequent financing requests as clients look to diversify their portfolios.
Lenders prefer multifamily properties because of their regular revenue streams, which reduce the chances of default on payments. Even if a few units are empty, the rest of the occupied units still provide income. This predictability makes it easier for borrowers to qualify and for brokers and referral partners to maintain a stable stream of deals to close.
For wholesale lending professionals, scalability is an important consideration in enabling clients to be successful in the long term. Multifamily properties enable investors to scale their real estate portfolios more effectively than single-family residences. Rather than dealing with multiple transactions for individual properties, one multifamily transaction can produce several income-producing units simultaneously.
For brokers, this means larger loan volumes and more commissions in less time. Having the clients begin with smaller multifamily units, like duplexes or four-unit complexes, and gradually scaling up to larger complexes can build a long-term relationship where you continue to provide financing support as their holdings expand.
The one misconception that investors have is that it is more difficult to finance multifamily properties. But in the eye of the lender, they are actually considered a better bet than single-family properties. Lenders find the built-in cash flow stability that multifamily properties have more appealing and thus make it easier for brokers to obtain competitive financing for their clients.
Also, funding alternatives like DSCR loans, bridge loans, and long-term rental loans are easily accessible to multifamily properties. Wholesale lenders and brokers who know these funding options well can establish themselves as specialists and gain more clients who seek worthwhile investment opportunities.
From an operating perspective, to have one multifamily property can be more economical than to own several single-family homes scattered here and there. For brokers, this translates to clients being inclined to keep reinvesting in this asset type, leading to repeat business and long-term customer relationships.
Expert property management services can be an excellent choice for investors who don't want to get involved, making multifamily investment all the more appealing. Through the guidance of clients on efficient management practices, brokers and wholesale partners can also solidify their credibility and worth in the investment process.
Tax advantages are an important factor in the profitability of real estate investments. Multifamily investment properties have some tax benefits, including the deduction of expenses incurred for property management, maintenance, and utility costs. Cost segregation studies further enable investors to depreciate different elements of the property on a cyclically accelerated basis, which lowers taxable income.
For private lenders and brokers, emphasizing these tax benefits can be a means of persuading customers of the long-term financial returns of multifamily investments. An educated investor is more likely to seek out more deals, giving brokers a steady stream of business opportunities.
One of the biggest benefits of specializing in multifamily financing as a wholesale lending partner is the potential for long-term relationships. Investors who begin with one multifamily property tend to seek to grow their portfolios in the future. By offering valuable information, competitive financing, and continued support, brokers can position themselves as trusted advisors throughout the real estate investment process.
Referral partners and affiliate lenders with a focus on multifamily financing also benefit from repeat business and expanded referrals. In many cases, investors seek advice from trusted professionals, resulting in a steady pipeline of new customers.
At RCN Capital, we know what the brokers, the private lenders, and the third-party originators need. Our flexible and competitive loan programs are structured to finance multifamily investments and assist brokers in securing funding for their clients. If you're working with a first-time borrower purchasing their first multifamily property or an established investor diversifying their portfolio, we provide customized solutions to suit their requirements.
By partnering with RCN Capital, brokers can access:
Multifamily properties provide unmatched benefits for investors, and brokers who comprehend these advantages are poised for long-term success. With greater cash flow, less complicated financing, tax benefits, and scalability, this asset class is a home run for borrowers and their lending partners alike.
As a wholesale lender, third-party originator, or referral partner, adding multifamily financing to your business model can result in increased deals, better client relationships, and more revenue. Partner with RCN Capital and offer your customers the most comprehensive financing options in the market and expand your business in the process.