Commercial-Capital-Training-Group

Report
Commercial Capital Training Group
February 5, 2014
Presenters:
Jeffrey Tesch
Dave Olson
Brian LaBua
Managing Director
VP of Finance and
Business Development
Chief Loan Officer
Jeffrey Tesch
Managing Director
Program Agenda
I.
Introduction/Company Overview
II. Company Products
III. Target Market
IV. RCN Capital’s Niche in the Industry
V. Loan Criteria
VI. Loan Qualifying Factors
VII. Transactions RCN Capital Will/Will Not Fund
VIII. Application Process
IX. Deals that RCN Capital Has Funded
X. Questions & Answers
RCN Capital™ Overview
•RCN Capital, LLC is a national private lender. We provide short-term, residential
and small balance commercial, non-owner occupied, property-backed loans.
•Founded in 2010, RCN Capital is located in South Windsor, CT, and is affiliated
through common ownership with TicketNetwork, a large competitor of StubHub.
RCN Capital is audited by KPMG.
•RCN Capital services its own self-funded portfolio in excess of $50M, with $25M
in additional available capital.
•RCN Capital has funded 350 nationwide transactions since its inception and has
doubled in size every year.
•Approximately 75% of our business is through brokers. Brokers protected.
We
Brokers!
Private Commercial Loans
•Primarily used to fund the purchase of non-owner occupied (NOO)
residential and small commercial properties. Highly focused on the
underlying asset and the loan to value ratio, rather than the personal credit
of the borrower.
•Provide financing for various scenarios to small business owners, real
estate investors, developers and contractors with sound exit strategies.
•Can also provide renovation, rehab and construction funds or small
business financing.
•Close in as few as 10 days because the underwriting and documentation
processes are more streamlined than conventional lenders.
Private Commercial Loans (cont.)
We provide short-term, bridge financing.
•Commercial Bridge - Acquisition Financing
•Distressed Construction
•Flip and Rehab - Residential, Multi-family, Apartments, etc.
RCN Capital™ provides solutions
Our flexibility and ability to close quickly provides our borrowers with a clear
business advantage.
Private loans are not for everyone, but can be a financial game-changer.
Dave Olson
Vice President of Finance
and Business Development
Identifying Opportunities:
RCN Capital’s Target Market
Primary Channels
Small Business Owners
Real Estate Investors
Real Estate Developers
Builders/Contractors
Personal Contacts/Networks
Secondary Channels
Other Lenders
Commercial/Residential
Real Estate Attorneys
Brokers
Traditional Bank Lender vs. RCN Capital™
When is Funding Available?
Loan Scenario
Traditional Bank
Lender
Purchase of an owner occupied property

Purchase of a non-owner occupied property
Maybe
Purchase of a foreclosure
Maybe
Purchase of a mixed use property
Maybe
Borrower has filed for bankruptcy
Maybe
RCN Capital
Purchase of a distressed property









Borrower is already financing multiple
properties


Loan needs to be closed in two weeks


Borrower has bad credit
Collateral
Non-owner occupied (NOO) residential,
mixed
use or commercial real estate
Term
12 months
Interest Rate
12% monthly (no prepayment penalties)
Loan Amount
$50k to $2M+
LTV
Closing
Lending Area
Up to 80% of the “as is” value of the
property
As few as 10 business days
Nationwide (except CA, NV and AZ)
Brian LaBua
Chief Loan Officer
Broker Referral Program
Referral Fee
Split Points
50/50
Minimal
Involvement
Heavy
Involvement
RCN Capital™ offers simple referral options for brokers.
The amount of compensation earned depends on the broker’s level of
involvement and the loan scenario.
Fundamental Pyramid of Loan Approval
Income
Credit
Equity
RCN Capital™ Loan Qualifying Factors
Exit Strategy
Resume
Experience/Background Cash Flow
Existing Leases
Reserves
Saturation Levels
Acquisition
Market
Approval Type
Above all factors, RCN Capital places an emphasis on
the borrower’s exit strategy.
Common Exit Strategies
•Sell the property and use the funds
to pay off the loan.
•Refinance with a conventional
mortgage lender, SBA lender,
finance company, ABL lender, etc.
•Buy and hold.
Loans RCN Capital™ Will Not Fund
Owner Occupied Properties
Partial Owner Occupancy of a Property
Heavily Contaminated Properties
Projects Without an Exit Strategy
Properties That are Inflated
Post Down Payment
Properties That Have Been Equity
Stripped Over a Short Period of Time
Application Process
We need the following items to complete the application:
Personal financial statement
Borrower signature authorization for
credit and background checks
Form 4506-T
Two years’ tax returns
2 months bank statements
Appraisal authorization form
Purchase contract
Basic Timeline
10 Days
20 Days
Residential Rehab
Small Commercial
30 Days
Construction
Deals RCN Capital™ Has Funded
Commercial Steakhouse
in Greenwich, CT
$2.4M Bridge Loan
•The borrower had a commitment for
long-term financing through a
traditional lender.
•However, he needed immediate funds
to pay taxes on the property and to
payoff the existing second mortgage.
•RCN Capital financed a bridge loan to
fill the gap while the borrower waited
for the bank loan to close.
•The broker earned $36k in fees from
the deal.
Three-Unit Residential Property
in Mount Vernon, NY
$89k Loan for the Purchase of a
Distressed Property
•The borrower was eligible to receive
funding from a traditional bank, but the
property itself was not because of the
condition it was in.
•Private lenders often look into the
project that the borrower wants to
accomplish and are willing to lend on
non-traditional properties.
•The broker earned $2,700 in fees from
the deal.
Single Family Colonial Home
in Chatham, MA
$1.2M Bridge Loan
•The borrowers were seeking
conventional financing but needed to
close quickly.
•RCN Capital™ provided funding so
the borrower could purchase the
property. The borrower could then get a
conventional loan in 60-90 days.
•The broker earned $24k in fees from
the deal.
51-Unit Apartment Building in Houston, Texas
$625k Bridge Loan
•The borrower needed a loan to payoff seller
financing that had come due.
•The borrower had high credit scores, steady
income and a great deal of assets, and would
have easily qualified for conventional financing.
•However, a bank would take 3-6 months to
provide him with the financing he needed and he
needed funding immediately.
•RCN Capital™ was able to provide him with the
funding he needed.
•The broker earned $7k in fees from the deal.
One-Story Retail Strip Mall
with Seven Units in Centereach, NY
$1M Commercial Bridge Loan
• A repeat borrower needed a bridge loan to
fund the purchase of an investment property.
•The borrower was eligible to receive funding
from a traditional lender, but needed to close
quickly, which a bank could not do.
•Using a strip mall that he owned free and
clear as collateral, the borrower was able to
utilize dead equity to acquire new assets.
•The broker earned $20k in fees from the
deal.
Hotel and Multi-family Portfolio in
North Stonington, CT
$1.5M Loan
•The borrower wanted a loan to refinance several
mortgages and various small bank loans.
•RCN Capital™ secured 11 properties allowing
the borrower to expand his real estate portfolio
while reducing his monthly outlay by funding a
large blanket mortgage.
•The broker earned $16k in fees from the deal.
Broker Compensation
•Fees are paid to brokers off the HUD and
are memorialized in a transaction-specific
agreement.
•A check is sent directly to the broker at
closing.
•All fees that are earned by the broker are
disclosed on the commitment letter up front.
Contact Information
Brian LaBua
Chief Loan Officer
[email protected]
P \ 860.471.1024
RCNCapital.com
Questions?

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