Published By Faith Stewart at January 16th, 2019
Remember when it was almost impossible to find “New Kids on the Block” tickets? That’s not the case so much anymore, but back in the day, it could be almost impossible. It can be almost as challenging for real estate investors to find the financing they need from traditional lenders. The reasons for this are many. There is a higher risk with many real estate investment deals due to the number of uncertainties involved. In addition, credit scores are often lower across with board for real estate investors. This is because they often have multiple loans open at one time for different projects, which affects their credit utilization ratios. LendingOne is trying to make the process less challenging.
The company began as Crestar Funding, but changed its name in November 2016 to LendingOne. In the press release, they say that they realize the potential for this company was much larger than they originally thought.
They operate online in every state and the District of Columbia except for Alaska, Nevada, North Dakota, South Dakota, and Utah with a team of over 35. That’s not bad for a company that only started four years ago.
LendingOne is a direct real estate investing lender. In 2014 Bill Green (CEO) and Matthew Neisser (COO) joined forces to open a private real estate lending company. Their mission was to streamline and speed up the process of borrowing for real estate investment through technology.
Drawing on Green’s skill and expertise in creating world class organizations, and Neisser’s background in technology and finance, it appears that they have done just that with LendingOne. The goal, which they seem to have met, was to create a faster and easier way to apply for and receive approval for loans so that borrowers can more easily grow their real estate portfolios.
They lend to citizens of the United States, Canadian citizens, and permanent resident aliens.
There are a variety of options when it come to real estate loans with LendingOne. These include:
If your spot on the real estate investment stage includes purchasing homes to rehab and resell for a profit, this the where you want to start. In the course of our LendingOne review, we found that their rates start at 7.49% and go up to 12.9% on these loans. You can get a quote for what your rate will be in two minutes online.
They will loan up to 90% of the purchase and rehab cost, with a minimum loan amount of $75k up to $4 million. There is no interest charged on unused funds, and there is no penalty for repayments. The minimum FICO required for a Fix-and-Flip loan with LendingOne is 600.
You will need to have the following documents on hand.
Remember to send copies. Never send originals.
If you are more of a rent them than sell them kind of real estate performer, you will be more interested in the rental loans. We took a close look at the RentalOne and Apartment Bridge loans during our LendingOne review.
This is available on a 5, 7, or 10-year ARM, or as a 30-year fixed loan. Arms start at 4.99% while the 30-years fixed stars at 5.49%. The loan minimum is $75k and the maximum loan amount is $2 million.
The minimum FICO score for the RentalOne loan is 640. You do not have to turn over income verification, not even a W-2. It appears, however, that there is a pre-payment penalty on this one.
These are available for buildings with 5 to 35 rental units. There is no interest on funds that are not drawn, and the terms range from 12 to 36 months. The minimum loan amount is $1 million, with a maximum of $15 million.
There is a minimum FICO requirement of 650, but closing is super-fast, sometimes in as little as 15 business days.
Another thing that came up in our LendingOne review was construction loans. They offer these for up to 85% of project costs. Ranging from a minimum of $500K to a maximum of $5 million, these loans are available in terms ranging from 12 to 24 months with fast approval. Eligible properties include single family, townhomes, condos, and multi-family buildings.
If you want to rehab a home to rent, our LendingOne review reveals that you can do that as well. It works like this. You apply for a Fix-and-Flip loan, and then when the rehab is complete, they will roll it into a 30-year fixed rental loan. As a bonus, since you are already a customer with the Fix-and-Flip, you will get a discount on the fees toward your rental loan.
LendingOne offers an easy, fast pre-approval process at no cost to you. You can have your terms and rates in writing before you ever submit an offer. The proof of funds provided with pre-approval makes submitting an offer easier than ever. Pre-approvals are available for amounts ranging from $100,000 to $5,000,000.
Whenever we do a lender review, we always check out their reputation both in the business world and with consumers online. We started this LendingOne Review with BiggerPockets.com. There is a discussion in the forums going back a couple of years. The original question simply asks what the experience of others has been with the company. There wasn’t a lot of information at first, and some assumed the worst simply because they haven’t been around all that long.
However, Matthew Neisser, the Chief Operating Officer himself popped in and responded to some of the questions. This is a great sign, and it shows they are on top of their online reputation and trying to offer stellar customer service and support.
As the conversation continues, several people join in that have used LendingOne recently. They all seem to have had a great experience.
Another stop on our LendingOne review tour is the BBB. As it turns out, not only does LendingOne have an A+ rating with the Better Business Bureau, but they are actually accredited since February 2017.
In the time their file has been open, they have only had one complaint. The borrower took out a loan. Since it was a commercial loan, the debt should not show up on his personal credit report. He claims that the loan officer at LenderOne assured him this would be the case. It did hit his personal report however, so he was understandably upset. After discussing the issue with LendingOne, the company explained that his loan had sold to another lender. Though LendingOne did not report the debt to the borrower’s personal credit report, the purchaser did.
The company wrote a response to this complaint. They made sure to note that they had also been working with the customer directly to remedy the situation. LendingOne asked the purchaser to change their policy, but had no luck. There was agreement as well that the loan officer should have been more forthright that the loan could sell to another lender at some point, and that the buyer may have different credit reporting policies.
This was the only true complaint in the discussion for the entire almost two years, and it was clear the company was working hard to make it right.
The company seems to be pursuing its mission well and reaching its goals. Real estate investors are seeing faster approval, closing, and funding times. LendingOne credits this to their proprietary technology that allows them to streamline the underwriting process.
Faster application processing, along with pre-approval and good reviews from previous customers round out a solid list of pros for this super star.
While nothing is perfect, the only true factor that could count as a con is the fact that the company is only four years old. That will change with time of course, as will all of the things that go along with it if they continue on the path they are on.
If you happen to be newer to the world of real estate investing, you may want to consider these tips before you go much further.
Many real estate investment lenders will not lend to individuals. Form a legal business so that you have the best options available when it comes to funding. LendingOne is just one of many that will only lend to companies.
In real estate, there is even more importance placed on doing honest business. If you cut corners on your rehabs or you are a lousy landlord, word will get out. This will not only cause problems when you try to sell or rent in the future, but it can detour future funding efforts as well.
Especially when it comes to flipping homes, you have to remember location matters. A fabulous home in a terrible location is not going to yield a profit.
Pay attention to what is selling and where. Take note of home trends and what people are paying for, as well as what they are not. This will help you determine how to best utilize your funds.
You may have noticed that the minimum credit score for loans from LendingOne, based on our LendingOne review, were not terribly high. However, if you are not careful, they can slip quickly. Here are some tips on raising your credit score if you need to.
· Next, get copies of all your credit reports.
· Look first at what is pulling your score down so that you know where to focus your efforts.
· Then, review the report for any mistakes.
· If you find mistakes, report them to the issuing agency in writing.
· Be sure to send copies of backup documentation. Never send originals.
· Monitor your credit score continually using a credit monitoring service. This will help you know at any given moment what your credit score is. This is useful when making investment decisions. If you know you need to raise your score before you can borrow more investment funds, you can save yourself a lot of hassle.
Of course, none of this really matters if you are not making your payments on time, so be sure you are doing that. Nothing helps your credit score like consistent, on time payments.
Based on our LendingOne review, we give them 4 out of 5 stars. The lacking star is due only to the fact that they are so new. They have a solid mission. They are looking to use their expertise and technology to streamline the application and underwriting process. They seem to have done this based on customer comments. It appears they have reduced approval times and the time it takes for the funds to be in investors pockets.
However, they are growing fast and are bound to hit some bumps in the road. If they keep hanging tough through the growing pains though, they definitely have the right stuff to be a contender in the real estate lending industry long term.
As always, if you are looking for a lender, do your own research. There is no replacement for due diligence. We work to give a thorough review, but it is always wise to do some digging yourself as well. Our favorite source is the BBB, but don’t stop there. Check out Facebook and Google reviews too. A general internet search can turn up a lot also.
In the end, we think you will find that LendingOne is one of the top new kids on the block when it comes to real estate investment lending. They have seen success quickly and work to live out their mission well. Based on our research, they are definitely recommended.