If you are a real estate investor, then you need to know about Lending One. It is a direct real estate investing lender that has been around since 2014. They are newer, but they are quickly establishing themselves in the industry. Here is what you need to know to get a jump on deciding whether they are right for you, or not.
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.
Remember, details such as interest rates, terms, and products offered can change frequently. Check with the lender’s direction for the most current information.
Is Lending One a Good Option for You?
Bill Green (CEO) and Matthew Neisser (COO) joined forces in 2014 to open a private real estate lending company. The mission? To use technology to streamline and speed up the process of borrowing for real estate investment.
With Green’s skill and expertise in creating world-class organizations and Neisser’s background in technology and finance, it did just that. As a result, we have the Lending One of today. It provides a faster and easier way to apply for and receive approval for loans. Furthermore, it allows borrowers to grow their real estate portfolios.
They make loans to citizens of the United States, Canadian citizens, and permanent resident aliens.
What Types of Loans Do They Offer?
There are a range of options when it comes to loans with Lending One. They include:
Fix-and-Flip
For example, if your real estate game is to purchase homes to rehab and then sell for profit, then fix-and-flip loans are for you. Amazingly, rate quotes are available online in as little as 2 minutes.
They will loan up to 80% of the cost of the project, or LTC (Loan to Cost.) The minimum loan amount is $75,000. They do not list a maximum. Also, there is no interest charged on unused funds, and there is no penalty for early repayments. The minimum FICO required for a Fix-and-Flip loan is not noted on the website. They state only:
“We are much more flexible in the FICO score we accept and are happy to work with each client’s individual situations.”
Additionally, you will need to have the following documents on hand.
- Sales contract
- One month’s bank statement
- Construction budget
- List of properties currently owned
- 2 years tax returns
- LLC operating agreement, or Articles of Incorporation
Remember to send copies. Never send originals.
Rental Loans
Now, if your business is more “fix it up and rent it out” based, you will be more interested in the rental loans. With these, there are two options. The first, RentalOne, and then the Apartment Bridge loans.
RentalOne
This option is available on either a 5 or 7-year ARM (adjustable rate mortgage.) Or, if you would rather, as a 30-year fixed loan. Loan amounts go up to $2 million.
The FICO requirement for the RentalOne loan is flexible, the same as with the Fix and Flip loans. However, these requirements change without warning. The truth is, you really do not know until you try. You do not have to turn over income verification, not even a W-2. Instead, they consider the cash flow of the property itself in the decision-making process. It appears, however, that there is a prepayment penalty on this one.
Multifamily Bridge Loans
These are available for buildings with 5 to 200 rental units. There is no interest on funds that are not drawn, and the terms range from 12 to 36 months. The loan amount is up to $15 million.
There is a minimum FICO requirement of 650, but closing is super-fast, sometimes in as little as 20 business days.
New Construction Loans
Another product they offer is new construction loans. Amounts range up to $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.
Rehab to Rent
If you want to rehab a home to rent for profit, you can do that as well. Here is how it works. First, you apply for a Fix-and-Flip loan. 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.
Lending One Pre-Approval
There is an easy, fast pre-approval process, and it’s free. You can have your terms and rates in writing before you ever submit an offer. Honestly, the proof of funds provided with pre-approval makes submitting an offer easier than ever. Pre-approvals are available for amounts up to $5,000,000.
Lending One Partner Program
The company also offers a partner program. It’s a community of investors, realtors, real estate attorneys, and third parties. Potential partners have the opportunity through the program to earn compensation in exchange for client referrals. Interest parties are invited and encouraged to participate.
The following options exist:
- The Referral Partner Program is for real estate investors, real estate attorneys, and other third partners that want to refer business to Lending One.
- The Broker Partner Program is for mortgage brokers or loan origination consultants that wish to refer business.
- Finally, the corporate partner program is designed for businesses that provide goods or services to those that invest in real estate not occupied by the owner.
Partner consultants contact potential partners within 24 hours of application to the program.
Making Payments on Your Lending One Loan
They have a contract with FCI Lender Services. This company services and accepts payment for loans. Borrowers get a welcome package with directions directly from FCI about 2 to 3 weeks after the loan closes. Payments are made via ACH and are due on the first of the month.
Lending One and the Better Business Bureau
It never hurts to seek out what type of online reputation a company has. Online reviews are huge these days. For this company, we found the following.
The Better Business Bureau
As it turns out, not only do they have an A+ rating with the Better Business Bureau but they are actually accredited since February 2017.
In that whole time, there has only been one complaint. The company addressed it and it was solved. There are only 3 reviews, and unfortunately the most recent one is negative. However, it is from someone who was in the middle of the loan process and the process was put on hold due to the COVID-19 pandemic. This is an extreme circumstance, of course.
Benefits of Using Lending One
They use proprietary technology that allows them to streamline the underwriting process. As a result, application processing is much faster. Along with pre-approval and good reviews from previous customers, they sound like superstars. Yet, nothing’s perfect, right?
The Downside of Using Lending One
The main drawback is, they are a young company. Of course, that will not always be the case. One can only hope they will continue the positive path they are on and continue to work to get rid of any bugs.
Another negative is that you would not be able to get enough money for larger projects due to the maximum loan amounts offered. With a max of $2 million for rehab and $5 million for new construction, commercial jobs are pretty much out the window. Lending One would not be an option for those looking to do commercial flips or flips on more expensive homes in higher-income areas.
Is Lending One for You?
In the end, Lending One isn’t a bad option. It does have higher interest rates and lower maximum loan amounts than some. However, they are also more lenient with their credit score requirements. That means if you are not able to get the funding you need somewhere else, they could be just what you need. They have a good reputation and offer a variety of loan options.
As with any decision on a lender, do your own research. Things change frequently, and the COVID-19 pandemic changed a lot of things. You’ll want to double-check details such as loan amounts and interest rates. It seems though, despite being a young company, Lending One is doing pretty well, not only for themselves but for their customers as well.
