In the 8th episode of the Private Lending Insights Podcast, I interviewed Jeffrey Tesch, the CEO of RCN Capital, to get his thoughts about the private lending market. We covered a variety of topics: 2024 loan volume, interest rates, insurance challenges, multifamily financing, 2025 predictions, RCN’s wholesale program and more. Watch the video, listen to the audio, or read the summary below.
Summary of Interview with Jeff Tesch (RCN Capital)
Host: Rocky Butani, CEO of Lender Link
Guest: Jeff Tesch, CEO of RCN Capital
In this episode of Private Lending Insights, Rocky Butani interviews Jeff Tesch, CEO of RCN Capital, one of the leading private lending companies in the U.S. They discuss the state of private lending in 2024, predictions for 2025, interest rates, securitizations, capital markets, wholesale lending, and challenges in the industry.
Key Topics Discussed
Private Lending in 2024: Market Growth & Challenges
- RCN Capital experienced 20% growth, setting a company record for loan volume.
- Closed 8,000+ transactions, the highest in company history.
- High demand for DSCR loans (Debt-Service Coverage Ratio loans) as investors refinanced expiring five-year debt.
- Unexpected interest rate fluctuations impacted expectations but did not stop growth.
- Q3 slowdown followed by a strong Q4 recovery, driven by a temporary rate dip.
The Future of Private Lending in 2025
- Interest rates need to decline into the 6% range to unlock housing inventory for fix-and-flip investors.
- Many homeowners are holding onto properties due to low existing mortgage rates, restricting deal flow.
- Rising insurance costs and property taxes are impacting investor profitability, particularly for DSCR rental portfolios.
- RCN Capital anticipates a 20% increase in loan volume for 2025.
The Role of Securitization in Private Lending
- Rated securitizations have expanded institutional capital access, reducing lender cost of funds.
- Institutional investors and family offices can now participate in securitized private lending bonds.
- The single-family rental (SFR) asset class remains strong, maintaining investor confidence.
Short-Term Loans & Interest Rate Trends
- Short-term bridge loan rates remain high, primarily due to Federal Reserve policies and Treasury market conditions.
- Warehouse lending and securitization impact bridge loan pricing, with no short-term rate relief expected.
- Investors seeking short-term financing must consider higher prepayment penalties or increased upfront points.
Rising Insurance Costs & Market Impact
- Florida, Texas, and California have seen skyrocketing insurance premiums, making it difficult for investors to obtain coverage.
- Texas experienced severe hailstorm-related losses, driving insurance rates higher across the state.
- Increased property taxes and insurance costs are reducing rental property profitability.
- Investors are advised to assess insurance costs upfront before acquiring new properties.
Multi-Family Lending & Market Adjustments
- 2024 was a challenging year for multi-family investments due to high debt costs.
- Unlike single-family rentals, multi-family rents stagnated, making refinancing difficult.
- Some A-minus and B-plus class multi-family assets are beginning to recover.
- Market corrections are expected, with price adjustments needed for profitability.
RCN Capital’s Wholesale Lending Expansion
- 85%+ of RCN Capital’s loan volume comes from wholesale lending.
- Investment in education and technology has strengthened broker and correspondent lender relationships.
- Bridge Loan Network, RCN’s proprietary loan origination platform, has been fully integrated to streamline lending processes.
The Future of Private Lending & RCN Capital
- Demand for business-purpose loans remains strong, particularly in rental and small-balance commercial lending.
- Expansion of wholesale lending programs and broker training to enhance market penetration.
- Increased use of securitization and capital markets to improve lending efficiencies.
- Continued investment in technology and operational support for wholesale partners.
Visit RCN Capital’s profile and contact them directly. They pay us a monthly advertising fee to be listed on our platform.
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