In the 20th Episode of the Private Lending Insights Podcast, I interviewed Paul Jackson, President & CEO of Residential Capital Partners, one of the few private lenders offering 100% financing for residential & multifamily rehab projects nationwide. Paul shares his insights on the real estate market, ground-up construction trends, and how ResCap has maintained steady lending volumes for 16+ years. Learn all about their loan program, borrower requirements, interest rates, fees, and much more.
Interview Summary
Market Trends and Construction Activity
Paul explains that while the last three years have been relatively flat compared to pre-2020 growth, lending volumes remain strong. With transaction activity slowed by higher interest rates, many investors are pivoting to ground-up construction on lots they already own. ResCap has been providing construction loans in Texas for six years and is now expanding the program to other states.
Lending Volume and Growth Goals
ResCap has maintained a steady $200 million per year in loan originations over the past three years despite market challenges. Paul notes that the company’s goal is to grow to $250–300 million annually in the coming years, supported by new capital relationships and improved cost of funds.
States and Markets They Lend In
ResCap is active nationwide, including judicial foreclosure states, though they may slightly adjust their advance rates in those states. Texas accounts for about 20% of their loan volume, but they also lend heavily in Florida, New Jersey, Illinois, and other business-friendly states. Paul highlights the importance of long-term borrower relationships that allow ResCap to stay active even in challenging markets.
ResCap’s 100% Financing Program
A cornerstone of ResCap’s success is its high-leverage loan program. They lend 100% of purchase and 100% of rehab costs up to 75% of ARV (After Repair Value). This program was born out of ResCap’s early partnership with HomeVestors, where they acted as a captive finance arm before opening their product to the broader market in 2016.
Borrowers typically bring minimal out-of-pocket cash to closing, paying only points, appraisal fees, and standard title costs. ResCap advances repair funds through a streamlined draw process, using tools like TruePic to verify completed work quickly. Paul emphasizes that they underwrite every deal carefully, often performing a synthetic profit analysis to ensure borrowers are taking on profitable projects.
Borrower Requirements and Underwriting
- Credit score: Minimum 620 (average portfolio score is ~700)
- Liquidity: Minimum $75,000 verified, typically in bank or brokerage accounts
- Experience: At least two completed flips in the past 12–24 months (exceptions for those with strong construction or real estate background)
Pricing and Terms
Current rates range from 9.5% to 12%, with 2–3 points charged upfront. Terms are typically 9–12 months, and monthly interest payments are required during the loan term.
DSCR Loans and Long-Term Strategy
Beyond fix-and-flip loans, ResCap also offers DSCR loans for rental properties, enabling investors to refinance and hold properties long-term. Paul notes that one of their favorite deals is when a borrower improves a property with ResCap’s financing and then refinances into a DSCR loan — lowering their risk profile while building wealth.
Company History and Capital Partnerships
Paul shares the company’s origin story, starting during the 2008 financial crisis as a joint venture with HomeVestors to finance their franchise network. In 2024, ResCap formed a strategic partnership with D2 Asset Management to strengthen its capital base and position the company for growth. Despite this, ResCap remains a balance sheet lender and does not sell its loans, which gives them control and flexibility during market disruptions.
Texas Market Insights
Paul closes by sharing insights on Texas, where most of their lending still takes place. He highlights growth in Dallas–Fort Worth, Houston, and San Antonio, and notes that Austin is experiencing a mild correction but remains a long-term growth market. ResCap is also active in secondary markets such as Lubbock, Midland, and the Rio Grande Valley, provided the deal fundamentals make sense.
Key Takeaways for Real Estate Investors
- High Leverage: 100% financing up to 75% ARV makes ResCap one of the most aggressive national lenders.
- Experienced Borrowers Preferred: Track record, liquidity, and credit still matter.
- Focus on Relationships: Long-standing partnerships with repeat borrowers keep them active even in challenging markets.
- Expansion Plans: ResCap is poised for growth in construction lending and larger loan sizes across more states.
Visit Residential Capital Partners’ profile to contact them directly. They pay us a monthly fee to be listed on our platform.
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