Non-Traditional Lenders Fill the Gap Left by Banks in Growing Residential Real Estate Market

“There are between 12 and 15 million single-family rental properties in the country. It’s a very large market, currently underserved by the debt market, and very fragmented.”
— Jeff Ball, CEO Visio Financial Services

Although investor interest in rehabbing properties to flip or rent out continues, financing to build their small businesses remains a niche market. Between stringent credit limitations and lengthy approval processes, banks make it challenging for residential investors to obtain financing, especially as distressed properties become more difficult to find.

Non-traditional lenders, such as Visio Financial have stepped in to fill the void left by banks whose strict credit standards are pushing investors out of the housing market. According to Visio’s recent survey report, 92 percent of full-time investors could build their portfolios if only they had access to cheaper capital.

Visio CEO, Jeff Ball was recently featured in the New York Times to shed light on the changing lending landscape for residential investors, and where alternative financing fits into the bigger picture.

“There are between 12 and 15 million single-family rental properties in the country,” Ball said. “It’s a very large market, currently underserved by the debt market, and very fragmented.”

According to Ball, many investors choose non-traditional lenders over banks because they don’t want to impact their credit, are looking for a fast and simple process or would have difficulty proving their income. Additionally, because investors often purchase distressed homes in need of significant repair, a bank loan is often not an option.

Visio, led by the same team that founded Econohomes in 2006, is in a unique position to underwrite such loans, based on their deep understanding of the housing market and the needs of residential real estate investors, Ball said.

Read the full New York Times article, here.