“From our side of things, we’re looking at two sides of our products,” he said. “One is debt service coverage ratio (DSCR) loans to investors who are buying rental housing and providing homes for people to live in from a rental perspective, and then the other side of our products is providing financing to investors who are taking distressed housing – housing that is often uninhabitable – providing those dollars to investors who are converting those homes into homes that families can once again live in.”
In pandemic-fueled challenges that have had corrosive economic effects for many, RCN Capital is banking on an urgent need for housing. Superlatives, too, are in ever short supply to describe the morass – the latest buzz centered around a US housing stock largely dating to the Carter administration. It’s said that 65% of existing homes were built in that period, circa 1977-81.
Hence the entrée for RCN Capital: “While the foreclosure and short sale market is just about non-existent, there’s still a tremendous amount of housing that is distressed in nature across the United States that needs renovating and can once again be brought back to standards so families can live in that housing,” Tesch reiterated. “That housing is in demand.”
He added: “Which is why RCN Capital is so bullish on what we see for the single-family housing market – not just for 2022, we expect ’22, ’23 and most likely into 2024.”
Those suggesting the firm is capitalizing on pandemic should be disabused of the notion, Tesch intimated. The lack of housing supply predates the scourge, though the pandemic brought underlying issues into greater focus, he said.