Constructive Capital President Says Mortgage Brokers Can Benefit From Diversification
By KIMBERLEY HAAS
The president of a wholesale capital provider for mortgage brokers and real estate investors says industry professionals should consider diversifying their businesses as it becomes clear that 2025 could be another tough year.
Ben Fertig at Constructive Capital in Oakbrook Terrace, Illinois, sees an opportunity for brokers to expand into DSCR rental loans and residential transition loans.
Currently, the preponderance of Constructive Capital’s broker base is made up of industry professionals who generally service residential real estate investors exclusively. Fertig said he is hoping to develop a relationship with brokers who have historically focused on consumer products, conventional loans, and government loans.
“The asset classes that we’re lending in are much less rate sensitive than the traditional asset classes that they work within. Rates matter always, but if you look at our industry in general, while 2023 and 2024 were flat, in 2022 to 2023 there was quite a bit of growth broadly,” Fertig said.
“Conventional brokers, in my opinion, need to diversify their revenue stream. That’s the best thing about these products. They’re not so rate-dependent. In a time like we are in now, where there’s no opportunity on conventional refinances, these products allow for the diversification of their revenue stream.”
The other benefit of diversification is attracting borrowers who become regular, long-term clients because investors need financing on a more regular basis than typical consumers, Fertig said.
In the second half of 2024, Constructive Capital’s volume increased 77% compared to the first half of the year and grew 68% year-over-year from the second half of 2023.
Over the past four months, the company also gained 35% in market share, solidifying its position as one of the top five residential business-purpose lenders and the fastest-growing among its peers, according to a press release.
Fertig attributes their success to the relationships they build with brokers.
“We believe in the power of the relationship. We know that we’re going to have a broker that’s going to send us recurring business. We know that broker is going to have a borrower that’s going to send them recurring business so everything we do is amplified to that end, even more so than conventional wholesale origination,” Fertig said.
The company has just under 1,300 approved brokers and about 500 of them are active, meaning they have sent the company a loan in the last six months.
Constructive Capital, which operates in 47 states, was named private lender of the year for 2024 at The National Private Lenders Conference.