Commercial Capital Training Group February 5, 2014

Jeffrey Tesch

Managing Director

Dave Olson VP of Finance and

Business Development

Brian LaBua Chief Loan Officer

Presenters:

Jeffrey Tesch

Managing Director

Program Agenda

I. Introduction/Company Overview

II. Company Products

III. Target Market

IV. RCN Capital’s Niche in the Industry

V. Loan Criteria

VI. Loan Qualifying Factors

VII. Transactions RCN Capital Will/Will Not Fund

VIII. Application Process

IX. Deals that RCN Capital Has Funded

X. Questions & Answers

•RCN Capital, LLC is a national private lender. We provide short-term, residential and small balance commercial, non-owner occupied, property-backed loans.

•Founded in 2010, RCN Capital is located in South Windsor, CT, and is affiliated through common ownership with TicketNetwork, a large competitor of StubHub. RCN Capital is audited by KPMG.

•RCN Capital services its own self-funded portfolio in excess of $50M, with $25M in additional available capital.

•RCN Capital has funded 350 nationwide transactions since its inception and has doubled in size every year.

•Approximately 75% of our business is through brokers. Brokers protected.

RCN Capital™ Overview

WeBrokers!

Private Commercial Loans

•Primarily used to fund the purchase of non-owner occupied (NOO) residential and small commercial properties. Highly focused on the underlying asset and the loan to value ratio, rather than the personal credit of the borrower.

•Provide financing for various scenarios to small business owners, real estate investors, developers and contractors with sound exit strategies.

•Can also provide renovation, rehab and construction funds or small business financing.

•Close in as few as 10 days because the underwriting and documentation processes are more streamlined than conventional lenders.

•Commercial Bridge - Acquisition Financing

•Distressed Construction

•Flip and Rehab - Residential, Multi-family, Apartments, etc.

Our flexibility and ability to close quickly provides our borrowers with a clear business advantage.

Private loans are not for everyone, but can be a financial game-changer.

RCN Capital™ provides solutions

We provide short-term, bridge financing.

Private Commercial Loans (cont.)

Dave Olson

Vice President of Finance and Business Development

Identifying Opportunities:RCN Capital’s Target Market

Primary Channels

Small Business Owners

Real Estate Investors

Real Estate Developers

Builders/Contractors

Personal Contacts/Networks

Secondary Channels

Other Lenders

Commercial/Residential Real Estate Attorneys

Brokers

Traditional Bank Lender vs. RCN Capital™When is Funding Available?

Loan ScenarioTraditional Bank

LenderRCN Capital

Purchase of an owner occupied property ü ûPurchase of a non-owner occupied property Maybe ü

Purchase of a foreclosure Maybe üPurchase of a mixed use property Maybe üBorrower has filed for bankruptcy Maybe ü

Borrower has bad credit û üPurchase of a distressed property û ü

Borrower is already financing multiple properties û ü

Loan needs to be closed in two weeks û ü

Collateral Non-owner occupied (NOO) residential, mixed use or commercial real estate

Term 12 months

Interest Rate 12% monthly (no prepayment penalties)

Loan Amount $50k to $2M+

LTV Up to 80% of the “as is” value of the property

Closing As few as 10 business days

Lending Area Nationwide (except CA, NV and AZ)

Brian LaBua

Chief Loan Officer

Broker Referral Program

Referral Fee Split Points 50/50

RCN Capital™ offers simple referral options for brokers.

The amount of compensation earned depends on the broker’s level of involvement and the loan scenario.

Minimal Involvement

Heavy Involvement

Fundamental Pyramid of Loan Approval

Income

Equity

Credit

RCN Capital™ Loan Qualifying Factors

Above all factors, RCN Capital places an emphasis on the borrower’s exit strategy.

Exit Strategy Resume

Experience/Background Cash Flow

Existing Leases Reserves

Saturation Levels Acquisition

Market Approval Type

Common Exit Strategies

•Sell the property and use the funds to pay off the loan.

•Refinance with a conventional mortgage lender, SBA lender, finance company, ABL lender, etc.

•Buy and hold.

Loans RCN Capital™ Will Not Fund

Owner Occupied Properties

Partial Owner Occupancy of a Property

Heavily Contaminated Properties

Projects Without an Exit Strategy

Properties That are Inflated Post Down Payment

Properties That Have Been Equity Stripped Over a Short Period of Time

Application Process

We need the following items to complete the application:

Personal financial statement

Borrower signature authorization for credit and background checks

Form 4506-T

Two years’ tax returns

2 months bank statements

Appraisal authorization form

Purchase contract

Basic Timeline

10 Days 30 Days20 Days

Residential Rehab Small Commercial Construction

Deals RCN Capital™ Has Funded

Commercial Steakhouse

in Greenwich, CT

•The borrower had a commitment for long-term financing through a traditional lender.

•However, he needed immediate funds to pay taxes on the property and to payoff the existing second mortgage.

•RCN Capital financed a bridge loan to fill the gap while the borrower waited for the bank loan to close.

•The broker earned $36k in fees from the deal.

$2.4M Bridge Loan

Three-Unit Residential Property in Mount Vernon, NY

•The borrower was eligible to receive funding from a traditional bank, but the property itself was not because of the condition it was in.

•Private lenders often look into the project that the borrower wants to accomplish and are willing to lend on non-traditional properties.

•The broker earned $2,700 in fees from the deal.

$89k Loan for the Purchase of a Distressed Property

Single Family Colonial Home

in Chatham, MA

•The borrowers were seeking conventional financing but needed to close quickly.

•RCN Capital™ provided funding so the borrower could purchase the property. The borrower could then get a conventional loan in 60-90 days.

•The broker earned $24k in fees from the deal.

$1.2M Bridge Loan

51-Unit Apartment Building in Houston, Texas

•The borrower needed a loan to payoff seller financing that had come due.

•The borrower had high credit scores, steady income and a great deal of assets, and would have easily qualified for conventional financing.

•However, a bank would take 3-6 months to provide him with the financing he needed and he needed funding immediately.

•RCN Capital™ was able to provide him with the funding he needed.

•The broker earned $7k in fees from the deal.

$625k Bridge Loan

One-Story Retail Strip Mall with Seven Units in Centereach, NY

• A repeat borrower needed a bridge loan to fund the purchase of an investment property.

•The borrower was eligible to receive funding from a traditional lender, but needed to close quickly, which a bank could not do.

•Using a strip mall that he owned free and clear as collateral, the borrower was able to utilize dead equity to acquire new assets.

•The broker earned $20k in fees from the deal.

$1M Commercial Bridge Loan

Hotel and Multi-family Portfolio in

North Stonington, CT$1.5M Loan

•The borrower wanted a loan to refinance several mortgages and various small bank loans.

•RCN Capital™ secured 11 properties allowing the borrower to expand his real estate portfolio while reducing his monthly outlay by funding a large blanket mortgage.

•The broker earned $16k in fees from the deal.

Broker Compensation

•Fees are paid to brokers off the HUD and are memorialized in a transaction-specific agreement.

•A check is sent directly to the broker at closing.

•All fees that are earned by the broker are disclosed on the commitment letter up front.

Brian LaBuaChief Loan Officer

 BLaBua@RCNCapital.com

P \ 860.471.1024

RCNCapital.com 

Contact Information

Questions?