Podcast: Catching Up With Constructive Capital President Ben Fertig

The president of a wholesale provider of business purpose capital for mortgage brokers and their real estate investor clients says technology and talent will drive success for his company.

Ben Fertig at Constructive Capital in Oakbrook Terrace, Illinois, said in a recent interview with The Mortgage Note that the company grew 30% in each of the last two years on average.

Constructive Capital provides capital to a third-party origination network, mainly made up of mortgage brokers who work with real estate investors that use residential transition loans - also known as fix and flip loans - and DSCR related products.

When it comes to technology, modern risk management tools using artificial intelligence help to prevent fraud.

“If anything is off in terms of fonts or anything along those lines, it'll detect it. If any of the calculations are off, it'll detect it. It actually will track back the cookies on anything that's been changed relative to a PDF, or anything along those lines. So, I think that's definitely been a big development,” Fertig said.

Programs that pull in all the pictures historically from a property relative to its MLS listings are particularly helpful in their space, Fertig said. They also use a tool that aggregates data to create predictive analytics on whether or not a project is likely to get completed on schedule.

Another area where technology plays a key role is in project inspections as the market moves towards some virtual inspections.

“There's actually tools that can tell, just from a visual, if a project has got, for instance, click wood flooring versus real hardwood flooring. It’s pretty good stuff,” Fertig said.

Fertig has been talking about how home mortgage professionals should diversify their business for some time, saying there are opportunities for brokers to expand into residential transition loans and DSCR related products.

He said the reasons are multifaceted, but the first advantage of diversification is a different set of borrowers who are less rate sensitive than homebuyers.

“Secondly, the acquisition of the borrower is just more efficient because that borrower should be a recurring borrower. Most real estate investors do more than one loan or project,” Fertig said.

Most of Constructive Capital’s broker base is made up of industry professionals who generally service residential real estate investors exclusively. Fertig is hoping to develop a relationship with brokers who have historically focused on consumer products, conventional loans, and government loans.

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.

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