CoreVest Breakdown
Origination volume down 50%+ in 2023 compared to early 2022, geographic distribution, largest borrowers, and more.
Executive Summary
CoreVest is a leading specialty finance company that provides loans to residential real estate investors. It was founded in 2014 and is headquartered in Irvine, California. In October 2019, CoreVest was acquired by Redwood Trust, a real estate investment trust that specializes in mortgage banking and investing in mortgage-related assets.
CoreVest offers a variety of loan products for investors who are looking to purchase, renovate, or refinance single-family rental properties, multifamily properties, and portfolios of rental properties.
Origination volume fell by more than 50% in 2023 to around $400m per quarter, down from over $900m per quarter in Q1 2022 and Q2 2022; along with the decrease in volume, the breakdown of bridge vs term lending also shifted with term making up a smaller proportion of volume.
At the end of the article, a CSV showing CoreVest’s most recent portfolio originations are available.
Introduction
CoreVest is a leading specialty finance company that provides loans to residential real estate investors. It was founded in 2014 and is headquartered in Irvine, California. CoreVest offers a variety of loan products for investors who are looking to purchase, renovate, or refinance single-family rental properties, multifamily properties, and portfolios of rental properties.
The company was acquired by Redwood Trust in October 2019 and continues to operate as a distinct business line, leveraging Redwood's resources to expand its offerings and reach more investors in the single-family rental and multifamily markets. Product offerings include long-term rental loans, bridge loans, multifamily loans, build-to-rent loans, and single-asset loans. CoreVest lends in most states across the country and competes with other nationwide lenders like Kiavi, LendingOne, and Lima One. Compared to other lenders focused on serving residential real estate investors, CoreVest has historically had a heavy focus on SFR portfolio loans.
To read more about the private lending market, check out our recent piece, 2023 State of the Private Lending Market.
Data Overview
At SFR Analytics, we leverage nationwide deed and assessor data to track the single family rental market. To generate this analysis, we’ve:
Identified and reconciled the entities that fix-and-flip investors purchase properties under in order to have a complete picture of borrower activity and loyalty
Identified and reconciled the entities that CoreVest originates loans under
Analyzed Corevest’s public filings
Analysis & Results
Origination Volume & Mix
Origination Volume
Origination volume is down significantly from early 2022, falling from over $900m per quarter in Q1 2022 and Q2 2022 to around $400m per quarter in 2023. This decrease is in line with the drop experienced by other lenders (although a bit more exaggerated), as discussed in our recent piece, 2023 State of the Private Lending Market.
Origination Mix
Along with the fall in volume, origination mix has shifted, with term making up a smaller percentage of volume.
Most Active Geographies
By loan origination volume, CoreVest has been most active in Chicago and Dallas, followed by Houston and Atlanta.
Geographic Distribution
CoreVest has a strong presence across the country serving investors in almost all major metros. CoreVest has one of the largest geographic footprint across all private lenders.
Gross Margins on CoreVest Loans
CoreVest bridge loans have generally generated strong positive gross margins (sale price minus purchase price) with a median gross margin of $200k, but larger projects will have meaningful labor and material costs that impact net profit.
Deal Spotlight
While CoreVest’s volume has declined over the past couple of years years and competition has increased for portfolio loans, the company remains a leader in SFR portfolio lending.
Two weeks ago, CoreVest closed on a $10,711,500 financing for Omega Realty Group.
This was across a group of properties they acquired from CS Equities in Birmingham and Montgomery, Alabama in January of 2024. The portfolio consists of mostly relatively new properties built after 1990 and across the square footage spectrum (800-2,400 square foot). Analyzing historical rental listing data shows that these properties are being listed for high-single-digit to low-double-digit gross yields.
CoreVest also finances a considerable amount of build-to-rent deals - with Bridge Tower being one of its largest borrowers, taking out at least four separate loans worth between $3M and $30M since 2023.
Bridge Tower is a major BTR developer and is mostly active in Texas with 10+ different communities.
2023 H2 + Portfolio Loan Originations
Below, paid subscribers have access to a spreadsheet of CoreVest’s portfolio originations since July 2023.
Note: the remainder of this article is available to paid subscribers, sign up below for access. Paid subscribers get full access to weekly data-rich articles about the SFR market and select additional articles only available to paid subscribers.