Dominion Financial Services’ recent expansion into the Wholesale space came about much in the same way its parent company has progressed since it launched over 20 years ago—scaling solutions aided by market opportunity.

“The business has not just survived but thrived over the last two decades. The ‘why now?’ as it relates to a Wholesale division is really a calculus of where the velocity of transaction activity is,” said Dustin Wells, the recently named President of the division.

The company is now poised to combine a proven track record of success in direct-to-consumer lending with a new venture into Wholesale lending.

Problem-Solving Moves

Dominion Financial Services is the lending arm of The Dominion Group, which also includes a rental property portfolio and property management company. The Dominion Group is one of the largest owners of rental real estate in Baltimore, Maryland, where the company is headquartered.

Founder Fred Lewis started the company in 2002 and was joined by his business partner Jack BeVier, in 2007. The nexus of the original company began with financing investment real estate and then grew into owning rental real estate. The financing came in the two parts of the transaction. First, in the fix-and- flip or transitional rehabilitation of the property, and second in the long-term financing of the property acquisition itself. Both Fred and Jack found it challenging to find lenders offering the type of residential transition loans, or long-term cash flowing DSCR loans they needed.

“They were confident there had to be a better way, so they started to facilitate fix-and-flip and DSCR transactions because they saw the market need and opportunity,” said Wells. “They figured that if Dominion needed that product, there were others out there who were equally in need of the product. So, they began to provide both short-term RTL and long-term DSCR financing to those real estate investors that needed those types of loans.”

“There was a market need for a lender that understood the Debt Service Coverage Ratio (DSCR), which involves cash flow, property analysis, and how to leverage that for lending and financial decisions.”

Following the Money

The consumer direct business model has been successful for Dominion Financial Services, which has grown to over one hundred employees and has provided over $3 billion in financing solutions including ground-up construction, multi-family bridge, fix-and-flip, and 30-year rental loans to real estate investors in all 50 states.

Wells said the company’s decision to now include a Wholesale division was a matter of market shift coupled with opportunity in aligning on the next avenue for growth.

“There are more deals being facilitated with mortgage brokers today than there have been since 2009,” he said. “In fact, over a third of all mortgage transactions are facilitated by a mortgage broker today. This strategic move was to better align our real estate solutions with a new customer base, with that customer base being the mortgage broker.

Wells said now is the right time for Dominion Financial to expand as the demand to capitalize on investment real estate is high, and analysts expect the trend to continue.

“We see the growth potential and broader customer reach as we progress forward, and we want to be in the Wholesale space helping serve the needs of a diverse client base,” he continued.

Advantages of Wholesale Models

One of the biggest benefits of working with mortgage brokers is having access to local experts who are aligned with the area’s investor market, including the realtors and builders, and the state of the local economy in their communities. Being entrenched in the community strengthens their ability to keep their fingers on the pulse of the rental markets. Wells said having those connections is imperative for Dominion Financial, who knows the Baltimore area well, but is looking for boots on the ground in other areas for further expansion.

Dominion Financial Wholesale is actively hiring for Account Executives and Senior Account Executive across the country. If you are interested in joining their growing team, contact Dustin Wells at dustinw@thedominiongroup.com.

Looking Ahead

Wells, who has worked in the real estate finance industry since 1998, said it has been an exciting time for Dominion Financial as the company enters a new era of growth. As the company embarks on their new venture in Wholesale lending, Wells has been working to complete the first phase of implementation, which involves laying the foundational groundwork, including building out a technology stack to the broker base and establishing Dominion Financial’s Wholesale guidelines.

Already able to facilitate DSCR in all 50 states, the company is currently licensed in 19 states to serve a broader consumer Non-QM base and plans to roll out those solutions to brokers by the end of the year.

“We are excited to grow our sales team, our operational structure, and our workflow process,” he said. “We look forward to dialoguing with and growing relationships with brokers across the country to help them serve more customers with products that better serve those customer’s needs.”