As a commercial mortgage broker, there is a lot that goes into being successful, and I’m not trying to oversimplify this issue; but why are there commercial mortgage brokers that make seven figures and many who can’t break $100,000 per year? I’m not saying that there aren’t other factors involved.
I feel that the quality of the transactions that the commercial mortgage broker Honolulu chooses to work on is the most crucial component of this. In contrast to their “sales” mentality, which is more reactive and works on any or all loans that come across their desk, this may seem a bit counterintuitive to many of them. Because of the lack of demand, they may be able to focus on weaker loan applications. The power is in the hands of successful commercial mortgage brokers.
The best commercial mortgage brokers are exceedingly picky about the customers they work with and the offers that they accept. To work on something if they don’t like it is a no-no. Unless they believe the borrower would be a repeat customer, they won’t be interested in dealing with them. They move away or try to persuade the borrower to take them seriously if they think they’re being shopped. It doesn’t matter what the cause is, they will turn down the loan request in favor of more worthwhile endeavors.
As a part of this, you need to be an expert at screening loans. Before putting a lot of effort into the business, the commercial mortgage broker is attempting to see whether they can clinch the contract and how competitive they will be with their current connections in terms of pricing. Consider it an exercise in foretelling the future. Of course, a commercial mortgage broker will not work on a deal if they do not believe they can complete it or will not be as competitive. Keeping them busy is, once again, the primary concern.
If so, can it be financed? They don’t have to spend weeks scouring banks for the best deal. Within 30 minutes, they know whether the offer is right for them or if they should walk away. For underwriting purposes, they know how to evaluate borrowers’ tax returns and financial statements, which is what they’ll be doing. “What is the company’s net operating income?” and other similar questions. The statutory Debt Coverage Ratios must be met. Please tell me about current business trends. Should have a satisfactory response.
Increasingly, we’re seeing younger commercial mortgage brokers submitting loan requests that have no chance of closing since the cash flow is in danger of going negative. They wouldn’t even have bothered with the file in the first place if the broker understood how to evaluate tax returns! Commercial mortgage pre-screening training manuals are accessible on our website.
Do I have the ability to get additional loans from this individual? The ideal customer is someone who buys or refinances many loans each year, and who has a degree of loyalty to their lender. Will they agree to pay me a commission as my exclusive broker? You’re presenting offers and negotiating transactions instead of prospecting. Instead of sending out mailings to commercial real estate brokers, you’re examining term sheets and arranging closings.
Being a great commercial mortgage broker involves several aspects, but one of the most important considerations is how a broker allocates his time and which projects he chooses to work on or steer clear of.