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icenvegas
Schumpeter Reincarnate


Joined: 22 Nov 2007
Posts: 3896
Location: Las Vegas

Re: Commercial Lending
PostPosted: Fri Dec 14, 2007 5:19 pm Reply with quoteBack to top

one thing that is simmilar to residential is "NETWORKING", your competition is different. Contact other mortgage brokers/banks, pay the referral fee (usually between 25 and 50bps.)
Get your name out there. Find a niche and specialize, know what you want to do.. in commercial, the jack of all trades thing, really doesnt work. Find other commercial loan people, and find out what they specialize in, and offer to switch off
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miweiser
Wrecking crew


Joined: 09 Nov 2007
Posts: 1517
Location: Central FL

Re: Commercial Lending
PostPosted: Fri Dec 14, 2007 5:43 pm Reply with quoteBack to top

SICK OF NETWORKING - all I get is MLM BS, mona vie, noni juice, Team National, you name it!

I'm getting into FOREX trading & HYIP dammit!

This area is still too good ol boyish to effectively network, cause Jo Bob's sister that gave him the BJ, well her cousin does that too!

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icenvegas
Schumpeter Reincarnate


Joined: 22 Nov 2007
Posts: 3896
Location: Las Vegas

Re: Commercial Lending
PostPosted: Fri Dec 14, 2007 5:46 pm Reply with quoteBack to top

you gotta think Networking, like Vegas networking.. get that liver strong, head to where the builders and developers go, buy a couple drinks at lunch time, and get to know them personally, not just professionally. Bartenders are going to become your best friends. MLM... screw that., I'm talking good old fashioned networking.

Get referrence letters from past residential clients, who are professionals.. that goes a long way.

I usually charge a lot for this stuff LOL
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miweiser
Wrecking crew


Joined: 09 Nov 2007
Posts: 1517
Location: Central FL

Re: Commercial Lending
PostPosted: Fri Dec 14, 2007 5:52 pm Reply with quoteBack to top

You are right, which I am very capable of doing - but the wife doesn't socialize and the bar scene isn't really my thing, so I just stay away!

I do the chamber of commerce stuff, but it's not enough!

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Bulldog
Cherry Bomb


Joined: 05 Oct 2007
Posts: 188
Location: U.S.

Re: Absolutely
PostPosted: Fri Dec 14, 2007 6:24 pm Reply with quoteBack to top

jsrvmorgan wrote:
I have been an AE in the past. I am working as a Broker now, so absolutely that is what I am talking about.


Sorry I missed your reply until now.

I've been approached often by commercial AEs, on the phone and in person. I've been (thank God) busy with residential still, so just keep the commercial on the back burner. I agree with most of the other posters... it's a whole different crowd and network. I've had a few residential clients bite on the commercial bait, and a few "walk-ins" on it, based on the strenght of my rep in residential.

Perhaps since I've never taken the time to "get good" at the technical side of it, I see one of two things happen each time: A. The lead will blindly accept anything I say, any rate, any explanation, and then crash and burn about halfway through because they realize they're getting in way over their head, or B. The lead will say thanks but no thanks because of rate and, IMO I don't talk like the commercial guy/gal at the bank. It seems to be clear to them that I am "home-schooled" in commercial and the rates aren't great.

I do do (heh heh) some, but don't chase it. At first I thought I could do both, but experience has shown me that personally, there's no way I can do commercial and residential well, simultaneously, unless I'm doing a combined total of less than 10 loans a month. I could, theoretically, make $20K a deal on commercial, IF I had that network and didn't work anything else. I could, realistically, neglect my residential/investment business and make $20K in my first year doing commercial.

It's easy to make commercial contacts, it's not as easy to convince them that you're "the one"... commercial investors tend to have VERY different decision-making processes than residential buyers, in every way.

The commercial AEs that come into my office, as nice and professional as they are, lose me forever the second they start talking about how much they're closing with my local broker competitors. That's total bilge, because I know the competitors and I know who's using who for at least half the commercial transactions in my area. The vast majority of them go to a bank, always have, always will. As a residential/ investment broker I can and do compete with the banks for prime stuff. As a commercial broker you are instantly and for always subprime, don't let any AEs tell you different. Even if there's .1% more flex in your DSCR, experienced local business people love all the perks of their relationship at the bank.

If I wanted to start from scratch focused on commercial, I'd make it clear first of all that I was doing JUST THAT. Do SBA and commercial and make it a boutique experience, and you might steal a few good ones from the banks while you deal mostly with their rejects.

Personally, I feel weird (I'm not their dad, I know, I know...) about financing (SBA) business plans the bank rejects. If you gotta get an out-of-town investor to lend a small amount to you there's probably something the local bank knows about the local market.

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icenvegas
Schumpeter Reincarnate


Joined: 22 Nov 2007
Posts: 3896
Location: Las Vegas

Re: Commercial Lending
PostPosted: Fri Dec 14, 2007 6:29 pm Reply with quoteBack to top

very well said Bulldog.. very well said. I dont do much in commercial these days, simply because as I've said before, residential is my bread and butter.

I taught my LO's how to do commercial financing, and told them PICK ONE, commercial, or residential. The jack of all trades mentality doesnt work in the world of commercial.
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miweiser
Wrecking crew


Joined: 09 Nov 2007
Posts: 1517
Location: Central FL

Re: Commercial Lending
PostPosted: Fri Dec 14, 2007 9:04 pm Reply with quoteBack to top

Well BullDog, I think InterBay has a good rebuttal for the bank customer, which is that they have less red tape, and flexibility along with longer terms allowing for budgeting and saving fees and closing costs every 5 years when the bank's note is due...

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inf9antz
Dud?


Joined: 13 Dec 2007
Posts: 17
Location: Long Island,NY

Re: Commercial Lending
PostPosted: Sat Dec 15, 2007 2:06 am Reply with quoteBack to top

So nobody has a solid "system " in place or that they know of?

What are some of the hot buttons of a commercial client. Besides purchase/investment How about a sales letter or postcard sent to small commercial like silver hill and interbay do? what would a pitch be in direct marketing? what entices these people? i'm thinking of a small business owner or an investment person who buys multi families? Not Savvy corporate types.

On the savvy corporate clients what are they looking for? Iget every facet of residential and the hot buttons associated with many different clients but im just not getting the whole commercial warm and fuzzy feeling.
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