You have received your first commercial deal! If you are like most of the brokers I’ve counseled lately your story is probably similar to the one below:
What does the average “money broker” ( I prefer to use the term capital consultant) do? First, the want to know the loan amount and then they quickly tack on 1-5 points (they assure me they are never greedy) and then they take an executive summary and shoot it around the internet asking lenders if they can close this loan in 14-21 days!
WRONG! WRONG! WRONG!
These brokers are not taking the correct actions. They are simply planning to fail. Why? They are ignoring the proven strategies used by seasoned commercial brokers.
Want to know the “Secret”?
Before you submit any loan proposal to any lender, you must find out:
The number of deals that lender has closed in the past, and how many they intend to close in the current year.
This is critical to your success! And how do you find out? ASK! Ask the lender by phone or email if they are looking for this type of loan and at the amount your borrower requires. If it is a medical office building ask them how many of these have they closed? And how many do they intend to close this year?
You want to hear: “Oh, we did many of these loans last year and we intend to do many this year!” Don’t send your prime office building to a lender that’s seeking to fund retail centers!
Find lenders and develop a personal relationship with them. Find out what their sweet spot is. In summary, Never submit a loan deal to any lender unless you are able to verify that the lender has closed many of the specific types of deals that your are seeking funding for and that they are currently actively lending.
Seasoned commercial brokers have honed their lender relationships over the years. You can begin this week by contacting at least one lender and interviewing them. At the end of one year you could easily have 52 lenders that you’ve developed a file on and what their lending parameters and preferred property types are.
One year from now you too can be a seasoned “Power Broker”.
To your Success!