10 Steps To Being A Successful Commercial Mortgage Broker

If you’re here, know that we are hosting this talk to provide tips for commercial mortgage brokers who want to learn more about doing this business the right way.

We have been in the mortgage business for more than 30 years and want to share with you the essential steps that we have followed for decades to succeed in this industry.

Let’s dive in.

 

Step #1 – Figure Out What Type Of Property You Want To Market For Yourself 

The first step is deciding what type of property you want to market. We just want to say, as a mortgage broker, that there are many different types of properties you can choose from.

So, figuring out what type of property you want to market for yourself is a good start.

The four essential property types are:

(1) Mixed-use, (2) Residential, (3) Foreclosure, and (4) Bankruptcy.

Once you have chosen a property type that you want to focus on, you can then, as one example, devise a marketing strategy around helping people who are having issues with properties with a lot of liens.

This is actually a fairly prominent example, as we see properties that have multiple liens all the time. Our loans clean them up. You can use loans to do the same thing.

But again, this is just one example. Start off with what you want to do out there in the world. That’s the important thing. And try to avoid scattering your focus.

You can either try to be everything to everybody (be like a food court) or you can specialize in one or two things.

For example: 

We have brokers who just specialize in hotels, gas stations, or properties in foreclosure. 

When you do one of those, you can hone in on the market and create a strong, well-thought-out marketing strategy. You really get a lot of good-quality leads staying focused like this.

With practice, you will learn how to get the leads, so don’t worry. This is something that comes with time and experience. You will also learn the investor’s and lender’s guidelines. 

On the other hand, if you try to do everything, what happens is you are just doing everything while scattering your focus, almost like an athlete who is trying to learn 4 or 5 sports at once. You are not likely to be successful because you are just spreading yourself thin.

I find that a lot of brokers, they really do work on everything. But remember, you are not paid to work on a deal. You are paid to close a deal. 

The reality is 90% of the time is wasted when working on deals.

This is why people have to learn to stay focused AND say no quicker and more often.

We cannot emphasize this enough. Hone in on one thing. Focus on getting the referrals you need and practice closing deals for your niche fast.

Closing is what counts.

Step #2 – Do Your Research Because You Will Have To Figure Out Where You Are Going To Put Loans

You have to figure out where you are going to put all the loans that you’ll deal with, which is why I always tell mortgage brokers to “Do your research.” 

Figure out what lender you are going to work with and be crystal clear about your objectives. Avoid muddy waters.

We can tell you from experience that we handle a lot of problem loans that come to us from other places when other lenders do not close. 

A broker will come to us with a whole package, and we will get it done within 10 business days. The title is updated. Then we do our package, and the deal closes.

This is the power of doing your research.

Step #3 – Do Due Diligence and Know The Property 

When the borrower reaches out to you, especially if it’s a refinance, it’s important to know the property.

Ask all the relevant questions.

Do your due diligence because the worst part about deals sometimes is that the broker won’t know the whole story or know all the details about a property.

Make sure you ask your borrower every question there is. The more details you get, the better. You want to be well versed in every aspect of the deal.

Step #4 – Learn The Deal And You Will Earn The Deal

This step is basically the same as step three. We’re repeating ourselves because you really have to know what you’re doing.

Again, we can tell you from experience that a lot of times, brokers will send us a deal, and they won’t really understand it.

They don’t know what they are doing. They haven’t really dug deep into the details.

So, now that we’ve mentioned it twice, how do we solve this problem?

Our Advice: Instead of spending five minutes on a deal and shooting it to 20 lenders, spend half an hour first. 

Specifically, you should find out what the borrower’s motivations are. 

The most important thing is to find out what they are after, their hot buttons, and so on. That way, you can solve their problems and create value for them. 

Don’t rush through details even if everybody else is in a rush. A lot of times, brokers are in such a rush to get the deal done and get it submitted that they don’t do their homework.

You have to understand what’s going on. Otherwise the deal is not going to close. And the only way anyone makes any money is if the loan closes. 

I would say that borrowers will have more respect for you if you spend quality time on the deal. And you’ll set yourself apart from just a regular broker and take the role of a trusted consultant, which is invaluable.

Step #5 – Make Sure You Are Not Sending Your Deals Out To Another Broker

A lot of brokers out there advertise themselves as direct lenders, and they’re really not. This is another thing to watch out for because it wastes everyone’s time.

Don’t do it.

When you work with someone else, do your research and find out if the person you are working with is really a lender.

Look for their online presence. Look at their reviews.

Note: We would also like to add that sometimes brokers can get deals done for you, but you’re better off going to a direct lender.

Step #6 – Hone In On Your Target Market With Digital Marketing

Many years ago, in 1989, when I started, I used to advertise in Philadelphia with the rate and the term of our loans. The ads would go out, and we would make a fortune.

But today, through the power of the internet, if you want to target hotels or properties in foreclosure, you can just target them. You don’t need to advertise in the same way to get good deals.

So, for example, let’s say if you want to target properties today, if you’re a broker, I would personally suggest targeting landlords. There’s an eviction moratorium on a lot of properties. You can’t evict tenants. That’s a fantastic niche.

You can really hyper-target anybody you want through the power of digital media. My advice is to learn that and invest in it. And do target market experiments.

Don’t be afraid to try something. It will work if you’re smart and think things through, and mastering your niche will get easier with time.

Step #7 – Pivot When Necessary

If what you pick is not working, or it’s not suited for you, or if the market changes suddenly, then you have to be adaptable.

Believe it or not, every three to five years, we’ve had to reinvent the company, and we’ve had to pivot to the market. Because if we didn’t, we would be out of business. 

So, you have to learn to pivot, and don’t be afraid to pivot. Some people think pivoting means failure. Don’t look at it that way.

Be constantly looking forward. Don’t look to the past too much. Always look at your next step.

That’s just economics.

The market’s constantly changing. You are changing. Everything’s changing.

Step #8 – Stay Motivated

This might be a funny step, but it’s really important.

We encourage you to be motivated. You have to do the work. Learn the products. Look at what’s going on.

These deals are not gonna walk into your computer, which is why motivation is everything.

Work for what you want, and the work will pay off.

Every tool that you need and every piece of the puzzle is out there. It’s up to you to put it all together. 

You have to push yourself and say, “What do I need to do to close that deal today?”

Let that question ring in your ears.

Step #9 – Hunt For Deals Constantly

I don’t want to hear that there’s no business out there.

A commercial mortgage broker doesn’t need a license, and you’re telling me that out of hundreds of millions of people, there are no deals?

There are a thousand people every day who need your product. So keep hunting and do it constantly.

Step #10 – Love Your Livelihood

This may be the most important step of all. If you want to get into this field, you have to love what you do and have a fire for it.

You cannot look at failure as an option. Success has to be your only option. Basically, there is no plan B. That’s the mentality.

To make money, you need to close, which means you will close no matter what. 

This is how you are going to make a living and pay your bills in this industry. And you can make a great living too, better than most.

There’s business out there to be done. You just have to find it, learn from it, and earn from it.

Choose Us As Your Mortgage Broker

If you’ve found our talk inspiring and need a mortgage broker, call us at 562-221-0900.

We’re collateral-based lenders and are actively closing deals fast.

Check out our Home Page for more information.