Jack Miller, being in the lending business for over 35 years, tells commercial mortgage brokers the number one thing they need to know and do to succeed.

“Hello, this is Jack Miller. It’s about Friday. It’s Later in the day. I’m winding down, as I think you know. If you’re watching this, you know I’m with Gelt Financial. I started the company in 1989. We are non-bank commercial real estate lenders. We lend on commercial real estate, investment real estate. We do a tremendous amount of business with mortgage brokers, and we work with brokers. I don’t say I’m embarrassed, say you can see by my grays, not from the mortgage brokers but just my age. For over 30 years, we started. I started the company February 1st, 1989. I know a lot about the mortgage business, and I work with all types of brokers. I’ve made numerous videos on helping mortgage brokers, and that’s the purpose of this video.
I want to focus on, take a few minutes out of my day and educate mortgage brokers on what I call mortgage brokering. The first step, and to me, the very first step is to understand the deal. So, what I mean by that is take the time, and this is toward mortgage brokers and new brokers, maybe experienced brokers. The very first thing you do is have a complete understanding of the deal. Understand what the borrower’s situation is, what the collateral is. I’m going to focus on commercial lending. What the collateral is, what the value of the collateral is, what the income is, what the expenses are, realistic, whether it be as is or projecting. So, a lot of times, we do stuff that has a lot of vacancies. Maybe we’re doing a 10-unit building that someone’s rehabbing, and it’s all vacant now. So, we want to understand the as-is income, as the projected income, the as-is expenses, and projected expenses. Understand it. Make sure you master it. Don’t get involved with the deal only knowing little bits and pieces of it.
I think it was Abe Lincoln, to someone, as is now wise tell. It’s a bunch of nonsense, but I’ll tell you that anyway. Somebody told me that they asked Abe Lincoln, “What would you do if you had 45 minutes to knock to chop down a tree?” And he said, “For 35 minutes, I would sharpen my axe or knife or whatever the heck you used to knock down a tree.” But my point is, take the time to learn about the deal. Learn about the property, what type of area is in. Are there a lot of board-ups in the area? Zoning? Know the property inside and out. Master it. If it needs rehab, find out what type. If they have estimates, learn it. Learn it. Learn it. Ask every question in the world you can about it. Learn about the borrower. Is he employed? What’s his income? When did he buy the property? What’s his debt on the property? What’s his motivation to come to you to refinance or to buy it? Is it for rate and term? Is it for cash out? Is he in foreclosure or is he delinquent on his mortgage? Or do they have a partner he’s fighting with? Learn his motivation. You can’t believe that times I speak to mortgage brokers, and I’m not criticizing them, who don’t know the basics of a deal.
So, I’m imploring you, if you want to be successful in this business, learn the deal inside out. Learn about the borrower. Learn about his motivation. Learn about whether what his income is, whether he declares his income, what he doesn’t declare. Ask a million questions. How’s his credit? So, you are better prepared to help him. Because what’s going to happen if you’re not prepared? If he just emails you some stuff or if you get it from another broker, from another broker, from another broker, and you send it to a lender like Gelt Financial or someone else and they ask you a question and you don’t know the answer, I want to be honest, you don’t look great. And you’re wasting your time and you’re wasting the lender’s time. But more important, you’re not accomplishing your mission. If a borrower is bringing you a deal, you’re paid when the deal closes. That’s your goal. Get the deal closed and get the borrower the best possible terms you can, whatever that may be. So, if you don’t take the time to really learn the deal, which I’m going to go into a little bit more today, some of the questions you should ask him and ask them probing questions, you’re not doing your job to the fullest. And the chances of you closing the deal and making less money is higher. The more time you invest in the deal, the more time you spend on the deal and truly understand the deal, the greater the chances of you making money.
You know, I can’t tell you (Coughs), excuse me, how many, um, (Coughs again), I apologize, how many mortgage brokers have come and gone over the years that we’ve dealt with, thousands, probably ten thousands of them. But the ones who make it are the ones who don’t take the approach, ‘Oh, I only want to spend a minute and make a fortune,’ take the approach, ‘I want to spend as much time as possible and make a reasonable amount of money.’ So again, if you get it by email or no one faxes anymore, however you get the deal, speak to the broker. Don’t just go back and forth by email. Ask him a lot of questions, every possible question about him, his income, his credit, why his credit is what it is. You know, a lot of times people say, and we do deals with problem credit, that’s what we focus on. Our tagline
is, ‘When your bank says no, we say yes.’ So that doesn’t scare us. But it’s nice to know what the reason is. Did the guy give you an example? Either the guy is just as careless and doesn’t care about his credit or sometimes there’s a tragedy, someone passed away, or he lost his job or whatever happened. So, take the time to learn about it.
So, I’m imploring mortgage brokers again: educate yourself, learn everything you know about the borrower, the borrower’s income, the borrower’s expenses, where the borrower resides. And you know, learn about this his or her credit. Learn about the property and learn the motivation behind the deal because unless you understand the borrower’s motivation, you can’t successfully do the deal. We get tons of deals, and they say, “Oh, the guy’s looking for $200,000 or $300,000 or $10,000 or whatever the amount is,” and we said, “What’s he gonna do with the money?” The broker doesn’t know, so how can the broker do his job? So, I guess my message to mortgage brokers is lesson 101: spend time on deals. Your goal should be that anyone you send the deal to, whether you’re sending it to Gelt Financial or other lenders, that you already know the answer and are supplying them with the answer. Don’t make people have to guess for that answer because if you give the lender or the underwriter that answer ahead of time, you’re gonna be more successful. Your deals are gonna close faster and easier, and then you’re gonna be a real professional. So, spend time with the borrowers.
Now also, ask probing questions. Look let’s be candid; some people are very intimidated or scared or embarrassed about their financial background. You know, we’ve all, and when I say “we” and have gone through hard times and have suffered, sometimes it’s publicly, sometimes it’s privately. We’ve all been beaten up by life. We all get ate, whatever it is. So, probe with a borrower. If they’re telling you something, make them feel relaxed about it. Don’t make them on edge, don’t make them like you’re grilling them almost, you know, treat them with the respect that they deserve, whatever hardship or whatever they went through or going through, whatever it is, deal with it the best you can. You’re a professional; act like a professional. Get the details, ask the probing question. So, you know, give you an example: if we get deals and the borrower maybe a rent an apartment for effect to a thousand a month and they’re buying a house for $200,000, and we often say, “Well, are they moving in the house, or are they going to continue to rent the apartment?” Well, logic says that if they’re renting an apartment and they’re buying a house, chances are they’re gonna move in the house. But a lot of people don’t do owner-occupied deals. Did you have credit problems? So, there’s sometimes that borrowers don’t tell you the truth, so you have to probe them and get to the truth. And sometimes you have to ask a question – in three different ways to get to that truth. But you’re ultimately gonna do your job because if you give them what if you get the wrong information, there’s no go back, there’s no second chances, sometimes in life there they are, but it takes so probe with deep questions.
Take the time to understand at bars. I know when I was an active loan officer, I used to try to spend as much time as I could with a borrower. Today, people are minimalist; they try to spend as little time as possible. But I made it a mission to try to spend as much time with the bar till they were sick of me because I wanted one, the borrower to trust that I was going to do the best job I can for them. And two, I wanted to understand the deal from every angle. And I looked at it as a personal failure that if I took the deal to one of our underwriters and I didn’t know an answer or if the underwriter had to ask me a question if it wasn’t in my package and I say, “You know, Jack, you didn’t do a good job. You should have anticipated that question. You should have out thought the underwriter because then when you outthink the underwriter not in a way to take advantage of them but when you anticipate a question and have the answer for it, you’re going to be a professional and you’re gonna succeed.
So again, learn as much about the borrow as possible, learn as much about the property as possible. You know if there’s vacancies if there’s board ups is the neighborhood of I crime as much as possible because it’s going to come out so you don’t want to waste your time and the borrower’s time it’s better to address these issues up front. People sometimes are scared of that; they think, “Oh, let me just hide it. Let me just hide it.” That’s the wrong approach. The approach is to get the bad news out first, and the good news will follow, and the good news will work with themselves. So again, mortgage broker in 101, speak to the borrower intently for a long period of time, whether that be five minutes, ten minutes, a half an hour, an hour, whatever it takes. It will increase your chances of closing the deal and making money, and that’s how you make money and that’s how we as lenders make money when the deals closed. Spend time at the borrowers, understand that, ask them questions. If you don’t know, for example, let’s say it’s a retail shopping center and you don’t have experience in retail shopping centers in underwriting, you don’t even know what to ask. For example, then you should do research ahead of time or after you speak to the borrower. And if he says, for example,
let’s say it’s a retail strip center and you’ve never done one before, you don’t know the difference between common area maintenance and credit tenants’ saw or triple net leases. You don’t understand that. That’s perfectly legitimate. There’s nothing wrong with that.
What I would do is I would speak to the bar, get the basic information, then as soon as you hang up the phone with the borrower, I would be YouTubing and googling everything you can about common area maintenance, triple net leases, a credit tenants’ retail strip centers. You take that time to learn and educate yourself because this is a profession like any other profession. If you want to be a lawyer, you’re gonna go to law school for, I don’t know, six years, whatever medical school is or any other profession you’re gonna go to school, you know what. If you want to be a mechanic or a plumber, you’re gonna go to a tech squad on how to be a plumber. I never learned it, but you’re gonna pay the price in an education. So you have to do the same thing in this business.
There are certain types of properties that we don’t do and we don’t do them because we don’t have the education in them. We haven’t learned those products yet doesn’t mean they’re bad so what I’m saying if you’re going to do a specific product whether it be a credit tenant deal or strip center or a multifamily or something out of what your knowledge faces there’s no shame in that it use it as an opportunity to expand yourself the truth is if you want to be successful invest in your own education take courses learn read today the power of the Internet look I’m delivering this message to you the power of the Internet is unbelievable you can learn about just about everything on YouTube very easily I know a while back. I’m delivering this message to you. The power of the Internet is unbelievable. You can learn about just about everything on YouTube very easily. I know a while back, I wanted to improve my use of Outlook. Believe in our Outlook test, I wasn’t doing a good job. And what I did for three nights in a row, I was just YouTubing Outlook tasks, advanced Outlook tasks, Outlook capabilities, and I watched each night. I spent a half-hour watching it. You know what? After three or four nights, I felt like I really know it. That’s all it takes. All it takes is effort. Don’t look for a little easy way out. Spend the effort to learn the products.
Now, once you have the product and once you have a good feel of what the borrower is looking for the property, whether it be debt services or a dozen debt service the whole deal, again, if you don’t know what or how to figure out that, there’s nothing wrong with it. Just Google or YouTube it or call us or send me an email. We will teach you. In fact, we should come up with a whole education series on this stuff because it’s just unbelievable out there. And by the way, we’re not selling anything. All we want you to do is if you get a deal that you think meets our guidelines, call us. It’s funny. I put out a few of these for mortgage brokers. We don’t charge anything. We’re not selling anything. All we are is portfolio lenders, and all we want to do is educate brokers because we educate brokers and they’ll make money. We’ll make money, and it’ll be better for all. But I get calls, and we get calls all the time thanking us, saying, you know, it’s unbelievable. You guys aren’t selling a product. You’re just educating. We should really do more of it. Like, we should encourage you to do more of it. I’ll do more of it, but anyway, educate yourself. But once you get a full understanding of the deal, okay, then do the same thing if you have a list of one lender or five lenders or 20 lenders or whatever. Learn what they’re looking for. So, step one is understand what the borrower wants, understand the deal, take an application step by step, go through it, understand it. Be a master. You should know that deal inside and out. You should know it better than the bar or better than anyone. You should be the master of that deal. No excuses for you not to accept. You don’t want to put in the time or effort. That’s really the only excuse. Most people do want because most people want to be successful, and to be successful, you have to put the time and effort and be diligent.
But then take the time to learn what the lenders are looking for because you have a whole assortment of lenders out there. Everyone has their own sweet spot, and it’s a lot of times it’s constantly moving. You know, I’m making this May 8th, we’re I don’t know week 6 or 7 or 8 into this Corona that’s been a market up setter for a lot of people, a lot of lenders. We’re still lending, and we’re very aggressive, and we’re doing deals. But you need to take the time just as much time as you are with the borrower. Take as much time, more time with the lender to understand what type of deals they like and what type of deals they don’t like. Don’t just throw stuff against the wall and hoping it sticks. Go with pinpoint precision. So, if you know, for example, Gelt Financial is what we focus on, leverage. We like low leverage properties because we learned along the way over the 32 years, no one could have predicted the Corona crisis, but there’s always a crisis around the corner. So, we focus on the properties more than the borrower. So, we’d rather have a great property. We’re not as focused on the borrower’s credit. So, if you have someone with a great property with not a strong credit, that’s perfect for us. But there’s some lenders who, you know, 650 and above credit or 700 above or
300 or 600 or above. But learn because what’s gonna happen is you’re gonna be all over the place. You’re gonna submit the wrong deals to the wrong player. So, if you invest the time, look at the lender’s website, speak to the lender, and I would say, “What kind of deals do you like to do, and what don’t you want to do?” And then send them those deals. Don’t send them deals that you don’t want to do. Today, happen to be speaking to a very, very nice lady who called me about a marina, and I’m sure it was a great property. We don’t know anything about what marina is. We don’t do marinas. She could talk to me from today or tomorrow; we’re not gonna do a marina. And literally, for 10 or 15 minutes, she’s trying to talk me into this marina deal. She literally wasted her time and marked my time. Total waste of time. What she should have done is look for lenders who focused on marinas and go to them instead of trying to put a square up, what’s the expression, a round on a square peg or, you know what I mean?
Equally, learn what a lender likes and what a lender doesn’t like. Learn the sweet spots, learn the trade-offs. Try to get into the head and psyche of the lender because every lender is different. You know, some lenders are selling them to Wall Street, some are selling them to life companies. You know, we’re portfolio lenders, so we have a lot of flexibility and a lot of creativity. We can do non-recourse deals; we can do deals without appraisals if we like the deal. We can find 20 ways to structure it. So, what you’re really trying to do is you have to be the mastery of the borrower and what the borrower is looking for and the lender. And when you mesh the two of them, it’s a beautiful thing.
If you bring us a deal, for example, if you speak to a borrower and they don’t want recourse or they need to close quick and there’s no time for an appraisal, 90% of the lenders, let’s just say it’s a five-unit property, for example, I’m guessing 99 percent of lenders want an appraisal on a five-unit property. If it’s the right deal, we’ll deal with that an appraisal, okay? We’ll come up with our own value. It saves tons of time. Not every deal. Don’t call me on every deal and say, “Oh, why don’t you do it on this?” So a good amount will do it, but if you find, if you know that the borrower has a time frame motivation and you know that Gelt Financial will do some deals, not all deals, don’t go crazy if we don’t do your deal without an appraisal, but we’ll do it. We do a good amount of deals without an appraisal or internal praise, though. And you mesh them, then you’re gonna be a success for the borrower, for the lender, and how that success is gonna come success for you in terms of referrals, in terms of credibility, and in terms of you getting paid.
So, my lesson for you today, I’m probably droning on too long, is learn from the borrower, learn from the lender, take the time upfront to invest in your education. And the reality is you can never be stifled with that because if things are constantly changing. Again, I told you we’re making this, I don’t say in the middle of the corona, God knows when it’s begun and when it’s ending, but we’re making this in the corona lifetime, in the virus lifetime, and the home lock, it’s changed in the past eight, nine weeks. So brokers have to re-educate themselves, but it’s part of the process. It’s a continuing education. In every market, there’s opportunity. Don’t think in any market there’s not opportunities. We’re closing loans. I know people are closing loans. There’s a lot of people aren’t closing loans, but you know what? It’s a big country. You can do it today. It’s easy to do it through the internet. You have the tools; you have the power. You can make a great living being a mortgage broker. You can accomplish your dreams. Look, I happen to be dyslexic. I never went to school. I barely made it out of high school, and I’ve led a fantastic life and been very accomplished only because I took the time and I constantly take the time to invest in deals. I don’t look, and the successful people in life do not look for shortcuts, then it look to how to do a fifteen-minute and job in four minutes. They’re looking for how do I get that job done successfully. And you have to invest the time and education, and that’s a continuing thing.
So, look, I hope you like this video. I’m sorry I didn’t mean to drone on. I don’t mean to. If I came across flipping or insulting, that’s not my purpose. Honestly, it’s not. All I want to do is educate people because brokers are always asking us for education. I want to educate people who are brokers, who want to be brokers, and I want you to be more successful. I am an advocate on the mortgage business, whether it be residential or commercial. It’s a, and when I got into it, rates were, you know, in the teens. Now they’re almost non-existent, so you can make money; you can be successful in any environment. It doesn’t matter, computers, internet. Don’t let anyone give you an excuse why you can’t be successful. You know, if you want to find a solution, you’ll find a solution. If you want to find an excuse, you’ll find an excuse. I want to give you the solution, and the solution is to invest in yourself and focus on the long-term productivity and your knowledge, and you’re gonna be super successful. Look, I hope you’ll have a great day, great night, great whatever you have now. God bless you, and remember when your bank says no, we say yes. Gelt Financial, take care, and be blessed. We love you. Thank you.”

Category: Mortgage Brokers

Tag: pro tip

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