Commercial Mortgage Broker Tips | Tips for Commercial Mortgage Brokers

Jack and Marcy share some real-life tips for commercial Mortgage Brokers:
“Jack: Okay, we’re starting; we’re improvising here.
Marcy: Yes, because we have had mechanical problems this morning.
Jack: I’m embarrassed to tell you this is our, what, fourth attempt to make this, to cut the video.
Marcy: Yes, the computer didn’t work; now the laptop’s not working, so we’re back to the iPhone.
Jack: Okay, let’s jump into it.
Marcy: All right, here we are.
Jack: This is Marcy and Jack at Gelt Financial. You see our Gelt Financial sign behind us; that’s how you know we’re legitimate and real. So, we wanted to make this video directed toward mortgage brokers and to try to give them some tips. Or I don’t want to use the word “advice,” sounds like…
Marcy: No, like it’s just like we’re just here to give you some input.
Jack: Street common. I’m from Philadelphia; everything’s about the street, common-sense ways to make money and do deals.
Marcy: Okay.
Jack: So, let’s start with the number one, maybe we were talking about focusing.
Marcy: Focusing, uh…
Jack: You wanna go first?
Marcy: Sure, I’ll start. So, we were just wanting to put out there that we think that as a mortgage broker, there’s so many different types of properties. So, for you to figure out what property, type of property you want to market for yourself is a good start. There’s mixed use, there’s residential, there’s, you know, people that are going into foreclosure, there’s bankruptcy. You know, you can mark it out that you want to help people that are having issues with their property, that have like a lot of liens, you know, from inspectors. You know, different cities have different inspections, and then we see properties like that all the time that have all these liens, and then our loan cleans them up. Just like to start off with what you want to do out there in the world.
Jack: So, I would say on that line, you know you have a choice: you can either try to be everything to everybody, be like a food court, or you can specialize in one thing. I find that what works better is when you specialize in one or two things. For example, you know, if you like, we have brokers who just specialize in hotels, or gas stations, or properties in foreclosure. When you do that, one, you hone in on the marketing, and you learn to really get a lot of good quality leads in that. Not a lot of crap, junk leads. I can’t say crap on this, or maybe you can, I don’t know.
Marcy: Well, we can say whatever we want.
Jack: We can say whatever we want, but you get it. You’ll hone in and really master the leads and how to get the leads. But till you learn the investor and the lenders’ guidelines, where—if you try to do everything, what happens is you’re just doing everything in your—you’re throwing.
Marcy: And you’re not being successful because you’re just spreading yourself all over the place.
Jack: That’s right. Reality is 90% of the time is wasted. What people have to do is learn to say no quicker and more often and hone in on focusing on getting the referrals and closing the right deals. So, give an example. If your niche is gas stations, hotels, construction (we don’t do construction, but it’s a niche), land, churches (I know guys who just do religious organizations, we don’t do them).
Marcy: We don’t do those loans, but…
Jack: But it’s a niche. Properties in foreclosure, properties with L & I violations that the cities are breaking their jobs. Pick one or two niches and focus like a laser beam on them. Because what happens, I find is a lot of brokers, they just say they try to do, especially in the beginning, they try, yes, yes, yes, yes, yes, they work on everything. But remember, you’re not paid to work on a deal; you’re paid to close a deal. So, our advice, if you want to say, or our experience tells us, if you pick one or two things and focus on it, learn how to market it and get the leads for that in the most cost-effective way and get referral sources, as well as learn the investors’ guidelines on it, so you know exactly what you’re looking for.
Marcy: Right, and that’s very important too. You have to figure out where you’re going to put the loans. So, I always tell mortgage brokers, have, like, do your research, figure out what lender you’re going to place which type of loan with. Okay, so, you know, for us, and we’re doing this to tell you a little bit about Gelt too. We handle a lot of, like, problem loans, I’m going to say, you know, like—
Jack: Well or deals that need to be close quick.
Marcy: Right, or we exactly like we have a lot of deals lately that come to us from another lender that they didn’t close, and the broker comes to us with a whole package, and we can get that done within 10 business days. We just get the—
Jack: Sometimes less.
Marcy: Sometimes less. Again, the title updated, and then we do our package, and then it closes.
Jack: A lot of them have very good credit. You’d be amazed. A lot of times, people think we only do deals with terrible credit. We do, but a lot of them have good credit. But—
Marcy: And then, but again, one more thing I wanted to point out, that um, just another point for the brokers is that know the property too. Like when you, like, reach—when your borrower reaches out to you, especially if it’s a refinance, know the property. Like, ask all those questions. Do due diligence on the property because the worst part, like about our deals sometimes, is that the broker comes to us, and they don’t know the whole story, and they don’t know everything about the property. So, I would suggest because this is like suggestions to make sure you ask your borrower every question there is so that you know every detail of that property.
Jack: Can I add something?
Marcy: Sure.
Jack: It’s not just the property; get to know the deals. And we’ve made a bunch of videos on this, and we’re going to keep doing it because a lot of times, for some brokers, they’ll send us a deal; they don’t really understand it.
Marcy: No, and they don’t know what they’re doing sometimes.
Jack: They don’t really dig deep into it. And what you need to do is I would, instead of spending 5 minutes on the deal and shooting it to 20 lenders, I would spend a half hour, 45 minutes, whatever time amount you need on the deal. Ask the borrower, really get in there, ask him questions about the property, about him, his motivation. Don’t forget the most important thing is to find out their motivation, their hot buttons, what their goals are, and that way you can solve them and add value to them. So, I would ask the broker every question about the deal, about the property, about them, their credit, their income, just whatever. A lot of times we’ll see deals as an example, and maybe the credit’s not good, and the broker always says, “Oh, they went through a divorce or this or that.” They sometimes, they don’t even know, they’re just making it up. You know, if they’re getting cash out, ask them why they’re getting cash out, what’s their motivation, and really dig in. A lot of times, brokers are in such a rush to get the deal and get it submitted that they’re not doing the proper homework and they’re not digging in.
Marcy: Right, you have to understand it, otherwise it’s not going to close. And the only way that anyone makes money and gets done what needs to be done is if a loan closes.
Jack: And I would say that borrowers will have more respect for you by spending more time on the deal, and you’ll set yourself apart from just a regular broker as more of a consultant. I’ve made a few videos, and we’ve talked about exclusive relationships and non-exclusive relationships. I don’t want to get into it here but check it out. But the more you dig in, the more likely the deal will close. So, invest the time to make the money so—
Marcy: Learn your deal.
Jack: Yes, how about this, learn the deal, and you will earn the deal.
Marcy: Perfect.
Jack: I just made that up.
Marcy: Excellent.
Jack: I have no—
Marcy: Excellent, it’s a good tag.
Jack: I happened to notice, by the way, that Marcy has a different set of glasses.
Marcy: Yes.
Jack: I pointed out that last video that I screwed up, but I wanted to get the credit, but I’m a guy, and I do know.
Marcy: These are like my new summer glasses.
Jack: They’re very nice, very nice. I have one set, but I need another set.
Marcy: Nah, I have to have fun.
Jack: Actually, I have two sets. I have a set for seeing up close, for seeing far back, but I need a new prescription because neither one is accomplishing the goals.
Marcy: It happens.
Jack: Do you have those try things or whatever?
Marcy: No, these are just readers.
Jack: Oh, they make me dizzy. I really need them, but they make me dizzy.
Marcy: Okay, one more thing I wanna say.
Jack: Oh yeah, yeah, let’s keep going on.
Marcy: And then we’re gonna, okay, we could talk all day because we like to talk. Anyway, also brokers—
Jack: I’m not really a talker. I don’t enjoy talking that much.
Marcy: (continues) Also, brokers, when you send your deals out, um, make sure who you’re sending them out to is not another broker because a lot of brokers out there advertise themselves as direct lenders, and they’re really not lenders. So that’s just another thing to watch out for because it just honestly, it wastes everyone’s time. I mean, sometimes they can get the deal done for you, but you’re better off going to a direct lender, which we’re a direct lender, but it’s just, it cuts out another person. So, do your research and find out if they’re really a lender because if they’re not, they’re taking it and sending it to another lender and it even could be to us, so.
Jack: Yeah, we hear all the time. I’m going to say it feels like almost every day. Maybe it’s not every day, but it’s almost every day.
Marcy: All right, we’ll even say once a week, I mean, at this point.
Jack: Oh, it’s more than once a week that a broker sent a deal to somebody else. They thought it was a lender. The deal is either coming to us, and there’s two or three brokers.
Marcy: It’s kind of like a cycle. It ends up to us anyway.
Jack: It’s a cycle, or they’ll send it to someone, they get to closing, and the lender doesn’t fund the deal.
Marcy: They don’t fund. So that’s another important thing. You need to know how—
Jack: And that, you hear more than that once a week.
Marcy: Oh, I hear all the time. I mean, literally all the time. So do your research on the lender, you know, look online, look for their online presence, look at their reviews. Um, find out because if they didn’t close another deal, there’s a percentage chance that they’re not going to close your deal. You know, we don’t operate that way.
Jack: So, know who you’re dealing with. Know who you’re dealing with. Look, people come to us, we’ve been in business since 1989, a very long time. You could tell by my gray. It’s an old joke already, but it’s the truth. Um, so know who you’re dealing with. When you’re dealing with Gelt, you’re either going to Marcy, you see myself, or Noah. There’s always someone here. You’re going to get an instant yes or no and the rates right on the very first call.
Marcy: And, you know, honestly, I say this to all the brokers that I do deal with, we do say no a lot.
Jack: A hundred percent.
Marcy: You know, I’m not going to tell you that we are going to do every deal.
Jack: We say no more than we say yes.
Marcy: Yes, absolutely. Because, you know, we’ve been in business. Jack’s been in business, and he’s been very successful all these years because we’re there—we do our due diligence on the property to decide whether we’re going to do the deal or not. And, um, you know, we’ve been successful, obviously. We’re still in business. So, I just want you to know that I do say no, but don’t get discouraged. Keep asking.
Jack: You know, also, I want to just talk a little bit. I’m going to make another video when we figure out our I.T. problems. This sounds so backwards here; it’s unbelievable. On marketing, because today you can target market to such a finite degree, it’s really unbelievable. Many years ago, in 1989 when I started, I used to advertise in the Philadelphia Inquirer in the there’s called neighbors’ section.
Marcy: You mean when there was paper, newspapers.
Jack: When it was papers, and it would have the rate and the term, and it would hit everyone. It would be a fortune. But today, through the power of the internet and digital marketing, you could hone in on whatever you’re targeting. So, for example, if you want to target hotels or properties in foreclosure, you can target them, let’s say, which I think is a great niche. If you want to target properties—today we’re making this on May 7, 2021, and there’s an eviction moratorium on a lot of properties. You can’t evict tenants. If I was a broker, I would target landlords, landlords with equity that can’t evict tenants. That’s a fantastic niche.
And you can also target when they have balloons coming due. So, you can really hyper-target anybody you want through the power of digital media. So, I would learn that, and I would invest in that. You know, a lot of times, people go into the mortgage broker business, they think they don’t need any investment, and they think they’re going to make a fortune upfront.
Marcy: No, you got to spend money to make money.
Jack: A hundred percent. I tell people if you open up a restaurant, you’re gonna spend two, three hundred grand or anything you’re gonna invest money. So, Marcy’s right, you have to spend money to make money. Target market, experiment, don’t be afraid to try something, and it won’t work, or it will work, but you’ll learn each time. Keep improving it. But target market, pick a specialty, and don’t be afraid to pivot if what you pick is not working or it’s not suited for you or the market changes.
Marcy: Then change.
Jack: Then change, you know. Someone was in the office, um, I don’t know, right before COVID. I forget when, when we actually had people in the office, and they were saying, “Wow, you’ve been here whatever, 30, you’ve been in business 33 years or 32 years at that point, whatever it was.” I said, “That’s true, we have” But the truth is I was thinking about it. The truth is we started the company February 1st, 1989. That’s an absolute fact, but also—
Marcy: But it changed.
Jack: Yes! That’s the truth. Every 3 to 5 years, we’ve had to reinvent the company, and we’ve had to pivot to the market, right? Because if we didn’t pivot to the market, we would be out of business. So, you have to learn to pivot, and don’t be afraid to pivot. Some people think it’s, “Oh, it’s a failure,” or “Oh, this.” Don’t look at it that way. Be constantly looking forward, always. Don’t look in the past, always look at your next steps, and because the economics markets constantly changing, everything’s changing.
Marcy: Right. So, in a sense, this video is also a motivational video. We want you to be motivated. You have to do the work, learn the product, you know, look what’s going on, spend the money, and you have to be self-motivated.
Jack: Yes.
Marcy: You know, you cannot—these deals are not going to walk into your computer. You have to be self-motivated and work for it, but they’ll—but the work will pay off.
Jack: And the deals are out there, you know, in the commercial area, a commercial mortgage, you don’t need a license in, I think it’s 40 or 41 or 42 states, I always get it confused, but it’s hundreds of millions of people. So, I don’t want to hear that there’s no business out there. You’re telling me in out of 200 million people who you don’t need a license to do business on that there’s not somebody every day who needs your product. There’s a thousand people every day who need your property. There’s five thousand people every day who need your product. So, the business is out there. The lenders are out there. Every tool that you need in every piece of the puzzle is out there. It’s up to you to put it together.
Marcy: Right, self-motivation.
Jack: You know, a 100%, you have to push yourself and say, “What do I need to do to close that deal today?” And I’ll tell you another thing, don’t look at this. If you want to get in this, don’t look at not succeeding as an option. You have to look at it as you don’t have a plan B; you need to close loans.
Marcy: This is your livelihood; this is how you are going to make a living and pay your bills.
Jack: And you can make a great living.
Marcy: That’s it, yes. There’s business out there to be done; you just have to learn it.
Jack: Okay, I think we got it all, so…
Marcy: Yes.
Jack: Let’s do a little pitch, so…
Marcy: Oh, wait, so I usually wait. I have to, like, show you my shirt today. I usually go like this, but I’m wearing my peace sign today, so I wanted to show everyone.
Jack: Before we do the peace, can I do…?
Marcy: Absolutely.
Jack: So, remember, we’re doing deals, commercial real estate, and investment real estate deals, 100 grand up to three, four, five million bucks. The average deal is about 400 grand, you know—
Marcy: Or like a million, too.
Jack: Yeah, yeah, a million, million five is perfect. You know, we’re short-term lenders, could be six months to three or four years, even though we have like 40-something deals on the books for more than 15 years.
Marcy: Yeah, because some people just can’t get it together.
Jack: Yup, a 100%, and as long as they’re paying us, we’re fine. We can move very fast. We most of the deals—I actually looked the other day; I was doing something—
Marcy: Yeah.
Jack: I think the last 20 deals we closed; we didn’t order an appraisal. We ordered an appraisal on one or two of them, and like three or four came with appraisals.
Marcy: We just have decided that we can do it with that, you know, with the rent roll, with the cap rate. We look around in the area.
Jack: We had a meeting.
Marcy: We meet; we have a team. There’s a couple of us; we go over what we think the value is. For us, it’s about the property being able to pay back our loan. That’s it.
Jack: We’re collateral-based lenders. We don’t really look at the credit, but you know what? We’re interested in forward; we’re not interested in backward. We’re interested in the collateral. Doesn’t mean we can’t do every deal, but we’re actively closing deals. We’re also doing—we just closed Monday? A Friday? A Preff equity deal in Miami; I forget what day it closed.
Marcy: Yeah, we’re doing a lot of mezz deals, which is—
Jack: Oh yeah, we just issued a term sheet yesterday for a million dollars on a—
Marcy: Just to give you, like, a little mezz a second within our loan-to-value ratio that we need. So, I mean, there’s a lot of deals out there that we do.
Jack: Check us out at geltfinancial.com. Also, don’t forget to like the video, like the YouTube, the video, whatever the heck this is. What else? Oh, click the button, like our channel so you’re notified. Click the bell or the button so you’re notified of more videos, and we produce a whole bunch of other ones. We get calls all the time on these videos. It’s really unbelievable how much brokers like him, and I had someone— Oh, our thing is twisting, believe it or not. We’re doing this with my iPhone because we’re having problems.
Marcy: All right, we got to finish it.
Jack: Okay, very quick. Uh, I got a call, actually it was an email, or email, I forget already. Someone told me he paid, I forget another company, like 3 or 4 grand to have mortgage broker education, and he learned more on our free YouTube videos. I think he said he listened to them. He said, I think he said he spent 10 hours on a Saturday or something. I actually felt bad for the guy. I’m the boringest. You’re more excited than me. I’m the boringest person in the world. So, you have to watch us. But anyway, check us out, give us a call at 561-221-0900. And remember, you can make whatever you want. I have to tell you, the fact that I made a living and supported my family and did fairly well for these 30-something years is a miracle. If anyone knows my story, it’s a total miracle. And if I could do it, you could do it. Anyone could do it. All it takes is your hard work and perseverance. And don’t be afraid to pivot. Don’t be afraid to do all the things that you have.
Marcy: And don’t be afraid to say no.
Jack: You know, I wanted to make a video on the power of saying no because you learn more. You can do more by saying no than yeah.
Marcy: Because you have so much strength and you have so much power being able to say no.
Jack: And you can focus more. And everyone wants to. I always use the expression, more people, more—this is the truth—more people and companies die from indigestion than starvation today. So, everywhere—
Marcy: It’s like a little weird comparing it to food, but okay.
Jack: Because everyone wants to do so much. They don’t say no. And it really comes back to our first thing. Say no and specialize and focus.
Marcy: And then you’ll get where you need to be.
Jack: Okay, have a great day. And that’s the most important. Marcy’s peace. Marcy, stand up, give them one more peace.
Marcy: Okay, here’s my peace sign for today. Enjoy your weekend.
Jack: Take care.”