With many lenders cutting back or temporarily suspending lending activity, commercial borrowers who need credit are flocking to mortgage brokers. But I notice many brokers spinning their wheels by shotgunning loan apps all over town. In today’s economy, brokers instead need to do the following
1. Choose a few loans that have ALL the necessary attributes to fund. Then work only these deals – hard!
2. Make sure the borrowers you choose to work with understand that the financing they will be offered will be more costly, perhaps much more costly than they anticipate. And that they will accept this financing.
3. Make sure that the borrowers you get financed at a higher interest rate come back to you for refinancing once their property stabilizes.
4. Only work deals where borrowers are willing to pay you a commitment fee for your time. This is YOUR fee; don’t share it with potential lenders
5. Make sure anyone you work with has all documents, tax returns, financial statements up to date. Even hard money lenders are requiring documentation now.