One of the most crucial factors of any commercial mortgage broker’s success is the individual’s ability to generate quality leads. Brokers need to focus time and energy on making sure new deals are consistently entering their pipeline.
There are four main components brokers must be aware of if they are looking to attract additional business and close more loans: the types of deals their lenders are seeking; where to find these loans; the needs of their customers (both borrowers and referral sources); and how to communicate the value of their services.
As you seek out commercial mortgage leads, the first thing you should do is reach out to lenders who handle these loans and develop a complete knowledge of their products, the types of loans they offer and the borrowers they serve. Taking the time to get to know a commercial mortgage lender not only shows that you are committed to bringing them business, but that you are willing to put in the effort needed to seek out the right types of transactions.
When you’re learning about a lender with the intent to do business with them, don’t be afraid to ask questions about their business and their process. Commercial mortgage lenders will be impressed by your interest in their niches and your commitment to understanding their product offerings.
Know where to look
To generate quality commercial mortgage leads, brokers first need to know where to find them. One of the most common sources of leads is the local bank.
Many successful brokers have developed partnerships with bank workout departments, which use brokers to find financing options for troubled assets that the banks are unable to retain in their portfolios. Let your local bank know you are a resource for maintaining relationships with the clients who don’t qualify for their products, because you provide alternative financing options.
Accountants are another great source for brokers looking for new business. These professionals know the financial situations of their clients inside and out, so they will know who won’t be able to obtain bank financing and who may require the assistance of a broker to find a suitable alternative.
Many Realtors can tell you about a commercial property sale that fell through because the borrower couldn’t get the financing they needed for the purchase. Reach out to them and sell yourself as a valuable resource who can find the funds needed to save future sales and commissions.
Real estate attorneys are another valuable lead source. Reach out to attorneys who have been involved in previous transactions and let them know you can provide financing resources for borrowers that can’t access bank financing.
Additionally, your current book of business and referral network will be valuable as well. If you close residential loans, seek out past borrowers who own commercial property, and let them know you can help if they need a mortgage in the future. If you’re strictly commercial, reach out to borrowers whose loans will be coming due and remind them you can still help them acquire financing for their property. Likewise, let your current referral network know you can help borrowers looking for small-balance commercial mortgages or other types of unique commercial mortgages.
Understand your borrowers
Industry expertise and the ability to connect borrowers with the right commercial lender are two of the main reasons why people choose to work with mortgage brokers. In order to demonstrate your value, you need to get to know typical small-business owners and those who advise them, and then explain how your services are an asset.
One area of specialty commercial lending you may want to focus on is small-balance commercial mortgages. Borrowers seeking these loans often own their own business and require alternative financing for any number of reasons.
Some of these prospects are still recovering from credit issues brought on by the recession. Others are facing ballooning mortgage notes and a short time frame. Still others cannot verify their income to a bank’s satisfaction. This is where you come in. To gain the trust of these borrowers, you need to indicate that you understand the obstacles they face and that you work with commercial mortgage lenders who can provide them with the financing they need to achieve their business goals.
Likewise, you need to convince referral sources you can assist their clients in order to receive repeat business. Don’t sell yourself. Instead, sell the advantages your services will provide them. The relationships you build with other industry professionals will determine a lot of your success as a commercial broker, so be sure to make a good impression and establish your credibility early on.
A big part of attracting and securing commercial mortgage leads is communicating your skills in a way that proves your value. Potential borrowers should be your first concern when developing content for your marketing materials, social media channels, email blasts and website.
Focus on the needs and concerns of small-business owners who don’t have access to bank financing. Teach them about the industry. Provide them with helpful information about the commercial lending process. Let them know you are a trustworthy resource with the necessary connections to provide them with all types and sizes of commercial mortgages.
Your digital presence is important, but it’s also a great idea to head to the local businesses in your area to chat with the property owners. Updating your social media channels daily and sending regular emails will help you to develop leads, but nothing beats a face-to-face connection when possible. Head to a local deli or daycare; visit the auto-body shop around the corner from your office or the bakery by your home. Come prepared with some literature about how your services could benefit their businesses.
When it comes to referral sources, consistent communication is crucial to maintaining the relationship. Schedule meet-ups or calls so that your sources can update you on their businesses and discuss the clients who may need the services of a commercial mortgage broker.
Take advantage of technology and send referral sources emails regularly to keep them informed of the loans you’ve closed recently and to provide them with helpful resources for their clients. Connect with them on LinkedIn and post status updates frequently. Be sure to comment on any successful transactions that they mention in their posts.
• • •
A healthy pipeline of prospective deals is a major component of any broker’s consistent success, and quality commercial mortgage leads are essential to keep that pipeline full. In order to acquire these leads you need to reach out in the right way to the right people.
Understanding the needs of your referral network and potential borrowers and communicating with them consistently will allow your pipeline to thrive. Developing partnerships with experienced commercial mortgage lenders and understanding where to find the deals they will fund can increase the number of loans you close each year and allow you to earn additional income.
A version of this article was originally published in the March 2017 commercial edition of Scotsman Guide.