To residential mortgage brokers, working with borrowers who need small-balance commercial mortgages might seem too complex. However, offering small-balance commercial mortgages to borrowers who can’t obtain traditional financing is a simple way to expand your product and increase your earnings. Here are some great reasons to get involved in this niche:
There are plenty of borrowers.
There are still many property owners who cannot obtain a bank loan for their business’s needs. These potential borrowers generally don’t know what to do if they’ve been turned down by their local bank and often need a broker who specializes in funding non-conforming commercial loans. Because the small-balance commercial mortgage market is under-served, you’ll have plenty of business coming your way without all of the competition you encounter in the residential business.
Closing is simple for the broker.
When you choose the right commercial lender to work with, closing small-balance commercial deals is easy. Some lenders just need you to submit your deal, and then they handle all of the processing and closing work. This frees you up to market your services as a broker and find new commercial deals.
You can earn extra income.
While there are regulations dictating what brokers can earn in the residential mortgage business, there are very few regulations on the commercial side. Closing the occasional small-balance commercial loan will allow you to add to your earnings as a broker without much additional work.
Passing up the occasional small-balance commercial mortgage is passing up the chance to expand your business and earn more income. It’s easy to add these types of mortgages to your product line without interfering with your usual residential business. Brokering small-balance commercial deals allows you to serve a largely neglected segment of the market while offering a service that benefits your growing business.