5 Ways Commercial Mortgage Brokers Add Value. What are you offering?
In our recent post entitled Financing Your Commercial Real Estate. Six Reasons to Use a Commercial Mortgage Broker, we summarized the 6 benefits from an investors perspective.
Lets turn the table. Consider the value that you, as a Broker, add to the financing discussion.
I was an institutional Lender for many years. I had the pleasure of meeting many real estate investors. All required some amount of financing to assist them in their wealth creation journey. Why then did so many of these investors struggle? Why could they not present their investment opportunities in a manner that would maximize their success?
What is your Value Proposition?
Were these investors ill informed or unintelligent. No, to the contrary, most were successful investors and astute business people. What they lacked was the knowledge. The knowledge to present their investment opportunities to lenders in a manner that would ensure a quick response. And to provide them with the most advantageous loan terms and conditions.
Your “value add” is the ability to save your client considerable time, money, and possible disappointment. At the risk of sounding repetitive, you bring knowledge. Focus the discussion on the clients needs, and your ability to deliver. The experience you’ve developed, the contacts you’ve made, the understanding you have acquired, and the ability to professionally present the investor opportunity, make you an invaluable solutions provider.
5 Ways to Leverage Your Knowledge
How do you leverage your knowledge to benefit your client?
- You understand that Lender requirements are ever changing. You’re up-to-date on lender policies and procedures. You know the market participants, and what asset classes they prefer.
- Monitoring and measuring real estate risk is critical for your lender. You know how to present your clients opportunity in a manner that mitigates their concerns. Understand and present Break-Even rent, Break-Even rate, and roll-over risk analysis.
- Real Estate cycles and both macro and micro economic influences are well understood. The market dynamics are clear to you. Trends and outlooks are well understood.
- You understand Real Estate fundamentals. You can confidently speak to the condition of your clients property, its strategic location, and how it offers a competitive advantage. Why? Because the property’s ability to attract and retain quality tenants is key to generating and maintaining occupancy and income. You know this and can present the case convincingly. You know in advance of your lender discussion, whether there are any possible detrimental environmental influences.
- The lender needs to develop comfort on both the quality of the real estate, as well as the borrower’s ability to pay. Underwriting processes are well understood. You recognize that property and borrower underwriting go hand in hand in a Lender’s assessment.
Your leveraging your knowledge, and that’s key to securing financing solutions, and developing profitable and ongoing business and referrals.