their market, including idiosyncrasies and regulatory demands.
Washington, D.C., for example, has a law known as the Tenant
Opportunity to Purchase Act (TOPA). A commercial mortgage broker
might have to know about TOPA when closing a deal on an
apartment complex of five or more units. This law can completely change the risk profile of a deal because it allows
tenants an opportunity to purchase a property before
a landlord can sell it. Every market has its own unique
characteristics and the more a commercial mortgage
broker understands these wrinkles, the more they
can help a lender navigate them.
Understand the transaction
Next, a broker can present lenders with multiple financing options. The best brokers are technically competent. They put together multiple
types of deals. Lenders love to see this, so
know your options and bring them to the negotiation table. In short, act like a structuring
agent, not just a number taker.
The best mortgage brokers also understand
their clients. They develop close relationships with borrowers. At the very least, they
converse with a borrower before bringing a
deal to the table. In a broader sense, the best
brokers do their homework upfront. They take
the time to understand a transaction. They
dig into the minutiae. They expand, divide
and analyze the deal. They identify and solve
The exact information a broker should know
and share changes from deal to deal. But the
best brokers always provide relevant information on the strengths and weaknesses of the
deal, as well as the borrower, to their lender.
This takes time, and the truly knowledgeable commercial mortgage brokers do not
jump at closing the deal. They do not simply
send deals to lenders via e-mail. First, they
will get the lender on the phone. They will
provide the aforementioned information.
They’ll ask the lender’s opinion about the
deal before officially pitching it. And when
the lender asks them questions, the broker
either has the answers or agrees to find
Lawrence S. Brown is the CEO of Evergreen
Private Finance and has more than 20 years
of experience in growing highly successful
specialty finance and investment companies.
He also has acquired, managed and sold real
estate in the Washington, D.C., metro area.
He is a venture-capital investor and a limited member
of Centripetal Capital. As a noted entrepreneur, he has
structured and financed more $2 billion
in loan products across multiple asset
classes. Reach Brown at 301-928-5750 or
Finally, lenders love brokers who demonstrate integrity. The worst thing you
can do that will ruin a deal — and the chances of developing a long-term relationship with a lender — is to hide something. Lenders can work with
bad facts. But they can’t work with bad facts a mortgage broker
does not disclose. If a lender puts 10 hours into a deal and finds
out the borrower has a bankruptcy that wasn’t disclosed
upfront, the lender will not approve the loan, and they
will be unlikely to consider another deal from that
There are other ways to add value to a transaction.
But these are the fundamentals. The commercial
mortgage brokers who do not put these steps
into practice are ones that lenders choose not to
work with. But brokers who do close deals and
develop long-term relationships with lenders
adhere to enough of these fundamentals to
stand out and instill confidence.
An individual lender may be small, operate in
one market and have a limited perspective.
Even the smallest lending companies, however,
normally can distill some universal principles
that matter when it comes to working with
commercial mortgage brokers. Lenders and
brokers should talk to each other. By starting
a conversation, both parties can increase their
shared understanding of how to mutually
thrive in today’s markets. n
“Lenders can work with bad facts.
But they can’t work with bad facts a broker
does not disclose.”
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