continued from Page 32
can be very
there is a high
a network of
So, what happens when you run across flaws in
your client’s deal? You may think it’s easier to gloss
over flaws and let the lender discover them in their
due-diligence process. That is, after all, what underwriting is for, right?
Wrong. Hiding any issues with a borrower’s deal can
ultimately prolong the origination process or, in some
cases, kill the deal entirely. At the very least, hiding
blemishes on a borrower’s file can interfere with the
lender providing correct loan terms.
Honesty really is the best policy, so be direct with
your lender about any flaws in your client’s deal. Also,
be understanding of any concerns the lender or your
client may have going into the deal. This will allow you
to articulate any concerns between all involved parties, and thereby arrive at a faster resolution.
Mortgage brokers have a crucial role in the commercial
real estate lending industry. Being a liaison between
clients and lenders is not an easy task, so it makes sense
that compensation is usually one of the first points of
discussion when initiating a transaction. You’ll want to
ensure the legwork is worth it.
When approaching a discussion of fees, however, it
is important to make sure you are asking for a reasonable amount. As a commercial mortgage broker, private
lending can be very lucrative because there is a high
likelihood that you’ll develop a network of repeat clients.
Unfortunately, lenders often witness brokers lose out
on repeat business because they charge customers too
much money off the bat. You should never put a deal in
jeopardy because the fee is too high.
Be willing to openly discuss compensation with
lenders, because most good ones will give you guidance on an appropriate amount to charge a borrower based on the specific deal. A strong private lender
wants to see brokers succeed and be satisfied with
their income because, if that is the case, there is a
much higher likelihood of the broker bringing future
business back to the lender.
Ultimately, it all comes back to developing a strong
relationship with your clients and lenders. Once you’ve
successfully done that, the money will follow.
As you continue to plan for your business in 2018,
understand how the work you put into developing
relationships with private lenders and clients will pay
off. The most successful brokers add the most value
to each transaction by catering to both client and
In return, you can expect private lenders to reciprocate with benefits such as greater flexibility with
your clients, faster decisions and funding of deals,
more accurate pricing and even a steady stream of
referrals. These perks will keep you ahead of the
competition in your clients’ eyes and elevate your
business to the next level.
is managing director of
RCN Capital, a national direct private lender.
He is responsible for RCN’s day-to-day
operations, including sales-growth initia-
tives, underwriting review with compliance
oversight, and leadership of senior-level strategic planning.
Since joining the company in 2010, Tesch has helped develop
a national private-lending brand with the best practices and
transparent products for a diverse customer base.
He has underwritten more than 2,750 loans and
overseen more than $520 million in originations.
Reach Tesch at email@example.com.