Commercial loan originators have questions. This mortgage mailbag has answers!
Whether it’s during a webinar presentation or a one-on-one call with a Silver Hill Regional Manager, brokers come to us with all sorts of interesting questions pertaining to the small-balance commercial mortgage industry.
We tend to get some questions more often than others – that’s why we’ve created this Commercial Mortgage Mailbag feature. Read on to see if we have an answer for your biggest question.
Can you provide any idea of suggested client gifts you’ve found to be appropriate and effective in the small-balance commercial mortgage space?
If you have ever taken a walk through the exhibition hall of a mortgage industry trade show or conferences, you’ve likely seen more than your fair share of giveaways. Pens, notepads, stress balls, and other small trinkets can quickly fill one’s pockets while walking from one conference session to another. But do these gifts have real value?
Before you place your next promo order, ask yourself one question: What objective are you hoping to accomplish?
If you want potential clients to remember you, your best bet may be to choose a useful gift that will always live near the recipient’s work station. Mouse pads, cell phone chargers, and wall calendars are all useful items that belong in an office or cubicle. By offering these types of giveaways, you can provide something of value that also serves as a daily reminder of your business.
On the other hand, if the objective of your giveaway is to thank a client for doing business with you, the best move may be to dial back the branding. Think about it: your client already knows you and your company – if you’ve provided great service, they won’t need any explicit reminder to help them choose you again. Instead, use this opportunity to give your client something they can enjoy outside of the office, like a basket of gourmet snacks or a planner/notebook set.
Once again, the less this aspect of your marketing focuses on YOU, the more value it can have when building client relationships.
How do I cross-sell commercial loans and improve my arsenal of products to sell?
One of the biggest draws of small-balance commercial mortgage lending for residential originators is the fact that they can take on commercial lending opportunities while still focusing primarily on closing home loans.
Originator may have also been told that they can identify potential commercial leads within their existing database of residential borrowers. But how?
The key is to pinpoint certain borrower traits – most of which can be found in 1003 files or other supporting documentation.
A good place to start is the REO section of the 1003 loan application your residential clients have completed in the past. There you’ll find a description of any commercial properties your clients own. Since commercial mortgages typically need to be refinanced every 5-7 years, you can assume that many of these borrowers are in need of a commercial lending solution. You can help them!
When it comes to promoting the “arsenal” of products you sell, try to talk less about what your product offering and more about the different ways you can help investors and business owners. Take a backseat and let your clients be the hero of your pitch – that will allow your message to cut through the clutter and resonate with your target audience.
Think about how this concept applies to the promotion of your closed loans. Instead of simply listing a deal’s main points in bullet format, try describing the unique issue your client was struggling with and the solution you were able to secure for them.
What information do you need from a client to vet a potential deal?
Every originator has their own system for qualifying borrowers, but there should be a common objective: to find the ideal lender solution for your client’s specific needs.
To do that, you’ll need to gain a deep understanding of the client’s financial history and commercial property in question. You’ll also need to be familiar with the different type of lenders that exist across the commercial mortgage spectrum – from traditional banks to hard money lenders.
The following list of qualifying questions is by means exhaustive, but it should provide a helpful starting point as you conduct your investigative work.
- What is the borrower’s motivation for financing?
- Is there an issue with the property or borrower that might limit the amount of lender options?
- What is the real estate type and current use of the property?
- How many units comprise the property and what is the occupancy level and tenant mix?
- What is the NOI (Net Operating Income)?
- What is the square footage?
- Does the property require rehab or repositioning?
- Do you have photos of the property or have you inspected the property?
- Was the property used previously for a use that may raise a concern for environmental issues?
- Is the property owner-occupied or an investment?
If you can answer these questions, you’re on the right track to finding an appropriate lender for the finance request.
Have a question you’d like us to answer in our next mailbag? Simply reach out to us at firstname.lastname@example.org or contact your Silver Hill Regional Manager today.