5. Taking on the complicated "cause" loan. This is the loan in which you have a borrower who has a "good story." Even if you really want to help, be careful when agreeing to take on one of these loans. A good story (e.g., divorce or sickness) may be a justifiable circumstance, but lenders don't always see it that way. You will have to work especially hard to make your borrower's case. You don't want to have to face the repercussions of creating false hope. So be sure that you believe that with enough effort, the loan really does have a chance.

4. Taking on the weak-business-plan loan. A borrower might have a great idea and be ready to set the world on fire, but without sound financials and a solid business plan, the loan won't fly. Borrowers should have a minimum of 10 percent of their own money to finance a project. Full financing simply doesn't exist, even with the best ideas and most-thorough paperwork.

3. Not knowing when to let go. If a deal has died with a lender, it probably did so for good reason. It's OK to question it or to try a second opinion, but know when to quit. Often it just wasn't a solid deal from the start.

2. Not knowing your borrower or the loan well enough. Be certain you have a handle on your borrower and the loan before submitting it to your wholesaler. You will lose credibility with your lenders if you consistently submit junk. This will affect their response time and could even affect pricing. Know your borrower's credit, the property type, the financials, the cash flow, etc. Submit only what the lender requests, nothing more and nothing less. A busy wholesale rep who already has several loans to process does not want to deal with a 50-page fax of nonsense. You must make it easy for the lender to turn the loan around quickly.

1. Trying to be everything to everyone. Pick a niche and stick to it. There are many loan scenarios out there, from the U.S. Small Business Administration to construction to stated-income/stated-asset. By sticking to a particular niche, you will become an expert in that field and will limit your number of lenders. You will eventually create an important collaboration with your wholesalers. This can lead to better pricing, perks and higher commissions.

Christopher Perez is the director of Commercial Loan Consultants, a national commercial-loan-placement firm. He advises more than 800 residential brokers nationwide. In addition, he provides a comprehensive training program for residential brokers looking to branch out into commercial-loan origination. Contact him at (877) 473-6984, e-mail clcloans@comcast.net or visit www.clcloans.net.

Page: 1 2 Previous