Commercial Magazine

Tom O’Rourke and Darrick Brown, Commercial Loan Broker Institute

Find and develop a niche that works well

By Neil Pierson

Whether you’re a veteran commercial mortgage broker or one who’s just getting started, the path toward professional success has probably involved — or likely will involve — a combination of education, marketing and niche funding sources for your clients.

Creating a strong niche may involve working with specific types of businesses, property types or loan products. Tom O’Rourke and Darrick Brown, two of the co-founders of Denver-based Alternative Funding Partners and the Commercial Loan Broker Institute, spoke with Scotsman Guide about the things brokers can do to find their sweet spot.

Explain what you do with Alternative Funding Partners and the Commercial Loan Broker Institute.

O’Rourke: Alternative Funding Partners is the brokerage side of the business. We are a commercial loan brokerage on a daily basis. … The Commercial Loan Broker Institute is the training side of the business. We have folks who come from throughout the U.S. and now from Canada, who spend a week with us here in Denver to get fantastic training on the industry, foundation, marketing and sales, pretty much all commercial loan products — commercial real estate, factoring, equipment, hard money, etc.

What kind of advice would you give to a broker for finding and establishing a niche market?

Brown: We get folks from different backgrounds, whether they’re former commercial real estate bankers, insurance agents — for some reason, we seem to get a lot more of those — so when we typically get people, they have been folks that are somehow related to the financial industry. So, that makes it really easy, relative to what we do and how we do it.

A good example of that is, we have one of our graduates in Chicago. He came from a really large equipment company, so he launched his [brokerage] business and, of course, what did he specialize in? Equipment. He also learned more about the commercial real estate side of it, as well as the factoring side, but his niche is definitely equipment because therein lies his experience.

What would you say to a seasoned broker who is looking to change their business model?

Brown: Another graduate [from Georgia] started out wanting to kind of do everything, so he was doing equipment, accounts receivable and then commercial real estate. After six months out, because we stay in touch with our folks and we continue to mentor them, he found that his niche was actually better in commercial real estate. So, now he focuses on multifamily housing and also churches. … He found a niche of not only working with alternative lenders but also local community banks, as well as more of the big-box banks. He has totally changed his whole website to say, “I do commercial real estate.”

O’Rourke: I think it’s all about leveraging where you are currently in your life cycle and your work stage. … It evolves. Everybody is unique. And one thing that we do every week, every Friday at noon, we hold a deal talk. We invite everybody who has gone through the [institute] training to get on the phone, share successes, failures, best practices, new lenders, opportunities, and additional strategies and tactics that others may incorporate into their business.

Being a commercial mortgage broker can be a data-intensive job, so what types of data do you think are especially useful?

Brown: From a data standpoint, we pull data from the RMA (Risk Management Association). We also use different publications that we get those guys to jump in on. We have refresher courses. And we also invite our direct-lender relationships. We do workshops with them, so they can jump on a call. … [We may be] having a conversation about, “Hey, we’ve got a new product rolling out. How does it work? What are all the components to it to be successful?” That way, [the brokers are] not running around chasing every deal. They’re actually looking for specific opportunities that fit in the boxes of the lenders that we all work with.

O’Rourke: I’d certainly echo all of that. … We tell folks that, especially in your local geography, because this is a trust and relationship business, you need to know what’s going on in your markets, and to be heavily involved in events that make sense.


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