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Introductions and Advice on Broker / Lender Partnerships
My partner and I are starting a loan brokerage in the NYC area. Our background is primarily in software, which we hope to use originate differentiated, high-quality deals.
We'd love to connect with NYC-based private lenders, but would appreciate the chance to talk with anyone on the lending side.
Specifically, we're trying to understand how the most sucessful Broker / Lender relationships function, and what they look for in a partner.
Thanks in advance for any thoughts or connections!
I own a brokerage and have worked with most of the largest hard money lenders in our space and at a high volume level. The one thing I always ask lenders is: Do you have a broker agreement? It is laughable how many don't and of those that do, they are not in your favor. I just simply will not work with a lender that will solicit my client, have no punitive language in regard to if they circumvent our firm or solicit them, and I want nothing to do with the lenders that want to directly face our client throughout the process. There is a lot of advice I can give, but start by offering only a few loan types and work with a select number of lenders until you know the ins and outs of the process. If you get enough loan volume to one lender, then you can start asking for a more efficient relationship. The biggest lenders are not going to prioritize someone sending a deal here and there. And lastly, you are only as good as the internal rep you get, don't be afraid to ask for someone better if your rep can hardly fog a mirror.
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Lender
- 407.900.8799
- http://www.thecapsource.com
- [email protected]
A good broker will know exactly what an acceptable loan smells like for a lender. Structured correctly, entity paperwork in line, we're sure about credit and liquidity, we have the title and insurance contacts, we have pic IDs. So essentially a good broker we'll get 75% of the materials upfront and if something is not right, the broker will tell the borrower what they need to do to get the loan accepted. Catch all the red flags prior to submission cause once you submit a file that has uncaught red flags, that's when your process slows and lender's get nit-picky.
From a lender, I want you to work fast, if I am hustling on my end to make it easy for their processor and underwriter then I expect fast work with an open line of communication and I want my rep at the lender to be able to fight for me or my clients should an obstacle arise - which they usually do.
Thank you both for the thoughtful responses.
One follow up question; what would be best way to start building relationships with local lenders? Are they typically willing to partner with new brokers, or do they require track record, etc.
Lenders have nothing to lose signing up a broker. They get paid zero until they bring a deal in. It's all commission based.
Quote from @Blake Williams:
Thank you both for the thoughtful responses.
One follow up question; what would be best way to start building relationships with local lenders? Are they typically willing to partner with new brokers, or do they require track record, etc.
They'll work with every broker, typically. As long as you provide what they require for on-boardng. I would not worry about if you are right for them, I would worry about whether they are right for you and your client. If something goes wrong, you'll wear the black eye, not the lender.
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Lender
- 407.900.8799
- http://www.thecapsource.com
- [email protected]