You're a commercial real estate broker. Your best Idaho client owns a commercial property in Louisiana, and he has a $700,000 balloon payment coming due on it. He wants you - the guy who handles all of his commercial real estate matters - to find a commercial lender willing to make a commercial loan on this Louisiana strip center. Basically he wants you to play mortgage broker.
Are you allowed to work as a commercial mortgage broker in Louisiana? Do you need a Louisiana mortgage broker's license? Hmmm.
You do a little magic on Google and locate the Louisiana mortgage licensing statutes. The statute in question reads roughly as follows: "In order to broker mortgage loans in Louisiana, the broker must have a Louisiana mortgage broker's license." Well, that settles that. Dang! Your good client is gonna be ticked, and you could have used a quick and easy $7,000 commission - one point on a $700,000 new commercial loan.
But wait! If you order now... On a hunch, you look up the definition of a "mortgage loan" in the Louisiana statutes. The statute reads roughly as follows, "A mortgage loan is a loan on a one-to-four family dwelling." In other words, a "mortgage loan" is loan on a house, duplex, triplex, or four-plex. The property that you are trying to finance is a strip center. The Louisiana mortgage licensing statute does not apply. You can broker commercial loans there all day long there without any licensing concerns, even though you reside in Idaho. Hooray!
This licensing scheme is very common across the United States. The mortgage loan licensing statutes will require a mortgage broker's license to broker "mortgage loans", but then a "mortgage loan" in that state is defined as a loan on a one-to-four family dwelling.
You may have noticed that I used the word, "scheme", above. When most people think of the word, "scheme", they think of something evil, like a scheme to defraud or a scheme to embezzle. In the law, however, scheme means a large-scale systematic plan or arrangement for attaining some particular object or putting a particular idea into effect. An example would be a clever marketing scheme.
Back to whether most states require a mortgage broker's license to broker commercial loans, the answer is, "No!" More than forty states have no licensing requirement at all to broker commercial loans.
Many of the remaining states are unlikely to get their panties in a bunch if you broker only the occasional commercial loan in their state. For example, if the Idaho commercial real estate broker above happened to have another Idaho client who owned a property in Nevada, the State of Nevada is unlikely unloose the hounds of hell on him for brokering one or two loans per year in Nevada, even though Nevada is one of the few states that does require a license to broker commercial loans. Now if the Idaho commercial real estate broker started sending out fliers to borrowers in Nevada, the State would likely consider the broker to be in violation of the law.
Several paragraphs ago I used the expression, "clever marketing scheme". I believe that every commercial real estate office (realty sales office) should have a commercial mortgage brokerage desk. Why? There is no easier way to meet accredited investors than to be in the commercial mortgage business. Almost every borrower you meet is accredited. After all, poor people don't own office buildings and shopping centers.
Just look at my own organization. Between C-Loans.com, CommercialMortgage.com, and Blackburne & Sons Realty Capital Corporation (private money permanent loans in the Heartland), we meet a half-dozen new accredited investors every day. We then eventually take many of these private clients and convert them into trust deed investors. It makes sense. Just about all wealthy real estate investors have cash set aside in their IRA's pension plans, college savings plans, and personal savings that are ideal for investing in 9% commercial first trust deeds.
As a realty sales broker, you could sell commercial real estate to your own set of accredited commercial mortgage borrowers. You've gotta start your own commercial mortgage brokerage desk in your office. It's easy to do. Start by ordering my famous nine-hour video course, How To Broker Commercial Loans.
Those of you who are not now practicing commercial mortgage brokers, as they say in the cop shows, "We're done here." But those of you who are mortgage brokers, we need to have a serious conversation. Please continue on.
Let's suppose you run across a do-able commercial real estate loan request. Do you try to broker the deal to a bank that you know, or do you enter the deal into C-Loans.com? The smart answer is that you do both!
First of all, you get prizes if you enter a bona fide commercial loan into C-Loans.com. You get to choose TWO of the following: (1) Free regional copy of The Blackburne List containing more than 750 commercial lenders; (2) Free Commercial Mortgage Underwriting Manual (sells for $199); (3) Free commercial mortgage marketing course (the PDF to our $199 audio course); or (4) Free copy of my commercial mortgage broker fee agreement. Contact Tom Blackburne at 574-210-6686 after you have submitted your deal to six banks to get your prizes.
You get your choice of two of the above, just for entering that commercial loan into C-Loans.com. And you can still submit the deal as well to your favorite bank. Our banks will simply compete against your bank.
"But George, I am afraid that someone will steal my lead if I post it on C-Loans." Then simply disguise the street address and borrower's name with the words, "To be disclosed later."
We still have not gotten to the most important reason for entering your commercial loan into C-Loans.com. You might actually close the deal! Oh my gosh, if you can close two commercial loans using C-Loans, your income will skyrocket because we will let you start buying our commercial leads, even if you are otherwise unqualified.
We sell our commercial leads for only $1 to $9 apiece, plus 37.5 bps. when the deal closes. Its a helluva deal. The only bad news is that we now require that you have a credit score of at least 700 and a net worth of over $700,00 in order to buy our leads. Too many dishonest and/or poor mortgage brokers were not notifying and paying us when they closed our deals. By the way, our own income skyrocketed within three months of imposing these tougher lead-buying standards.
Les Agisim, a mortgage broker not much different from you, has closed 51 commercial loans for C-Loans. Jason Bengert has closed more than 40 loans for C-Loans, and so has Rick Gnafakis. Paul Elis of PMB Capital is another big closer and a member of the Over-40 Closings Club.
Do you know why they are closing so many deals? They started out as lead buyers, and after 5 closings we listed them on C-Loans as a Proven Broker. Now they don't even have to pay upfront for leads. The leads arrive daily in their inboxes. (Advice: If given a choice between submitting your commercial loan to a sleepy, salaried banker on C-Loans and one of our Proven Brokers, choose the Proven Broker! They close deals.)
So I have a harsh truth: If you have a commercial loan and fail to enter it into C-Loans.com, its like failing to buy a $1 million lottery ticket when only ten tickets are being sold. If you could close just two loans using C-Loans, you could start buying leads. Then, like Sheldon Sontag, you could get listed on C-Loans. A half-dozen pre-screened commercial leads would appear magically in your email box every day for the next thirty years. Most people don't realize that we have already been in business for almost forty years, and my two 30+ year-old sons and our executive staff will carry on after I retire.
All of these wonderful things will happen if you simply start entering all of your commercial loans into C-Loans.com.