Commercial Loans Blog

Marketing Leverage for Commercial Real Estate Loans

Posted by George Blackburne on Mon, Sep 29, 2008

Advertise to Companies Who Are Spending Big Money to Market for Mortgages

If you're a commercial mortgage broker, you probably need more leads on borrowers seeking commercial loans. Eventually you will discover that marketing directly to the public for commercial real estate loans just doesn't work. If you send out 10,000 mail pieces, you'll usually only get around six leads and no closings.

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So what does work? Residential mortgage brokers can be a wonderful source of referrals. Just pay them 20% of your loan fee in return for a name and telephone number of a prospective commercial real estate loan borrower.

Here's why advertising to residential mortgage brokers is so effective. The typical residential mortgage broker spends about $400 per month on some form of advertising - perhaps a small classifed ad in the Money to Loan section of the newspaper, a big Yellow Pages ad or a display ad in the Pennysaver or similar free grocery store magazine.

This advertisment by the residential mortgage broker probably reaches thousands of potential borrowers every month. Now if this residential mortgage broker is giving you all of his commercial loan referrals, this means that with a single $1 mail piece to the mortgage broker, you are reaching thousands of potential borrowers.

If the residential mortgage broker is spending $400 per month, then your $1 mail piece is getting leveraged by a whopping 400 times. This is marketing leverage.

Do you need to place a commercial real estate loan right now? You can submit your commercial real estate loan to 750 different commercial mortgage lenders in just four minutes using the C-Loans Commercial Mortgage Lender Portal.

Topics: commercial real estate loan, commercial loan, marketing leverage, commercial marketing, referral fees, commercial financing, commercial mortgage

Commercial Financing in a Recession

Posted by George Blackburne on Tue, Sep 23, 2008

Auto Repair is Hot and Retail is Not

I recently spoke on commercial real estate loan matters at the National Association of Mortgage Brokers Annual Conference in New Orleans. While at the conference, I wandered through the exhibit room and brain-stormed with the exhibitors.

Not surpisingly, commercial real estate lending was way down. Commercial lenders had scaled back their appetite for retail properties.

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But one asset class was hot - of all things, auto repair! Apparently some of the larger commercial lenders had noticed that the best performing class of commercial properties in their portfolios was in fact auto repair. It makes sense. Americans are not buying new cars right now but are rather just repairing their existing cars.

One lender with whom I spoke had actually raised its loan-to-value ratios on auto repair loans from 65% to 75%, in order to encourage more commercial loan applications on such properties.

Do you need a commercial loan? You can apply to 750 commercial lenders in just four minutes using And C-Loans is free!

Topics: commercial real estate loan, commercial loan, auto repair loan, commercial financing, commercial mortgage

Commercial Real Estate Loans and Lehman Brothers

Posted by George Blackburne on Mon, Sep 15, 2008

The Commercial Loans They Made Were Darned Good

Lehman Brothers got screwed. They filed for bankruptcy today because foolish regulators forced Lehman Brothers to mark the commercial real estate loans in their portfolio to market. Because the market for subprime commercial loans has completely frozen up, Lehman Brothers became insolvent.

It's a darned shame. For the last seven years my commercial mortgage company, Blackburne & Brown Mortgage Company, Inc., has been competing against Lehman Brothers for small, subprime commercial loans. Since their rates were better than ours, Lehman Brothers was able to cream the market for the best quality subprime commercial loans. I never knew them to make a foolish loan.

When the dust all settles and Lehman's assets are scattered to the four winds, history will show that this was a darned fine portfolio. They were earning around 9.5% on a portfolio of commercial first mortgage loans with an average loan-to-value ratio of 68% to borrowers with fairly decent credit. An investor could buy that entire portfolio at par and beat the pants off of most competing investments. These were not high-LTV loans to flakey borrowers on grossly over-valued homes. These are darned good assets.

If anyone wants to sell a portfolio of Lehman's subprime commercial loans, Blackburne & Brown is definitely a buyer. Please contact me, George Blackburne, immediately.

Need a commercial real estate loan? You can apply to hundreds of banks and subprime commercial real estate lenders in just four minutes using And C-Loans is free!

Topics: commercial real estate loan, commercial loan, Lehman Brothers, subprime, commercial mortgage