Effective Networking & Marketing Strategies for Commercial Loan Brokers

Whether you are new(er) to the commercial loan brokerage business, or somewhat seasoned, in this article you can find marketing methods for expanding and strengthening your business. While the strategies below lean towards those doing commercial mortgage loans, there are tactics here that will work for other loan brokers. 

First, we will start with the foundation needed for your business — what product area you will focus on to build your ability quickly and establish yourself as an expert to those you contact. The second part of your foundation are the tools necessary for modern marketing and building consistent relationships. With a solid foundation built, networking outreach is more effective and performing well for your customers is far easier.

Here is the outline, and the steps to launch you to success.

• Build Your Foundation

  • Find a niche or establish what you do NOT do so you can compete on ability, not price.

  • Establish a quality CRM database.

  • Create a quality website with a blog to document the deals you do.

  • Set up the email marketing tool and your social presence.

• Network Building

  • Marketing to real estate agents doing CRE in tertiary markets.

  • Networking with real estate investors.

Foundation Part 1: Find a Niche (or Establish What You Do Not Do)

When starting out in the loan brokerage business, it seems common sense to spread a wide net with an "I can do everything" approach. It can be tempting to accept any potential client that comes your way. After all, accepting a wide range of customers and business seems to make the most sense when you're building a successful loan broker business, right? Not really.

It's important to understand that the riches are in the niches, and as cliché as that statement is, it's very true in marketing. Finding a specific niche or area of loan brokerage that you specialize in will be the key to your success. While it seems counterintuitive to not expand your business, it's more effective to focus on a specific area where you can become an expert.

Establishing what you don't do is just as important as finding your niche. As a commercial mortgage broker, you probably shouldn't be doing home mortgages. Instead, it's best to pass those on to a quality residential mortgage broker referral partner who can handle those types of loans more efficiently and pass you commercial opportunities back. By declining home mortgages and focusing solely on commercial real estate, you'll be able to become a specialist in that area and be able to offer your clients the expertise they need.

You might be thinking about offering leasing, merchant cash advance products or business loans, as those are in the realm of commercial lending products. There is a lot of opportunity in those products. However, there are still significant differences between those and commercial real estate mortgage. If you want to be seen as an expert, pick one area. As with home mortgages, if you choose the commercial real estate mortgage path, find a reliable referral partner who specializes in non-mortgage commercial lending products to work together with.

By establishing what you don't do up front, you will avoid wasting time on things that are outside your area of expertise. Rather than trying to be everything to everyone, you'll be able to focus on your area of expertise and offer your clients exceptional service. That goes for the lenders you work with as well, who appreciate working with loan brokers who are experts in their area.

In addition, with a niche or area of expertise, you can better market yourself to potential clients. With a clear understanding of what you specialize in, you can cater to a specific target market and effectively market your services to that market.

If you have been at this for a while and you have a broad offering, niching down can be painful. Use the old 80/20 rule to help guide you. Keep the products producing more of your profits or where you are seeing higher volumes. Getting rid of the others can result in a short-term revenue reduction, but the long-term benefit will far outweigh this.

Put yourselves on the other side for a moment and think about people you have met when at networking events. Who sticks out in your mind more, the specialists in your network, or the generalists for whom you can't quite put your finger on what they do well? And when someone asks you for a referral or "do you know someone who..." — it's those specialists who are experts in their area that have mindshare.

“Finding a specific niche or area of loan brokerage that you specialize in will be the key to your success.”

Compete on Ability, Not Price

The niche you choose and the expertise you build in that area will allow you avoid competing on price. In the world of commercial loans, especially commercial real estate lending, ability to perform is paramount. Your focus on a niche will allow you to increase your ability quickly and avoid being the dollar store of loans.

Just say no. In the beginning, it could be tempting to say yes to every deal, no matter how you need to cut your fee. However, establish from the beginning with customers and referral partners, such as real estate brokers, that there is a cost for the expertise you bring, the quality work you do and the ability to perform and close loans.

In fact, it tends to be the borrowers who complained about pricing and threatened to go somewhere else if the price wasn't lowered who end up taking the most effort and cause the most problems. Explain the value you bring has a cost, and if they don't get it, quickly say no. Move on to build relationships with those who do understand.

“Your focus on a niche will allow you to increase your ability quickly and avoid being the dollar store of loans.”

Private Money Bridge Loans Are a Key to Differentiation

If you have chosen to focus on commercial mortgage brokering, then let's explore an area where can you differentiate yourself: private money bridge loans.

These loans are short-term financing solutions that are customized to meet the immediate funding needs of commercial real estate investors, developers and even business owners. Although these loans come with higher costs, interest rates and shorter terms, they are a lucrative specialty market for commercial mortgage brokers seeking to set themselves apart from the competition.

By specializing in private money bridge loans, you can concentrate solving financing challenges that banks and other traditional long-term lenders cannot. You can close the sale that a commercial real estate broker couldn't seem to get done. You can help a real estate investor build a portfolio faster and grab those profitable value-add opportunities. This ability gives you a foot in the door with those you meet.

“Bridge loans are a lucrative specialty market for commercial mortgage brokers seeking to set themselves apart from the competition.”

Understand the Exits

No one wants to be stuck in a high-cost loan. Understanding the roadmap and exits from private money bridge loans is crucial. Therefore, working with your borrower to plan out the exit strategy to long-term financing is important in two major ways.

First, brokers who effectively communicate their exit strategy to borrowers build trust and establish themselves as reliable partners. By working with the borrower on the plan to move out of the private money loan as quickly and efficiently as possible, you help alleviate concerns the borrower may have about the loan. This plan may encompass helping your borrower understand exactly what will be required for the refinance, such as renovation, debt service coverage ratio (DSCR) level, occupancy minimums and when those things need to happen. This plan and the associated timeline also gives you a reason to keep in touch with your borrower to see how things are progressing. This all leads to higher levels of borrower satisfaction and positive reviews, which can lead to increased referral business.

Another benefit of having a solid exit strategy is it leads to higher commission earnings for brokers and a growing loan pipeline. You make money on the bridge loan and you have the refinance already lined up, where you will make commission again. Leading up to the refinance, when things are going well, many real estate investors are already exited to talk about the next deal after refinance, building that pipeline of long-term business.

“Work with your borrower to plan out the exit strategy to long-term financing.”

Foundation Part 2: The Tools

Build a Quality CRM Database

In today's competitive business landscape, it is essential to build and maintain a quality customer relationship management (CRM) database to effectively track and follow-up with potential and current borrowers, partners, lenders, and others essential to your business.

The unfortunate fact is the number of commercial mortgage brokers who, after doing a short-term bridge loan for a borrower, not only didn't keep in contact on the progress of the stabilization required for long-term financing, but didn't even contact the borrower near the maturity date to start work on a refinance. One of the wonderful benefits of doing commercial loan brokering is working with borrowers who need your expertise far more often than in residential mortgage. CRM enables you to set follow-up dates to pick up the phone and call your borrower, keeping your borrower happy and your pipeline full of profitable loans.

Choosing which CRM to go with may seem daunting, but not having one that you use every day, multiple times per day, will put you at a significant disadvantage. Before you start your process of choosing a CRM, write down the must haves, nice to haves and even the don't wants. Then, start your selection process. A CRM should above all be something you are able to use; in other words, don't be sucked in by a long list of functions that are not part of your needs list and only add complexity.

There are quite a few mortgage industry specific CRMs out there. While worth a look, note that these may be focused on residential mortgage broker needs. Don't limit yourself just to "loan broker" CRMs.

“Having a Customer Relationship Management (CRM) database allows you to effectively track and follow-up with potential and current borrowers, partners, lenders, and others essential to your business. ”

Create a Quality Website

Creating a quality website is essential for commercial mortgage brokers who want to establish trust with potential clients and referral partners. A professional, well-designed website goes a long way in creating a positive first impression. It not only provides information about your loan brokerage business and services, but also showcases your expertise.

You don't have to spend a fortune on a custom-built website. Off-the-shelf solutions like WordPress, Squarespace or Wix can help you create a functional, visually appealing website that meets your needs and budget. These platforms offer different templates and designs that you can customize to your liking.

“A quality website is essential for commercial mortgage brokers who want to establish trust with potential clients and referral partners.”

Document the Deals on Your Website or Blog

In addition to a user-friendly design, your website should also incorporate a blog. Your blog serves as a platform for creating and sharing informative content that establishes you as an authority in your niche and demonstrates your knowledge and expertise.

Don't know what to write about or don't really enjoy writing? That's not really a problem. To stand out as a commercial mortgage broker, you don't need to post more bland content that simply explains the mortgage process. Instead, what is better and easier is showing potential clients what you're truly capable of by documenting the deals you have successfully closed.

By showcasing the more challenging and complex deals you have completed, you can demonstrate your expertise and give potential clients a clear understanding of your capabilities. Whether it's a deal that required creative financing or one that involved navigating complex legal and financial issues, these examples can help potential clients understand how you can help them in their own unique situations.

Don't limit yourself to written blog posts, either. Consider creating video content that walks viewers through the process of how you tackled a challenging loan. This can be a powerful way to establish your expertise and provide potential clients with a firsthand look at what sets you apart from other mortgage brokers.

“Show potential clients what you’re truly capable of by documenting the deals you have successfully closed.”

Custom Domain with Email

Having your own customized domain for your website and email is crucial for establishing a professional online presence. While free email services like Gmail and Yahoo are useful for personal communication, they give potential customers and partners a less-than-professional impression of your business.

A custom domain for your website shows that you are committed to your business. It gives your website a professional look and helps to build trust with potential clients and partners. When someone visits your website, they are more likely to take you seriously if your domain matches your business name, rather than having a domain name that includes "blogger" or "wordpress" in the URL.

Similarly, a custom domain for your email is also essential for your professional image. It shows that you have invested in your business and take pride in providing quality services to your clients. It also makes it easier for people to find and remember your email address, rather than trying to remember a long string of letters and numbers associated with a free email service.

Moreover, having a custom email address also allows you to have more control over your digital identity. You can easily change your email hosting provider without having to change your email address. This means that you can maintain consistency in your email contacts list and avoid any disruptions to your communication channels.

“A custom domain for your website shows that you are committed to your business.”

Establish Yourself on Social Media Platforms

Establishing an online presence on social media platforms is becoming increasingly important for commercial mortgage brokers who want to stay competitive in today's digital landscape. The goal for you as a commercial loan broker is not using social media for primary marketing and outreach. The truth is that unless you have a dedicated social media team and a big budget, using social media as a primary marketing tool will only waste your time and resources. The goal of your presence on social media is to strengthen trust for clients you meet personally or are referred to you.

No mystery here on what to post, either. When you close a deal, post it with some description of how you overcame obstacles and solved your borrower's challenge. Many times, this will be in conjunction with a blog post or video you did for that loan.

To get the most out of social media marketing, it's important to identify the ideal social media platforms for your target audience. As a commercial loan broker your target is businesses and more specifically business owners. At the very least, create a LinkedIn page for your business. As with your website, quality is the goal, with a well written about, your logo or photo there and all the correct contact info filled out. Missing or wrong information gives potential clients the idea that you won't do quality work on their loan needs.

In addition to written content, consider creating videos about the loans you do. Create a presence on YouTube and Rumble and post the videos there, and on your blog.

“The goal of your presence on social media is to strengthen trust with clients you meet personally or who are referred to you.”

Setup Email Marketing

Email marketing can be a highly effective marketing strategy for commercial mortgage brokers who want to stay top-of-mind with past clients, prospects and referral partners such as real estate agents. By sending targeted and personalized emails to your contact lists, you can nurture relationships, showcase your expertise and generate new business opportunities.

To execute email marketing campaigns, your CRM is essential. In building an effective email list, add all prospect emails into your CRM and segment or tag based on the prospect role, e.g., real estate agent, real estate investor, business owner, title/escrow, etc.

The key to any successful email marketing campaign is creating engaging and relevant content that is personalized to the target audience. What you send should bring value to your recipients every time. When you document a new deal, send that out and make sure to mention the real estate agent, insurance agent or any others who were involved. People love to see their name, and this will lead to more business for you. When you close a loan for an owner-occupied business, with the borrower's permission, of course, highlight the business in your marketing.

“By sending targeted and personalized emails to your contact lists, you can nurture relationships, showcase your expertise and generate new business opportunities.”

Network Building

With a solid foundation, you are ready to start building your network. If you are a newer mortgage broker, find a niche that you will have a higher chance of success with.

Market to Real Estate Agents Doing CRE in Tertiary Markets

As a newer commercial mortgage broker, it will be challenging to gain referrals from established commercial real estate brokers who work in larger markets. These brokers already have established relationships with commercial mortgage brokers and are unlikely to take a chance on a newer broker who they do not know. They do not want to risk losing their commission, or a client, due to a mortgage broker's inability to perform.

However, for real estate brokers working in smaller tertiary markets, and these can be just an hour outside a primary or secondary market, there likely are not many commercial mortgage brokers marketing to them. This creates an opportunity for newer loan brokers to establish relationships and market their services. By positioning yourself as a reliable and knowledgeable source of financing solutions, you can effectively build relationships with these real estate brokers and earn their trust.

Tertiary market real estate brokers may only work with local banks or credit unions that do not offer loans on challenging properties or borrowers. This creates an opportunity for you to offer a private bridge lending solution and close a deal for a real estate broker that they thought couldn't be done. By helping real estate brokers earn money on deals they may have otherwise lost, they will be more likely refer more clients.

“Position yourself as a reliable and knowledgeable source of financing solutions so you can effectively build relationships with real estate brokers and earn their trust.”

Cultivating Real Estate Agent Relationships

One way to find real estate brokers doing commercial deals in smaller tertiary markets is by contacting local title and escrow companies to see who has closed commercial property sales recently. Once you have a list of real estate brokers, it's time to reach out and start building relationships.

While you might think a mass market approach will yield better results and be tempted by spam emails trying to sell you lists of agents, just don't. The commercial real estate industry, especially in tertiary markets, is highly relationship driven. Fortunately, most commercial real estate brokers are out and about at events and involved in community affairs to generate business for themselves. That works in your favor in finding ways to meet them.

The first step could be to introduce yourself via a phone call or email as finding contact information for real estate agents is easy. After mentioning who referred you, your pitch is simple, you specialize in bridge loans and finding solutions for challenging properties and borrowers. Say something like, "What can I help you close that has been challenging to get done?"

Once you have introduced yourself, it's essential to listen to the real estate broker's needs and challenges. Next, arrange a time for an in-person meeting. Whether that is a coffee, a look at a property together or meeting up at the next community event, there is nothing that is more effective in building trust quickly that face-to-face time.

Be prepared that, at that time you reach, out there may be nothing for you. Ask directly, "would you object to my reaching back out in a couple months?" And then set that timer within your CRM to remind you.

“It’s essential to listen to the real estate broker’s needs and challenges.”

Networking with Real Estate Investors

In addition to building relationships with real estate brokers, you should also network directly with real estate investors. Real estate investors are often looking for financing solutions for their challenges and the right mortgage broker can provide those solutions.

Even in tertiary markets, there can be a lively local real estate investment community. These events are a great way to get your name out there and build relationships with people who need your services. While many of the investors may be more focused on fix-n-flip, you can be the bridge to their first commercial deal, pun intended!

“Real estate investors are often looking for financing solutions for their challenges, and the right mortgage broker can provide those solutions.”

A Solid Foundation and Strong Building

Start first on a solid foundation of a focused niche and the set of tools you need. With your solid foundation built, then build your networking outreach. Cultivate relationships based on quality and education. Building relationships with real estate brokers and investors takes time and effort. There are no shortcuts here. However, the long-term results in building your network will pay off handsomely with a fat pipeline of loans stretching through the future, even in challenging times.