MORTGAGE BROKERS: SHOULD YOU BE A GENERALIST OR A SPECIALIST?

The brokers that bring us loans can be classified as either specialist, i.e., the specialize in a specific industry type, like gas stations, mobile home parks, industrial, etc., or loan types, like hard money, SBA, etc. Or, they’re generalists, working a broad spectrum of property, loan and borrower types. My gut instinct told me that specialists were more successful, I held the belief that the broker with a deep knowledge, and extensive contacts in a specific niche, would handily out perform the broker who tried to cover the entire field of commercial loans. I blogged about my feeling on this. I decided to study exactly which brokers have brought us the most transactions we financed. I have made over 600 commercial private hard money loans since 2001, and since over 90% have come from mortgage brokers, I have a pretty extensive data base on which to base my analysis. So, I’m here to tell you that my gut feeling was wrong! It seems that the transactions we financed were brought to us by specialists and generalist mortgage brokers in approximately equal numbers. So something else must account for mortgage broker success. I will discuss what I believe the difference makers are in the next blog.