Some of you will recognize my name from some of the other forums, so plese don't think that I am soliciting. I, by chance, met a commercial loan officer who is involved in a start-up project in the so-cal area. He invited me to an orientation that I went to this morning. From what little I grasped from the meeting, he has a bank that will commercial loans up to 1.5 million and under-write them as under residential underwritting criteria. He wants me to come on board and start originating, but it's a big step into the unknown if you ask me. He has a lot of experience in that end of the industry, and he says that in the area I am in I would be expected to do 1.0 million a month in origination or I will be kicked from the program. It is basically a 52 week training course where he will accompany me on all appointments and 3 hours a week thorough traning. He has implied that IF you do 1.0 million a month you will make approximately $300,000.00 a year in commissions. But do you think that this "niche" product could sustain the volume expected? Is it something that commercial real estate agent would utilize? Obviously there would a less strict guideline for underwritting by going to resi underwrittter. The person also said that between 30-50% of commercial loans applied for get declinned, is this true? Thanks for any input that you offer, I appreciate it.

I have a few sources that will underwrite a commercial property with residential criteria and the rates are around 9% or more. Thats going to be a tough sell because commercial properties in CA already have a cash flow problem without a significant downpayment. Its much more difficult to close commercial deals consistantly in my experience. Its more likely you will close $3 mil in one month then not close anything for a few months. Finally, I would estimate that 30% -50% of people who WANT a commercial loan get declined. Your job would be to qualify them quickly so they dont waste your time.

Good advice, I am debating if I want to join the team because they are not offering any kind of base... maybe this seams normal to some, but in so-cal the average base salary for a commercial loan officer is about 90,000 a year. That would be awesome, but maybe this is how you have to start to break in to the industry. Is the average time between clossing about 90 days or so? It's a big jump and I have a little resi lending experience, but as I understand it commercial is a completely different language. Any advise as to books or classes to read/take would be appreciated.

So I recieved the compensation plan from the lender, let me know what you guys think. This is based on doing 2mil a month.

.75% = $180,000
over 6mil in production in a 1/4 = $10,000
over 25mil in production for the year = $25,000
Total $245,000

Is 2 million a month a lot of volume? Aaron, hopefully you can answer this. Also, there will be no base salary, and I think if a person believed that you had potential, they would give you a base. Would it violate anything to keep my affiliation with Tarbell and do this on the side? Man, kinda all over the place on this one, sorry.

Adam,
Aaron's comment is correct. In Commercial, if you average closing one loan a month, that's good. If you average closing two loans a month, that's Very Good. Like Aaron said, most likely you'll close a couple loans, then nothing again for a month or so. I know what program they are talking to you about. Good Niche Lender and you can make some money. I think their programs work best for Business Owners that own their Commercial Property. As Aaron said, for areas like yours in California, cashflows aren't there. In other parts of the country this Lenders Investment programs would work better.

As for base salaries, almost non existent in the Broker World. If you are looking for a good base, probably should be talking to a bank.

That's my 2 cents. Feel free to email me if I can help you out with anything.

All this guy is doing pimping Bayview company products. I bet he wants you to pay him a split too.

If this guy was doing anything major in commercial he would not just be slinging bayview product when there are other lenders out there that offer superior products to the same target market.

Your not going to fund 1 million a month doing small balance loans (average size is 150-300k). If you want to make 300K a year you need to work with investment bankers and projects that at 5 million plus.

I don't know what bayview is, but the lender is Silver hill financial, and I actually went on some appts this week and got a deal for 700,000. I don't understand the cash flow problems you guys are talking about, but the program relys on the principal's personal DTI. I met with a guy who owns an auto garage thing, kinda like a Jiffy lube, he removed the underground storage so there is no enviromental hazard, but he is getting 8.375 20/20 declinning fixed with a 618 mid. Is that competitive? Seriously guys, I don't really know what I am doing yet so if this dosen't make sense, let me know.

You are getting good advice on this board. You will close the size loans you market for. In terms of keeping you affiliation with your current company depends on the contract you are under with the new lender. I consult my borrowers on the best possible financing options. You may contact if I can aid you in any way.

I appreciate the advice, I have decided to run with the company and so far I have to say I am happy with it. I found out some things and am learning a lot! I think we have a great product and the best part is... PEOPLE ACTUALLY WANT TO TALK TO YOU when you cold call them! It's great! When I was a resi mortgage broker I got hung up on so many times that I started to take it personally and I think that was why I left that end of the industry. Anyway I appreciate everyones input. I have come across 2 solid deals, the first one is for 800k and the guy really needs the cash, the second one was for 600k, but I lost that one because he had personall friend that would loan to him at 5.0% for 15 years. The only cost was splitting the escrow. I don't think I will run accross that to many more times in my career though.

I am trying to place a commercial construction loan for 2.8 million. I've been in the residential mortg business but first time trying out commercial. Any advice on lenders who will do commercial construction loans??

lots of thanks.

I would suggest you check the Scotsman Guide, they have all kinds of lenders and their specialties. Give me some details and I may be able give some suggestions.