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THE LION TAMER'S STOOL
By Joel S. Pate
Happy New Year! The mortgage business has changed quite a bit over the past twelve months. Ask anyone that has been around this business for a decade if they have ever been through a change and they'll tell you, "Many."
The key to long term success in this industry is the development and implementation of a marketing plan that generates business for you to originate. That's it. It really is that simple.
The problem that most originators face can be expressed in the following analogy: A lion tamer uses a four legged stool and a whip when in the cage with the lion. Why? Well, to tell you the truth, I don't know the exact reason for the whip, but, the stool is there to project into the lion's face when the lion becomes too aggressive. This works, as I understand it, because with four objects to look upon at one time, the lion becomes confused and simply sits down.
Many business professionals face the same problem: Too many things to concentrate on at once. Do you recognize this in your business? If so, today is a prime time to make a change.
What would happen if I called your office and asked about a loan that you had no experience with? Would you jump on the phone and call all of your AE's to find the answer? If so, you are looking at a stool. For many of you, the problem, right now, is not that you would begin down the path towards the origination of a loan that you know nothing about, but, instead it is even worse. Your phone has stopped ringing.
I typically quote Brian Sacks several times per year. His message: "Find a niche, become an expert and then tell the world." That is the absolute key to increasing your production immediately. And remember, you can't legitimately tell the world you are an expert without at least a few people knowing and believing that you indeed are an expert.
I recommend that you spend a few days deciding which niche will be best for you pursue in your market, spend several more days cramming for the "test," dedicate yourself to ongoing study, and then immediately, loudly and continuously tell the world/your market that you are "the expert" in this particular niche and you are ready to professionally handle loans in that realm for them.
I hate to say that it is that easy, but, it is. The hard part is in dedicating yourself to the process.
As many of you know, I focus on training originators how to provide small to medium size builders with off balance sheet financing. All across the country, the majority of the homes are constructed by small to medium size builders. In every market, the opportunity exists to show builders how to eliminate or certainly reduce their dependence upon banks to fund their business.
The average builder spends a lot of time away from his building business as he works to fund his business. By taking on the majority of that direct workload, you will become a fundamental part of the builder's team. You can become much like the CFO that they wish they could afford. How? By directly originating the loan for the builder's customer, up front, closing that loan, and using that loan to fund the builder's business as he builds the house.
Instead of the builder utilizing his balance sheet to fund his business, you can show the builder how to use his customer's balance sheet. The result is very significant to every builder in your market. The following is a small list of the main advantages:
- No personal guaranty
- Use power of balance sheet to fund purchase of more lots
- Or build more houses with the same capital
- Increased LTV's allow customer to borrower more money than builder
- That increase diminishes the builder's need for cash on each job
- Off balance sheet lenders advance the builder 100% of equity in lot
- Off balance sheet lenders advance the builder 10% start up draw
- Off balance sheet lenders advance the closing cost
- Off balance sheet lenders advance the real estate commission
- And more.
The power of just one of these dynamic benefits would be enough to convince most builders to talk to you. But, add them all together and you have a tremendous unique selling proposition that will propel you to the front of the line to talk to a builder and to secure his business.
Just think of the impact for a builder that is able to advertise to real estate agents: "Sell my home and get paid the commission before I even start building the house."
Have you ever met a real estate agent that would pass up the opportunity to benefit themselves? NO. Every real estate agent in every market in this country will begin to sing the praises of any builder that will work the deal out for them to be paid up front instead of six to nine months down the road when the home is completed.
That one tremendous benefit alone will cause the builder's business to increase and for you to be the hero. I guaranty it.
Last year, I wrote many articles that deal with the benefits listed above in great detail. I recommend that you consider spending a few minutes reading through this material. If you think these benefits have any merit in your market, you may want to consider making off balance sheet financing for small to medium size builders your niche in 2007.
Dedicated to coaching YOU to CP Loan Success!
Joel S. Pate
To review last year's articles or find out more about the exciting niche market of off balance sheet financing to small to medium size builders, contact me via my website at www.vadiumgroup.com/cpexpert.php.
Joel S. Pate, a dedicated entrepreneur, has spent more than two decades in the building, mortgage, and real estate industries and has been involved in over $100 million in construction loans and over $4.5 rillion of residential lending.
As the CP LOAN EXPERT columnist, Pate provides straightforward, unbiased advice about every aspect of construction permanent lending. If you ever wanted to unravel the mystery surrounding new construction lending, then you should tune in.
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