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Stop losing money!

Posted by:  Jim Morstad
2016-10-13 16:06:03

You're losing out on your next commission check

Avoid these common misconceptions about commercial real estate that prevent too many brokers, real estate agents, and Realtors® from earning more money.

 
  • It’s not my niche market - many marketing gurus advise their followers to “find your niche” and farm/work that specific area. It’s not bad advice. The only problem that can arise is when you become so single-mindedly focused on that niche that you walk right by a solid commercial real estate deal. True, many of you in residential real estate do have an area or a specific group of clients that you work with. That’s great. All we at Balboa want is for you to be able to close a few more deals in commercial real estate throughout the year. 1 CRE deal each quarter (only 4 per year) could help you earn an additional $20,000 per year.

  • CRE is outside of my scope of practice - in September Balboa sponsored a booth at the SDAR Expo at the Convention Center. It was a fun event that allowed us to connect with many residential professionals. Unfortunately, many held the assumption that they were not allowed to work on commercial real estate deals. They thought that they needed a special license or designation. Not true. If you are a licensed real estate broker all you need to do with Balboa is fill out a standard form so that we know where/who to pay the commission checks to. If you hold a salesperson license then we’d simply need your broker to fill out that same form. Brokers, all of your salespersons could then submit any CRE deals through your account with us at Balboa.

  • CRE is too difficult to enter - It is easy to think that CRE is only for the high-rise downtown multimillion dollar projects. In actuality, most commercial real estate properties and lending deals are your neighborhood “mom and pop” type buildings. Think the local restaurants, retail stores, mixed-use properties. These are the neighborhoods that make up that majority of San Diego and Southern California. The National Association of Realtors research states that the average transaction price for CRE deals reached $1.4 million in the first quarter of 2016.

​​How you can get paid at Balboa

  1. Keep your eyes and ears open. Now that you know you can do this begin to think about what clients you work with that may rent their commercial space. Could they benefit by purchasing a CRE property? Maybe they need to refinance their current loan or SBA loan? Simply begin a conversation by asking.

  2. Know your numbers. CRE (from a lender’s pov) is a straightforward numbers game. Can the borrower debt service coverage the loan? What is the net operating income on the property? What is the LTV, rate and terms needs? Not to oversimplify the process but once these ratios and numbers fit into Balboa’s common sense lending approach we’ll be looking to fund your deal and get you paid.

  3. Signup on Balboa’s website. Become “an approved broker” on our site and you’ll have access to submit your deals through our secure web portal and get the ball rolling on your deal. We are always available for a phone call or email also.

 

What to do today

The main point of this article is to get you thinking more about closing your next CRE deal. Think about where and how you can find your next - or first - commercial real estate deal.

 

Keep doing the work that has made you successful. But going forward make sure that you are ready and able to take advantage of that next CRE deal that crosses your path. We’d love to start writing more commission checks to more brokers!

 

Call me to review your next loan scenario.

Jim Morstad, Vice President of Commercial Real Estate

jmorstad@balboathrift.com

twitter: @BalboaThriftCRE

800-809-7044

direct 619-397-7705

 

 

 

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