There may be many reasons for you to consider becoming a broker. Maybe you are tired of working the usual nine-to-five jobs, or maybe you just need to have more flexible working hours, or simply because your company is “restructuring” and you’re at risk of being let go. Just like there are many different reasons for you to consider this career change, there are also many factors you need to consider before making the leap. All of the answers might be triggered by the most important question which can change lives and guide success: Why?
There is a significant earnings potential and respect offered by this profession, compared to many others. A lot of successful brokers can earn more than six figures a year, while at the same time be their own boss and have the luxury of maintaining a balance between work and leisure. Above all, there is not much of a requirement in terms of startup investment, nor is there a need for a degree in finance or decades of experience in the industry. You simply need to have a passion for the business and an excellent work ethic, acquire the appropriate training, find and maintain the right connections to lenders and a strong mentoring network, and know how to utilize every business opportunity.
Every business needs capital! There will always be new businesses, or businesses planning to expand their operations, or those who need to resolve cash flow issues. They will need a large sum of money and most likely need to borrow it. You don’t need to cold call individuals to get business. They will come to you! You just need to know how to make the right connections and maintain the relationship. Businesses and real estate investors will welcome the opportunity to work with you, especially since most of them only know what their local banks offer in terms of loans. The services you provide will be invaluable to them.
As a broker, you will have three possible income sources:
There are many transactions for which you can offer your services, but the ones most relevant to our business are the following.
Bridge and Hard Money Loans
Bridge and hard money loans typically involve commercial property owners who are unable to get traditional funding, while at the same time they need to quickly acquire such funding to either purchase a commercial property, complete a construction, or cash out on their commercial properties. The loan is based on the owner’s assets instead of his credit scores, and can be closed within a week, sometimes less. The types of situation that a bridge or hard money loan would be suitable are, among others, an acquisition of a new property in which the investor or borrower needs funding quickly to be able to compete with other bidders; a renovation of an apartment complex to fulfill the requirement of 80% occupancy rate required by the bank to obtain longer term financing; or a real estate developer who seeks to purchase a property to renovate it and sell for profit.
Commercial Real Estate (Development) Financing
Commercial real estate developments are often associated with high risks, ones which traditional banks are not willing to take. Meanwhile, many business owners need to finance or refinance their businesses’ real estate, or simply finance their income generating investment property. For example, a developer may need to finance the construction of a 30-tenant retail shopping center, located near a well-known national hardware chain, or an owner of a motel may need to refinance their business because their current mortgage is due, but their local bank decided to not renew the loan for whatever reason.
At Hard Money Mobile, the transaction size can vary from a minimum of $250,000 to $10 million or even more. With a broker’s fee of between 1% to 3%, the broker’s commission can range between $2,500 to $300,000 per transaction.