MReport November 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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24 | M R EP O RT FEATURE SOMETIMES, IT'S GOOD TO BE A FOLLOWER. Follow MReport on social media to put the latest mortgage banking news, stories, strategies, and insights at the touch of your fingertips. MReport @TheMReportNews The MReport values. They will typically look at it as helping investors avoid a bad deal. It's expertise that loan officers themselves don't have to have, either—a high quality private money lender will be happy to teach them and share their insights. Make no mistake, interest in private money loans is growing. The private lending industry currently accounts for $50 to 60 billion in originations and growing, and institutional capital from Wall Street is pouring into this space, making it very lucrative. The largest conventional lenders are already aligning themselves with private money lenders because they understand the value of serving investors. Even though they are being overwhelmed with refi business now, more brokers and originators should be doing the same. The Importance of Being a Lender for Everyone O f course, it's awesome to refi every borrower you can. However, experienced origina- tors understand they need to be a lender for all borrowers, and they make sure they have other tools that are just as sharp and ready to go. Real business growth happens by looking beyond low-hanging fruit and anticipating future op- portunities for growth before they happen. Roughly 15-20% of the average broker's prospect list is made up of potential investors who could use a private money loan to buy an investment property as a rental or fix and flip a property in today's hot market. Very often, in- vestors are also real estate agents, which makes them a great source for future business. To truly get ahead, brokers and originators need to build the discipline of continuing to pursue new busi- ness by growing their network and their database. Another way to look at this is understanding the "lost- opportunity'"cost of not being able to serve the needs of all your customers. If you're not serving real estate investors, someone else is. Many originators feel as though they can't afford not to sell refi after refi, and who can blame them? We all know rates this low won't last forever. On the other hand, there is a cost to not serv- ing your investor clients as well, since they are more likely to give you consistent repeat business. Even if an investor doesn't refi and instead sells their property, the opportunity exists for private financing for the new buyer. Frankly, there's not a lot of nur- turing going on among originators right now, so real estate investors are not getting the attention they deserve from lenders. The key is to long-term success is to make sure that a little bit of every day is spent investing time into cultivat- ing new clients. To be sure, the mortgage busi- ness is a feast or famine type of market. This isn't the time to take up golf—it's time to eat. For op- portunistic originators, however, there is always more on the menu than it appears. And private money lending might be the most rewarding meal of all. . WILLIAM J. TESSAR is the President and CEO of Civic Financial Services, a premier institutional private money lender for real estate investment financing. He has more than 30 years' experience in the financial services industry and has been one of the nation's top loan originators. Learn more about CIVIC at

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