By Chris Gleason
Managing director
MMG Capital LLC
5 Steps to Presenting Deals to Private Lenders
Knowing how to package your loan request is key to securing funding
More borrowers are scr aMbling There are, however, some basic guide- information, but they’re also more likely to
for financing solutions that no longer exist lines that you should follow when you de- take the time to try to find solutions for you.
via traditional means. As more banks close cide to submit files to private lenders. The
their doors and guidelines are continually most important thing to remember is that 3. Keep it relevant
modified and tightened, commercial mort- you’re dealing with people, not computers Every private lender is different, and each
gage brokers are watching options for their or automated underwriting systems. company will look for different information
clients’ financing disappear. This is where Following the five steps below will give when evaluating the feasibility of your loan
private lenders come in. you a better chance at getting the people request. Although it’s not possible to tailor
These hard-money lenders fill a large that are looking at your deal to think that your loan submission to every lender, it’s
part of the void in the financing market- you’re worth their time — something that also not a good idea to send everything that
place. Borrowers are realizing that they may can, at times, be half the battle. you’ve gathered on your client and assume
not have another option and are beginning that the lender will pick out what they want.
to turn to private lenders for their loans. As 1. Put down your pen Unnecessary information not only frus-
a mortgage broker, you have to be ready for First: Type your deal presentation. Nothing trates lenders, but it also makes them think
the demand that will be placed on you by screams “I’m probably not worth your con- that you didn’t bother to do any research on
borrowers who are ready to make a deal any sideration” more than a handwritten loan their lending or submission guidelines be-
way they can. submission. fore you sent them your deal. At the least,
Because closing deals with private lend- There’s an abundance of technology irrelevant data is going to get in the way of
ers may soon become an important source available these days, and you don’t have the lender reviewing the data that counts,
of mortgage brokers’ incomes, you must to take advantage of all of it. You do need slow down the process and make your file
understand how best to work with them. to implement some simple word-process- a hassle to review.
Getting acclimated to private lending will ing and data-input skills into your arsenal,
only make you more valuable to your cur- however. Handwritten files can be tough to 4. Pay attention to detail
rent and future clients and put you in the read, sloppy-looking and altogether frus- Private lending isn’t a “no questions
position to close loans on files that you trating to a private lender. Taking the simple asked” ballgame anymore. Lenders want
might otherwise have to turn down. step of typing all your loan requests will get to develop a complete understanding of
In addition, it’s important to understand your deal into the pile on the right side of a your borrowers, their situation and their
how private lenders work because they are private lender’s desk. plan. If your information leaves out details,
an odd bunch — no two are alike. Each one makes details confusing or conflicts in any
has different likes, dislikes, parameters and 2. Organize your data way, your file is going to be red-flagged.
procedures. Private lending is as much sub- Beyond typing the information that you’re Often, these things happen simply be-
jective as it is objective, and private lenders presenting, it’s also important to make cause mortgage brokers overlook things,
come in all shapes and sizes. sure that you hand it over in a manner that continued >>
Unfortunately, brokers will never be able is easy to sift through.
to figure out every private lender. Instead, Labeling the information you send to a
you must develop an understanding of private lender — whether by electronic file
your targeted lenders and find a way to ef- name or packaging the information in a Chris Gleason is the managing director of MMG
Capital LLC, a nationwide private-money lender.
ficiently present deals to them. You’ll never PDF — will not only get your loan request re-
MMG provides collateral-based loans for resi-
be able to submit your deal to all private- viewed more quickly but also will make your dential and commercial purposes. The company
money lenders exactly the way that they submission look impressive. When lenders has never charged any upfront fees for due
want it. To do so would mean endless hours can sort through data efficiently, they’re diligence. Contact Gleason at (310) 295-1121 or
of editing, retyping and repackaging. not only more likely to question less of your chris.gleason@mmgcap.com.
Reprinted from Scotsman Guide Commercial Edition and scotsmanguide.com, May 2011
All rights reserved. Third-party reproduction for redistribution is prohibited without contractual consent from Scotsman Guide Media.
<< continued
misinterpret what their client is telling them You will be asked some detailed ques- is to review files before the lender does
or don’t take the time to double-check their tions about your loan request at some time and have all of the answers ready. It’s
facts. For a lender, however, this misinfor- in the review. When you don’t know the an- your responsibility and it’s what you get
mation can trigger the “What are they trying swers or continually have to check with your paid for, so make sure you don’t take the
to hide?” question. At the least, misinfor- client, it can do one of two things. First, it task lightly.
mation forces lenders to have to ask ques- can make lenders think that you’re taking
•••
tions, which takes up more of their time your time to decide what the answers to
— and can lead to the conclusion that your the questions should be — in other words, Taking these steps doesn’t transform the
loan request isn’t worth it. you’re trying to figure out what the lender actual quality of your client’s loan request
wants to hear. Second, it can make the in any way. It does give it an appearance of
5. Be prepared lender think that perhaps you’re not actu- quality, however.
Lenders understand that you must close ally the client’s broker and instead you’re Just like job interviewers, private lenders
deals to make a living as a mortgage bro- a broker to a broker. This is commonly re- are a subjective bunch, whether they want
ker. They also understand that the mort- ferred to as a broker chain, which is be- to admit it or not. Every refined detail can
gage industry can be a numbers game for coming renowned for leading to all sorts only work in your favor in the long run, espe-
its players. That doesn’t mean that you can of problems from loan review all the way cially if you plan to do repeat business in the
afford to shoot files to all types of private through closing. private-lending arena. Take time to present
lenders without ever getting involved in Take the time to get to know your cli- your deals carefully to private lenders. It will
the information. ent’s situation and loan request. Your job increase your chancesof success. •
Reprinted from Scotsman Guide Commercial Edition and scotsmanguide.com, May 2011
All rights reserved. Third-party reproduction for redistribution is prohibited without contractual consent from Scotsman Guide Media.