The acquisition of investment properties has seen an increase over the years. This is not a surprise since it provides investors profit not only from rental revenues but can also create a profit when investors decide to sell the property. With the growing economy and a reported shortage of new homes, investors are eyeing investment properties even more as a good source of passive income—another opportunity for brokers to dip their toes into.
Just like anyone else who is affected by the ups and downs of the economy, brokers also face several challenges from complex residential lending rules and regulations to stricter Consumer Financial Bureau Regulations. With this, it may be high time to break into investment property financing for it offers many advantages and bigger paychecks. As a broker, you may be hesitant to do so, but fear not, if you already have experience with residential properties, it is not as complicated as it sounds. Here’s how:
Team up with a Lender who has Experience in Investment Property
Partnering with a lender who accepts residential investment property deals utilizing a “residential style” submission package – 1003 application, a credit check, and a straightforward property rent roll. Avoid at all costs the intricate loan packages, executive summaries, and documentation requirements that require years of experience to perfect. Your chosen account executive (AE) will be your driving force-choose one who is experienced, it will make a difference. Since the AE is at the forefront and will coordinate and process loan applications- team up with one who knows how to get deals done, they will not only make the financing process more smoothly, but they can also help prevent issues in file submissions.
Simplicity, Efficiency, and Loyalty are Keys
Do not be overwhelmed. Since you are still starting, start simply. Find your niche and stick with it. Do not try to deal with everyone. Decide on what particular clients, property type, and mortgage program you want to try first. Once you have the hang of it and are ready for more, be efficient with your processes to avoid backlogs. Be quick to provide requirements, and documents so appraisals can be done on time. Appraisals for investment properties take more time compared to that of residential ones so if you fail to provide what is necessary on time it would likely mean a delay in your paychecks as well. Use a loan processor, to speed up the process even more. But most importantly, stay loyal to your lender. If you have found one who supports you-then you have all that you need.
Learn the Job
Know everything there is to know about investment property financing — you can read, study and learn from other lenders but you learn more by doing. Learn from your own experiences and evaluate what you have done right and wrong and repeat the process. This is the only sure way of learning about the commercial property market. Remember, there is always something new to learn.
Build a Client Base
The secrets are networking, marketing, and meeting prospects. Get out there and connect with investors and real estate agents. You can post online ads, send emails, and attend investor meetings. Ask former clients if they possess any business or investment properties. Print some business cards and distribute them whenever you have the opportunity. A website might also be helpful. Read on SEO and SEM.
Above all, build a reputation for excellent, honest service. Treat your present and future clients right. Be transparent with your clients and offer options and solutions.
If you are looking for one, then this might be the sign to start working on closing that first investment property deal. Start now and see where it takes you.
