Dominion Lending Centres Commercial Capital
Work on your business rather than in your business
Years as a commercial broker: 30
Loans closed in 2014: 22
CMP: When did you first get into the commercial mortgage business?
I entered the commercial mortgage brokering space in 1988 after graduating from university with a business degree. I joined a local brokerage house specializing in only commercial loans. At that time, I was fortunate to have three job offers – to be the assistant to a stock broker, a commercial Realtor or a commercial mortgage broker. In my view, and in acknowledging a need to balance a desire to be successful with a need to minimize risk along the way, a commercial broker’s income was more stable than that of the other two careers. It seemed to me that the others would be more likely to fall prey to prevailing economic conditions.
CMP: How does someone just entering the space learn the ropes?
My advice to anyone entering the commercial mortgage industry is to team up with a commercial mortgage broker and learn the tools of the trade while under the mentorship of an expert. During this time, I also advise new brokers to start a savings plan so you can survive the periods of drought in the early years – which could be as long as two years. Finally, having an educational background in finance and/or law is a definite leg up. One of the best commercial mortgage brokers in my office is a lawyer who transitioned easily to this field due to a strong understanding of the laws that underlie the mortgage process.
CMP: What’s the secret to building a successful business?
The short answer is achieving longev ity. However, the more complete answer is about finding creative ways to withstand long periods of time without any income. In my experience, this is where many commercial mortgage brokers fall by the wayside. The process involves building a referral network that spans across the country, aligning yourself with developers, commercial property owners and residential mortgage brokers.
It takes a great deal of time, effort and commitment to working on your business rather than working in your business. I can’t underscore this distinction enough. Most brokers spend the majority of their time working on deals in the business because it is the deals that bring immediate financial satisfaction. However, establishing a long-term focus on marketing the business is what has, in my view, resulted in success.
I started off with a handful of really good people who put their trust in me. To earn their loyalty, I understood I had to deliver – and to do so, I had to work very hard. By and large, these relationships have been sustained over my career. In fact, I am still doing deals with the very first client I had 27 years ago. This is the byproduct of a focus on people as the foundation of the business and is undoubtedly the most satisfying part of my career.
CMP: How do you drum up new business?
On a daily basis, I focus on marketing the business in good times and in bad. What I mean by this is an ongoing process of paying close attention to the relationships that sustain the business – lenders as well as clients. As I mentioned earlier, the loyalty I have enjoyed throughout my career is the direct result of my ability to effectively deliver the mortgage requirements of my clients. If you do not perform on requests from lenders or clients, you will not survive in this industry.
CMP: As an industry veteran, what do you think is the most important thing happening in the space right now?
The most important trends I have noticed this year are the downturn of the price of oil and the deflation in the value of the Canadian dollar. These two trends will affect the Canadian economy in profound ways, and I believe many changes are yet to come. Western Canada will be impacted by this change in a greater way than Eastern Canada because the economies in the West are more reliant on natural resources. Depending on where you live, adapting a business strategy that capitalizes on this change will be the most prudent action a commercial mortgage broker can take.