Dominion Lending Centres Innovative Mortgage Solutions
Years as a commercial broker: 3
Sales volume in 2015: $55 million
Totals deals in 2015: 25
CMP: How has business been in the Lower Mainland?
Harry Tyson: Buildings are being sold at very low cap rates, which means higher values, but the income from the property cannot support a significant amount of debt. In a recent case, the cap rate was 3%, and the income could only support a loan of 47%.
CMP: What are the benefits and challenges of being in such a hot market?
HT: There are benefits, but the problem right now is that a number of big institutions have already used their budgets for the year by June. Some of the bigger credit unions and different financial institutions have basically turned off the tap. For many of them, the amount of volume that occurred far exceeded their expectations, so they don’t have money available for new members. They are trying to keep whatever money they have for existing clients. So it makes it more difficult to get funding for clients.
CMP: As a relative newcomer to the industry, was it difficult to break into the commercial space and build a business?
HT: I started as a mortgage broker in 2013, but prior to that, I had been working in commercial lending since 1987. So I had all that experience and contacts already. I had 20 years with Vancity before I made the switch.
CMP: Why did you make that change?
HT: I had an opportunity to move over to DLC, so I just thought it was the right time. There were more opportunities to find funding sources for clients moving into brokerage.
CMP: What major difficulties have you encountered as a broker?
HT: When you work for one of the financial institutions, you control the money. That eliminates the need for a middleman like me. At Vancity, I did the majority of the funding for clients. As a broker, you have to show your value in giving the clients different structures, which I couldn’t do as a lender with Vancity.
CMP: Is regulation much different as a broker than it was on the lending side?
HT: Not really. You need full disclosure on both sides. As a broker, you have to make sure to disclose all the information to both the borrower and the lender. For your relationship with the lenders, it’s imperative that the package you send them is correct and no details are missing.
CMP: Have your goals changed much in your three years as a broker?
HT: My target was to get above $60 million. In 2015, I was close to that, and a couple of deals didn’t close until January, so I think in 2016 I’ll pass that mark. I’m at $45 million now, so I expect to reach that $60 million mark this year.