2 DIVERSIFICATION IS SMART
Put simply, the mortgage industry is a volatile place.
Since no one can predict with total accuracy what
direction the market will take, originators should plan
for times of uncertainty. Diversifying an existing com-
mercial or residential business with small-balance com-
mercial mortgages is a smart strategy because there is
a near-constant need for financing no matter how the
rest of the market is performing.
Many originators find that simply adding small-balance mortgages to their product offering on their
website or social media profiles has a positive effect
on their business. Referral sources are more likely to
send a wide range of deals their way, and potential
borrowers see a large product offering as a sign of
Over time, borrowers view originators who can
close more than one type of deal as not just mortgage
brokers, but as true solution providers. That’s a reputation any broker would love to own.
3 POTENTIAL DEALS ARE CLOSER THAN BROKERS THINK
Networking and sourcing leads come with the
territory for mortgage brokers, but those who supple-
ment their existing business with small-balance com-
mercial mortgages usually find business opportunities
right under their noses.
For example, let’s take a look at residential brokers
who secure funding for single-family home mortgages.
Hiding in plain sight among their clients are doctors,
small-business owners, and attorneys who want to
purchase or refinance their commercial buildings.
These individuals have a constant need for commercial financing, and they would prefer to work with a
broker they can trust.
Experienced commercial brokers tired of competing with other originators for the next large-scale
mega-deal can also benefit from taking a second look
at the small-balance opportunities that come across
their desks. These deals can become the low-hanging
fruit that keeps their pipelines full and their business
4 THE DEALS AREN’T OO COMPLEX
Unlike large-scale commercial mortgages, which
can take many months to close, small-balance com-
mercial transactions typically close within 30 to 45
days. The shorter process length is likely one reason
why residential originators are drawn to sub-$5 mil-
lion commercial deals.
Commercial lenders in this space realize that many
of their brokers are novice small-balance practitioners,
so they take steps to make the transaction process
as simple as possible. As a result, the experience can
have more in common with a typical residential deal
than a complex commercial transaction.
Some national lenders, like Silver Hill Funding, also
provide marketing assistance to brokers in the form of
customizable flyers, social media tips, and communication scripts.
No commercial mortgage is without its complications, but brokers can expect fewer headaches when
they take on smaller deals.