Forums / Property Investing / Commercial Property / Broker vs Direct for Commercial

Viewing 11 posts - 1 through 11 (of 11 total)
  • Profile photo of danwattodanwatto
    Participant
    @danwatto
    Join Date: 2007
    Post Count: 9

    Hi All.

    Have been talking to a few friends who have bought commercial and they are all saying they use direct banks for deals (once they get good relationships).

    Also they said that when they used brokers they always just did a “referral” to a bank for a fee and not a true broker ie did not write the loan.

    For those experienced in buying CIP – what is your opinion about using brokers are there good ones for commercial?

    I love brokers for resi, but I know commercial is a totally different ball game..

    Thanks

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    The referral is called ‘spot and refer’, some lenders run their commercial programs like this, particularly if the brokers aren’t familiar with commercial/write low commercial volumes.

    Some of the best commercial products in the market cannot be accessed by going direct to branch. Likewise the usual policy/serviceability/rate comparisons benefit using a broker than going direct.

    The key with commercial is ensuring your broker actually is familiar with writing it, the vast majority of brokers may be great with resi, but not have much experience with the commercial market.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of danwattodanwatto
    Participant
    @danwatto
    Join Date: 2007
    Post Count: 9

    Thanks Corey.

    For a broker like yourself heavily involved in Resi, how do you select which commercial lenders to do accreditation with?

    Normally with resi I know the aggregator just sends you to their list for training. But with comm is it also dependent on the aggregator? Or is it direct business relationship with each comm lender?

    I’m asking as I found previously the aggregator relationship was critical in getting past APRA boundaries,and also general curiosity.

    Also as example your own business, how many commercial lenders would you be accredited with and/or written deals for?

    Thanks

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Dan – my brokerage has the full panel of commercial lenders, and a number of off panel lenders outside of the aggregator who deal with specialist lending. To be honest it’s much the same as resi accreditations, some of which are actually bundled to the residential accreditation. Likewise there’s always lenders beating down the door to try get five minutes to show their product and policy suite.

    I’m not sure what you’re getting in regards to the aggregator relationship assisting with APRA – for the most part aggregators primary role is within commission management and lender liasion for minor admin issues – likewise APRA isn’t touching on commercial.

    As per experiences with commercial, a quick look at the workflow shows 8 commercial transactions in progress today, ranging from business finance, development to SMSF CIP purchasing. Of the lenders on panel, ~20 of them would be playing in the commercial space (which is a broad spectrum).

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of danwattodanwatto
    Participant
    @danwatto
    Join Date: 2007
    Post Count: 9

    Hi Corey

    For the aggregator relationship, I mean I was able to get past APRA on Resi due to some lenders on this aggregator panel that had not been affected by APRA. For Comm, yes no APRA, definitely one of the advantages of Comm.

    Is your brokerage your own business / partnership?

    With your Commercial IP deals your brokerage does – do you have many lenders that allow 80% commercial loans?
    I understand that under $1m dollars, for Retail Shops and Strata offices (and any other types?) that a few lenders are fine with 80% LVR.

    Do you have these options? What are the allowed property types for these?

    Thanks

    Profile photo of Andrew PittAndrew Pitt
    Participant
    @andrewpitt
    Join Date: 2015
    Post Count: 21

    I have two grandfathers that were bank managers, my dad was a bank manager, my mum worked in the bank, so did a sister-in-law.
    But from my experience, it’s use a broker every time.
    I have a good relationship with Michael and George at http://www.alphamortgagemanagers.com.au
    My nephew has another in North Sydney that he can relate to.

    Plus a strategy to reduce risk – it to spread different loans with different lenders. Which a broker can do.
    All loans and all security with one bank? No thank you.

    Andrew Pitt

    Enhancing Commercial Property to Empower Business

    Profile photo of danwattodanwatto
    Participant
    @danwatto
    Join Date: 2007
    Post Count: 9

    Thanks Andrew I pretty much agree from resi experience I would have trouble sleeping using only 1 bank.

    Barlo Commercial – that wouldn’t be the same Barlo group from The Castle would it :)

    Profile photo of kavikavi
    Participant
    @kavipriya
    Join Date: 2016
    Post Count: 2

    I think it’s better to deal with the bank directly. If we are a regular customer and have a great relationship with the bank, definitely banks will offer better terms and interest rates.

    Profile photo of thecrestthecrest
    Participant
    @thecrest
    Join Date: 2004
    Post Count: 989

    All in with one bank ? No, never again. Brokers provide expertise and leverage.
    Cheers
    thecrest

    thecrest | Tony Neale - Statewide Motel Brokers
    http://www.statewidemotelbrokers.com.au
    Email Me | Phone Me

    selling motels in NSW

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    All in with one bank ? No, never again. Brokers provide expertise and leverage.Cheersthecrest

    And a far greater panel of commercial lending options than available through branch/direct to bank. This is especially the case for those looking to purchase with lending <1.5mil, the third party and non big 4 lenders generally outperform in terms of cost and features through their broker sourced products.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,065

    Hey danwatto

    Corey is a gun commercial broker – he knows his stuff.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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