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..
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.
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?
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).
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?
ThanksAndrew PittParticipant@andrewpittJoin Date: 2015Post 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.
Enhancing Commercial Property to Empower Business
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 :)kaviParticipant@kavipriyaJoin Date: 2016Post 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.thecrestParticipant@thecrestJoin Date: 2004Post Count: 992
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.Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069