Where do D/E Brokers shine the most?
It seems as if you already have a general knowledge on how the capital markets work, sourcing debt is something that can generally be done in-house. where have you all had experiences where a debt broker added tons of value to a project?
[{"id": "f6n7un9", "text": "I work as a debt and equity broker in Vancouver. Typically where we add value is by creating higher leverage solutions that include preferred equity or mezzanine debt. Often developers or investors don\u2019t have the relationships with potential partners or private lenders that they need to in order to get a deal done. These deals are riskier but the returns are better for the sponsor/borrower if all goes well.\n\nAdditionally, while most groups with moderate competency can source debt in-house, we can sometimes present a borrower in a more favourable light because we know what lenders are looking for. This can sometimes result in cheaper financing by enticing risk averse but cheaper lenders like life insurance companies and pension funds to take a look at loans they might otherwise not.\n\nOften the value proposition of using our services can be as simple as a time management proposition - particularly with private investment or development outfits that might have lean teams.", "replies": [{"id": "f6n9b19", "text": "great answer and I agree on all points. I already kind of had the same thoughts but wanted to gauge this groups opinion on D/E brokers as a whole.", "replies": [], "depth": 2}, {"id": "f6ngj8u", "text": "\\+1000  \n\n\nI still use my broker though we've agreed that if any new financing comes from existing lenders he's connected me with, the fees are 1/2 what they'd otherwise be.", "replies": [], "depth": 2}], "depth": 1}, {"id": "f6ycx24", "text": "Do mortgage brokers handle the financing process from soup to nuts? As in deal with the lender and submit all paper work and make sure to be on top of the loan committee?\n\nDoes the borrower deal directly with the mortgage broker and have no interaction with the lender?", "replies": [{"id": "f70lli3", "text": "They basically package your deal and hash it it with you then pitch it to lenders. You can speak to them a lot more freely than if you were talking to a lender. Kind of like a filter between you and the lender. The only time you\u2019ll have to deal with the lender is the servicing throughout the life of the loan.", "replies": [{"id": "f70lp14", "text": "So the lender trusts the broker. Do they ever want to meet with who they\u2019re borrowing to?", "replies": [{"id": "f70mmsf", "text": "Depends on the size, complexity of the deal, and type of lender . If it\u2019s a CMBS guy or a debt fund, all they really care about are the numbers and how they line up with their underwriting standards. If it\u2019s a local bank, they may wanna do a site visit with the borrower. Really varies. But yes the  advantage of the broker is the lender trusts the broker and their assessment of the deal assuming they\u2019ve done business before together", "replies": [{"id": "f70mp76", "text": "Got it. Great explanation man. Appreciate it.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]