Is commercial loan brokerage a good career?
Hello,

Please forgive me if there is already a post on this, but I couldnt find one, so I figured I would ask this.

What do CRE Loan brokers do? I mean, I am assuming on a basic level it is connects people offering financing with those who need it?

Is this a good career to break into? From first glance, it seems like it is a mix of sales and financial analysis, which sounds interesting.

Who are the major players in this and where would be a good place to start at? How would you recommend someone break into this career?

Is this a commission only type of role? Or are there "analyst" jobs where you get a salary before you go 100% commission like in CRE brokerage in general?

Thanks!
[{"id": "flulog9", "text": "To break into the debt side it requires a much higher level of understanding as you are acting as the handler of the most important part of the deal process. It\u2019s not as simple as brokering a sale. In my opinion you should join a CRE firm with a large Mortgage Banking component preferably one that has a Agency (Freddie/Fannie) sellers license. CBRE, Berkadia, JLL are all good shops to get down those technical skills which separate those who just can walk the walk from those who can walk and talk.", "replies": [{"id": "flv15et", "text": "I actually disagree - I am at one of the shops you mentioned in your comment (those are the right shops though), and generally debt is regarded as *less* technically rigorous than sales, from an analytical standpoint. However, I do think that debt is harder to *excel* in because there\u2019s a lower barrier to entry, and less of a geographical restriction - you can be in LA and competing on debt in the Midwest, it\u2019s not market-specific like sales. Because of that, to be an effective debt broker, you need to have extremely sticky clients and differentiating soft skills - the underwriting and process is cake to pick up though, takes a year at most if you already have a general finance background.", "replies": [{"id": "flv1gsn", "text": "Absolutely agree with many of your points I guess my argument was really about the negotiations with different lenders. Understanding each product just as well if not better than them can save your clients sizable bps and increase proceeds leading to enable you to achieve that stickiness.", "replies": [{"id": "flvk9o3", "text": "I\u2019m pretty senior in a debt fund and I\u2019m 25, honestly there isn\u2019t much negotiating tbh. \n\nA few challenges about criteria or how we classed something - but that\u2019s already been decided and passed back to my underwriters. \n\nIt\u2019s not a negotiation unless you have new facts or think we unfairly classed, to which id say if I\u2019ve got it in front of me or more senior it rarely changes after that as people have the decision in their minds and don\u2019t really forget it/ it\u2019s so negative I don\u2019t care about new facts it\u2019s a serious issue. \n\nNgl the people who get the best out of underwriters and credit are people who ask - what\u2019s the issue, how do we fix it, if we get said item will you guys accept it. If no chance; how would I package this for another lender, what lenders would you put this too.\n\n 100% agreed on putting the underwriters hat on and ensuring it fits - this is a senior skill.", "replies": [{"id": "flvnzcp", "text": "Yes to all of this. One thing I will add onto this is being able to have a wide array of lending relationships for different situations. It\u2019s a balancing act because if I throw all said deals to lender x and none to lender a,b,c,d etc. how likely will those guys look out for me if I\u2019m in a situation where lender x passes. Perfect example going on now as you see a lot of brokers short list of lenders resorting to the bench for now, however the good brokers know who is still got an appetite to dish out capital.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "flvolf8", "text": "Do you typically need a RE salesperson license for this?", "replies": [{"id": "flvoq2b", "text": "No, you will start as an analyst.", "replies": [], "depth": 3}], "depth": 2}, {"id": "hkqk569", "text": "Is Berkadia a good company? I work for them and wanna know how good they are", "replies": [], "depth": 2}], "depth": 1}, {"id": "flupyn1", "text": "I know 3 guys that do 500m plus in this a year. I think they charge clients .75-1% and then they split some of that with the firm. It can be very rewarding but you need the knowledge and have the bank connections first.", "replies": [{"id": "flv63dx", "text": "How much is their estimated take home from that? The volume is pretty sizable", "replies": [{"id": "flviosh", "text": "My guess is 2-3m per year", "replies": [], "depth": 3}], "depth": 2}, {"id": "flvic68", "text": "Christ, that\u2019s a lot - some of my brokers submit about \u00a320m a year with me maximum and take home 1-2% depending on size. Per year they\u2019d do maximum of about \u00a350-100m across all lenders (good friends with them so I\u2019m fairly certain). I\u2019d say most brokers in the market do about \u00a35-10m @ 1%.", "replies": [], "depth": 2}], "depth": 1}, {"id": "flurijt", "text": "Its all the same thing as investment banking on the corporate finance side just working at a brokerage and on usually smaller deals. Analysts will get a salary + bonus. Some firms bonus is equal to 100% of salary. One firm I know in nyc analysts salary is 80-90 so all in 160-180k comp at the analyst level.\n\nAnd yes the role is connecting sponsors to people who can fund their loans/equity what have you. You also will pull research in an advisory role to those same clients and help them underwrite their deals. Most of your day as an analyst will be spent cranking through underwriting and assembling marketing materials before taking the deal to your capital provider relationships and managing the marketing process answering all their questions so the actual sponsor does not have to think about it.\n\nIt is sales like in that you are marketing the deals and dont really owe the lenders any loyalty and its heavy on financial analysis in that you do need some understanding of finance because you will have to underwrite deals and deal with banks, asset managers, insurance companies etc who are your lenders. You also will place bigger deals into cmbs so you have to learn about that world and understand spreads tho less than you would think.", "replies": [{"id": "flwztg1", "text": "Its also sales in the fact (i think the main fact) in that you have to obtain clients that need financing. That of course is once you move from an analyst role to an origination role", "replies": [{"id": "flx2gem", "text": "This is sort of correct but analysts and associates will not be doing any of that, the head of business will be leveraging their relationships to bring leads in", "replies": [{"id": "flxrfpc", "text": "I guess it all depends, I am an analyst on a small team, and assist with business development.", "replies": [{"id": "fly0hk3", "text": "True every team can be different.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "flutdb5", "text": "I work as a principal lender in CRE and brokers are very hit and miss. \n\nBrokers either earn their weight in gold ensuring people can get in and out of our loans quickly, or are sitting waiting to get paid. \n\nI would probably learn the industry build up a solid contact base then start brokering, brokering full time with someone elses client base and in a master brokerage is hard work and awful money.", "replies": [{"id": "flv1dc4", "text": "What do you mean by \u201cbrokering full time with someone else\u2019s client base in a master brokerage?\u201d", "replies": [{"id": "flv2iup", "text": "He means that there is usually senior managing director the office \u201crainmaker\u201d in an office who\u2019s busy as hell so he\u2019ll in most cases toss you a few accounts to run with and will break you off a few bps for running with the deal. The hope is that, that will flourish and you can start building your own book of biz from those opportunities.", "replies": [], "depth": 3}, {"id": "flvd71r", "text": "There are three (unofficial) different levels of broker; \n\n1) gmail\u2019ers (opportunists) who came across a deal and try and broker it themselves. These guys get slammed by the lender (unfortunately) and the lender will be able to leverage the deal into their court with no real protection for the client. (LTV\u2019s might change throughout the deal, rates might change, might pressure the client for a personal guarantee etc etc). These guys tend to be ex brokers or Random\u2019s in the CRE game who want to make some money but put in no effort and hopefully they get a new Rolex when it pays out.\n\n2) Independent brokers (professional), I find these guys are the best. Usually late 20\u2019s to mid 30\u2019s. They have usually stolen a client base from an old school broker and have developed a client base at a brokerage which like them as an individual and not what the brokerage firm is offering so follow them. These guys will Hussle hard and are highly demanded, most of my friends in the industry are in this category (I\u2019m 25). They make about \u00a3150-200k a year if they grind hard and take some risks (few backhands here and there for client referrals etc (lawyers, valuers, builders, site managers, lenders)). \n\n3) Master broker. In with the independents there are also a lot of guys who have good deal flow but don\u2019t know the specialists lenders to pass the deal too. These might be regulated mortgage brokers, financial advisors etc. They will pass all of their specialists or CRE cases to a master broker who will do it for them. They at best split 60:40 with their introducer. These guys have good relationships with big lenders, but in my eyes they\u2019re a numbers game \u201cthrow enough *stuff* at the wall and it\u2019ll stick\u201d. They won\u2019t actually find a specialist lender who suits the project, they\u2019ll give it to challenger banks and other mainstream specialist lending companies who are \u201clikely\u201d to take the deal. The problem with this is challenger banks, and other mainstream specialist lenders a lot of time don\u2019t have appetite for deals like this and so they get thrown out and the client will look elsewhere. \n\nE.g. master broker pitches them with a tier 2 bank, instead of a tier 3 who would 100% take it. Gets rejected, Client is now under time constraints and pressure from partners to complete and so completes with a tier 5 or 6 - gets slammed on rate, reliability, LTV and fees. The independent broker above would have gone to a tier 3 straight away as they specialise and know this is the issue straight away. \n\nA master broker is basically a glorified call centre who funnel the deals down get them moving, get it in the pipeline and then pass them to an \u2018expert\u2019 within the team who calls me every now and then for an \u2018update\u2019. \nMaster brokers are where you\u2019ll build your client base and experience in the market, but I would 100% avoid starting at any brokerage which isn\u2019t completing large deals regularly and has a team of more than 5/6 brokers. If you join a 20/30 broker team, that\u2019s a call centre and you\u2019re unable to steal the clients as you pass the deal around (to stop you doing that).", "replies": [{"id": "fme1q3c", "text": "I laughed out loud at your \"gmail-ers\" - you are so spot on with that. I'm a lender and talk to brokers all day. Some real - some gmail-ers.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fme1l9h", "text": "AMEN to that. I'm in the bridge space (we're a decent sized shop in the lower middle market) and brokers run the gamut from excellent to illiterate.", "replies": [], "depth": 2}], "depth": 1}, {"id": "flvhecu", "text": "A good CRE broker would have a day along the lines of:\n\n- calls to the lender with existing loans, checking valuation &amp; legal progress.\n\n- feedback to clients and chase items outstanding from the 9am calls (payment needs on valuation or legals).\n\n- existing loans client outreach; development facilities requiring drawdown, lease renewal uplift drawdowns, end of term renewals, frequent buyers and sellers. I call this beating the drum (making sure these guys return).\n\n- BDM &amp; Bank meetings, basically listen to a sales pitch. From my experience lender side this is becoming less popular due to people repeating and lying about offering etc. I was an underwriter and BDM cases are always over quoted and get revised (they are glorified salesmen), which the broker absolutely hates as usually the client has seen it at that point so wants the old quote.\n\n- broker outreach, see what other brokers have on their plates and if they can manage some deals you don\u2019t want (I know people who give away small or regulated deals as they waste time (give them to master broker to sort out, pick up a couple of \u00a30000 if it completes). Vice versa applies, scoop up from lawyers, valuers, lenders, and other brokers who can\u2019t offer what you are offering. \n\n- no real analysis tbh, lender does all this. Prep/pitch of deals is important though, but I wouldn\u2019t put stats in it as when the lender finds it\u2019s incorrect or they calculate differently they won\u2019t like it. \n\nOverall how to be a good broker:\n\nIt\u2019s all about control of information, you should be able to package a slightly \u201coff\u201d (any broker reading this will laugh at that lol) deal to a lender and make it go through. \nYou should reach out to niche lenders who market badly, cram that stuff through with them while the markets soft and other brokers don\u2019t know where to place it. \nE.g. during corona virus I know 2 lenders at the moment still lending who don\u2019t market well and don\u2019t understand the risk (still offering 75% etc), I\u2019ll push brokers over to friends so they\u2019ll pick up the fee (for literally knowing the name of a lender (lol)). In turn they give me more business. \n\nIt\u2019s all about building a client base who know you\u2019ll get it done, know you have leverage with lenders, know the lenders who will actually get it completed, keep costs down, squeeze the lender when required - basically \u2018leverage\u2019 you into the best loan that you, your asset, and scenario (timescale) can get. \n\nThe best brokers, keep their ear to the ground, accurately promise (if you over perform = you weren\u2019t  selling hard enough, underperform = you\u2019ve pissed the client off), know where to push a bit of money (backhand for referrals) (you\u2019d be surprised of the developer \u201cmates\u201d who take a cut of their \u201cmates\u201d deal on a referral fee through a broker), and have a good contact base (know some valuers (dont always use bad ones, lenders catch on) , lawyers (who take a view and/or ignore), accountants, and underwriters. \n\n(Haven\u2019t proof read this, just wrote it quickly)", "replies": [{"id": "flvif6w", "text": "Holy shit thanks very detailed", "replies": [{"id": "flvkpbx", "text": "No worries, if you ever get serious into getting a job/interview I\u2019ll write you a list of things you should learn and review. Btw have you ever read; the real estate game by Poorvu. This is the bread and butter of real estate, if you understand that book that\u2019s all you need to know as a broker technically RE wise.", "replies": [{"id": "flvl6ma", "text": "Please send me the list (or post it online for others who read this). I took a few grad RE classes and planned on taking the RE license test. I\u2019m good at sales but looking for a career, ya know. The idea of selling debt is interesting to me more than the buildings.\n\nDo I need a RE license to do this?", "replies": [{"id": "flvlqmy", "text": "American? Not sure. \n\nI\u2019m UK and ours is two markets, regulated (people\u2019s primary homes) and Unregulated (rental properties, commercials, profit making property). \n\nI work in unregulated, I have a feeling America would be the same? But not sure.\n\nWill write the list tomorrow at work, but 100% read that book. Teaches you how to review real estate and provide a good analysis while you are talking. Remember the guys you\u2019ll be talking to are worth 15/20m-500+m they\u2019re serious real estate guys and talk real estate all day. When you look at a property they show you they\u2019re looking for you to come back and ask good questions about it - you\u2019ll get it from a RE brain.", "replies": [{"id": "fm1vr4x", "text": "If you have a chance, please complete that list :)", "replies": [{"id": "fm8sbme", "text": "Sure, what\u2019s your knowledge to date? Entry level or reasonable knowledge? Stuff like; LTV, rate, dev finance vs term, drawdowns, serviced vs retained?", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "flvt1hh", "text": "Eastdil, jll, CBRE, berkadia, walker and Dunlop are all major players that would good to hang your hat at starting. Very competitive tho", "replies": [{"id": "fme1tg3", "text": "I would also add NGKF; Transwestern; Northmarq and MMCC.", "replies": [], "depth": 2}, {"id": "hkqkbk5", "text": "Would berkadia have good name value on my resume?", "replies": [], "depth": 2}], "depth": 1}]