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How to survive in a down market

National Mortgage Professional
Apr 23, 2007

The three P's of a commercial lending boomKellene Bishopprepared, positioning, poise Have you heard there's a boom in the commercial lending world? If not, tune in a little closer and sharpen up your reading skills, because you are likely to soon be barraged with information about it - and not just from magazines specific to the lending world. Big news, like a boom in lending, no matter the specific market, will hit blogs, radio shows and television financier programs in no time. Wells Fargo bank recently stated that there is now more than $1 trillion worth of commercial loans that must be refinanced between 2008 and 2010. Yes, you read that correctly - $1 trillion. Can we all say "wow" together? It's real, it's going to happen and I plan to be a part of it. How about you? Will you be tuned in enough to be ready to handle such business as it inundates the market? To help you get ready for the impending boom in the market, I've put together what I call the three P's of a commercial lending boom. The first of the three is being prepared. Yes, you might be saying, "Well, duh!" Although I frown on that particular saying normally, in this case, I can see your point. However, being prepared means more than just saying, "I'm up for it." It means taking the actual steps to being prepared, such as: Knowing your lenders Who's available to you in particular? Have you made solid relationships with these lenders yet? What are their products? In knowing your lenders, you know what you have to offer the clients. Knowing your niche Have you decided if you want to specialize? When the tide comes in with $1 trillion worth of commercial business, are you going to run around willy-nilly, trying to fund anyone and anything, or are you going to hang a shingle out stating who you are and what you can offer so you will attract the kind of deals you can actually close? Knowing how to market and where Once you know your niche, the business could come knocking on your door, or you might just have to go out and cultivate the crop a little before you can harvest. Get a solid marketing strategy up and running now - not the last week of 2007! Make a name for yourself now and begin your reputation before the tide comes in and all the flow has flowed on past you! The next P in my sequence is "positioning." Many of you may have heard of positioning as it refers to marketing and perhaps on the stock exchange, and while those are similar, this type of positioning is more similar to the kind of positioning you find on a sports team. For example, what position you play on a football team makes all the difference as to what you learn how to do and what you are prepared to do. Sure, all players have to know what a football is and be prepared to run, practice, catch, throw, etc., but where each one stands, how he receives the ball and whether or not he runs yardage or has the ability to kick will qualify him to play a particular position. The same principle applies when it comes to the commercial lending industry. All brokers must know about rates, fees, loan-to-value ratios, credit scores, etc., but the specifics you know, how good you are at what you do and your knowledge base will determine where you are able to position yourself for the future flow of business. Do you want to get knocked over by the tidal wave to come or do you want to ride the tide all the way in? The importance of positioning yourself through your preparation, marketing and knowledge of the market is going to put you on the path to enjoy the wave, rather than get drowned out by it! The third P in the lineup is "poise." Now, when you think of poise, you might think of a super-slim model on a fashion runway, but that hardly has anything to do with the world of commercial lending (although I do fancy myself a snappy dresser!). "Poise," according to Merriam-Webster, actually means "to hold or carry in a particular way; to put into readiness." For our purposes, "poise" will mean to hold yourself or your business in a particular position or to put it into readiness. It will mean readying up your lending relationships, your marketing plan, your office and, most importantly, your state of mind. Are you truly ready for the onslaught that big-time business can bring you? Do you have the energy, the mindset and the manpower in your office? Can you withstand the pressure of possible numerous deals being handled all at once? You need to seriously ask yourself these questions and address any holes you have in your business arsenal. Are you positioned and ready mentally and emotionally for increased business as it comes your way? Remember, you won't have the luxury of just hoping to be prepared, positioned or properly poised once the wave actually hits. (Say that one 10 times fast!) Now is the time to gather your wits about you and do what you need to do in order to be ready. Even if you consider yourself a seasoned pro or you've just now begun riding the commercial lending wave, surf's up - it's time to make sure you're truly ready! As you envelope the principles of the three P's, I encourage you to do so by diving into commercial lending education and gathering the knowledge you need. Also consider finding a mentor if you need one, or a colleague to lament to when the ride gets too tough and you need a boost or some professional suggestions. Make the connections you need to make now and be prepared to ride the wave! Kellene Bishop serves as president of Beehive Commercial Lending, as well as the director of training for Commercial Career, which specializes in training residential loan officers in all aspects of commercial lending. She may be reached at guru@commercialcareer.com.
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