My philosophy as it relates to lenders has gone through a series of modifications which has resulted in a major change in the way I handle financing for my clients’ transactions. Since Reagan was in office I’ve funded over 80% of purchase money loans through the retail side of one lender. I’ve used the same loan officer the entire 20 years with great success. His costs have been much lower than most of his competitors, his promises were kept, and his integrity has remained unquestioned.
His company then began to change. At first it was subtle. You know, little things that merely caused me to scratch my head every now and then. Then they began going back on their word. What they said they’d do would turn out to be very different than what they finally agreed to. All this, to be fair, had nothing to do with my loan guy, who was as baffled as I was when this started happening.
This change in their general approach forced me to step back and reconsider how I think of lenders. Once I was able to solve the ‘cost’ side, it was easy to transition to using brokers vs retail. What has always surprised me is the number of folks who didn’t understand why I chose retail over brokers. Simple — my guy delivered a very competitive product at a very low price — again and again, for 20 years.
Although I’ve auditioned many brokers in the last three years, none of them have emerged as the run producing clean-up hitters required. They fall into a couple groups. The first group is Mr. Excuse. There’s always a reason for failure, and it’s never them. Of course, when I end up doing the loan successfully with someone else, they just shrug.
The second group is Mr. What’s Your Problem? Their business model is the mud-against-the-wall approach. They don’t understand why I don’t look at the business the same way. They’re so used to closing only half of their applications while making a quarter million a year, my frustration with their poor performance mystifies them.
They just don’t get it.
To be fair, I did find a guy in Boise who seems to be able to understand what I’m doing. He’s done a handful of loans so far, and I have only mild complaints. However, he hasn’t impressed me as The Guy. We have a few brokers who fit into the Boise lender’s category. They do the job but don’t engender great confidence. They don’t take the bull by the horns, so to speak. They’re singles hitters at best.
Investors can’t have singles hitters as their lenders. They need someone to consistently come through when the bases are loaded. Or when they’re in the middle of a tax deferred exchange. A lender who delivers the goods in an exchange is like the clean-up hitter smashing a bases loaded double late in a close game. He’s the difference.
A singles hitter batting .330 a year is generally paid considerably less than a .250 hitter who knocks in 120 runs year in and year out. The team with the most runs wins — not the team with the most hits. This is why Tony Gwynn never made the money big RBI guys did. And Tony is a Hall of Fame player.
I’m looking for a fearless clean-up hitter who understands that each transaction is a huge deal to that client. A guy who likes being the Go-To Guy. I miss being totally unconcerned about financing. I need a clean-up hitter, who wants to be hitting when the game’s on the line. Who laughs at what others call pressure.
I need a guy who gets it.
Enter Brian Brady.
We met through the Bloodhound blog as fellow contributors. I was surprised to learn our offices were about 10 minutes apart. What would it hurt to break some bread? My son and I met with him at a local sports restaurant and had a cool couple hours with him. (Read his blog here – great stuff .)
He gets it. We talked about neg-ams, and some new hybrids, and sports, and all the things three guys talk about. But what I came away with was the impression I’d maybe met my clean-up hitter.
Since lunch he’s referred some of his clients to me for advice. I’ve now seen him with my clients too. Boom! They’re approved for far more than needed. There’s no wasted time followed by reasons for delay. The clients respond to him positively. He understands his business. That sounds silly, but until you’ve dealt with as many lenders as I have, you can’t know how rare that really is.
Go to BloodhoundBlog and read Brian. You’ll get the idea.
He gets it.
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