What is your competitive advantage?

Question

Mortgage and real estate finance is extremely competitive. The same borrower you spoke to a couple of hours ago may have already signed an LOI and paid for an appraisal by noon.

What is your competitive advantage as a loan originator? How do you win business in a market where everybody is offering the same thing?

Andrew Lee · Answer

My competitive advantage is that I help investors make better decisions.

I'll tell a borrower when a deal doesn't make sense. I'd rather lose a loan than put someone into a bad one.

That approach has earned me far more repeat business than chasing every deal.

Dana Mcnerney · Answer

Communication, educating, instant approval, 21  daymax guarantee to close.    I never sell rate. Never

Simcha B Shedrowitzky · Answer

Our biggest competitive advantage is a mix of asset-first underwriting speed and absolute transparency upfront.In a market where everyone technically has access to capital, the breakdown usually happens in communication and delivery. We focus on two things to win repeat business:

• Property-First Underwriting: We qualify the deal strictly on the asset's cash flow (DSCR) or the after-repair value (ARV) for flips, completely skipping personal tax returns or W-2 checks.
• Upfront Pricing Clarity: We give investors the ability to build an instant, un-blinded preliminary term sheet. They know their loan structure, estimated cash-to-close, and fees before ever pulling credit or speaking to a loan officer .

Erik Estrada · Answer

Well said!

Building relationships with other lenders, brokers, agents, etc.. is always fruitful. I have seen some deals that I honestly would not be able to figure out on my own, nor will I have the time to learn it and provide a great service to the client. This is why it is super important to partner up with other like-minded professionals that have the same passion and drive for their expertise. Not only will you get more business, but you will also have valuable connections for your own deals as well.

Mike Klarman · Answer

Private Money will always have its own competitive advantage over institutional because of speed and narrow decision making pipeline, it can and will be expensive though.  No such thing as some private lender putting their money out there for 1 point and no fees.  I think people get that idea sometimes.  You will pay for the "private" in Private Money, but as Jay described if you can get a carousel effect going and the PML is just taking a return on their capital and not a chunk of the profit then it's all about speed.

It is not easy to build a fast, profitable conveyer of assets that you can burn and churn with a PML.  Not impossible, by no means easy.  You have to know where to buy and what to buy.

As far as brokering loans goes there's lots to look for as a borrower.  From my experience my clients want speed, clarity, accessibility as staples.  Good Brokers know their lenders.  Each lender works different.  Different docs, different process, different timelines.  You have to know where a lender gets choked up: Underwriting, processing, intake, closing (a bad closing team is terrible for a loan).  A broker is supposed to be the big 300 pound lineman in front of the running back with the ball, clearing the path, making it easy to run.

But I am in a nightmare situation right now.  I have a STR refi going on in rural NY.  The appraiser made remarks in the report that had the underwriters have some questions.  Well, guess what? The appraiser was in some serious accident and needed spine surgery.  No one can get to them.  The lender wants a whole new appraisal.  Another 800 for the client.  I didn't know this but apparently another appraiser just can't take over and answer the questions.  You'd have to start from scratch with a new appraiser or wait for the current one to come out of intensive care.  And the client is mad at me.  This is another thing you need to be good at.  Taking blame.  As the broker, the client never deals with the lender.  I'm the lender by proxy so I get the blame and the "disappointed" emails.  You wanna say "Hey, it's not my fault."  But that won't work them feel any better, probably worse.

So now I have 6k in commission up in the air because I do not know if they will go for another appraisal.

Nicholas Floyd · Answer

My competitive advantage is knowing that not every borrower fits the same funding box. I work on the business funding side, so when traditional real estate financing doesn’t cover the entire need, I can sometimes help investors access additional capital through business lines of credit, 0% APR business credit, revenue based funding, equipment financing, and other business funding options.

I also believe the best relationships are collaborative. A mortgage broker may have a client who needs additional liquidity for reserves, renovations, operating expenses, or their next project and I may have a client who needs a mortgage or real-estate-specific loan that belongs with a mortgage professional.

To me, the advantage isn’t trying to be everything to everybody. It’s understanding the different funding lanes, knowing lender requirements, and building relationships with professionals who can help the client when the need falls outside your own lane.

Jay Hinrichs · Answer

No appraisal I am the appraiser  no underwriter to fight I am the underwriter

No layers of fee's to pay only pay me for success.. all loans are accrual loans no payments

And if we are liking each other and have multiple successful deals I become your capital partner IE my money you do the work my fee stays the same I dont take profit on top.

And call me monday and if I like the deal I will fund on Friday wholesalers dream.  Got one today were lender could not get it together I will close it on thursday.. now granted title is already done.. the only thing that holds us up is title work.

PS I am only talking about bridge BRRR loans not long term or DSCR I leave that to the 1000 brokers out there.. we lend our own money.

Teddy Sutton · Answer

Our edge is speed and certainty, and both come from the same thing: we underwrite to our own guidelines.

We are not waiting on a correspondent or outside investor to sign off, so we can give a real answer fast. And because we control the guidelines, we can lock the rate on day one, before appraisal, before full docs.

In a market where everyone's offering the same rate, the borrower isn't picking a product. They're picking who moves fast enough to actually close. Speed to a decision plus a locked rate on day one is how we win the deal before someone else does.

Chris Seveney · Answer

this is a great question because we at one time were trying to branch out and do more loan originations and it did not work out for us. the reason, i don't believe, is that we had a competitive advantage. we went back to what our bread and butter was, which is buying loans on the secondary market, because there is significant competition in the origination space. you definitely need to have a great reputation, a great network, and a way to find a competitive advantage. those that can find that will succeed.

Nicholas Floyd · Answer

@Erik Estrada

Exactly. That’s one of the biggest advantages of having the right network. No single lender or professional is going to be the best fit for every situation. On the business funding side, I see the same thing, one client may be a fit for a line of credit, another for a 0% APR business card, SBA funding, or revenue-based financing. Being able to recognize the right lane and connect the client with the right resource ultimately gives them a better experience and creates more opportunities for everyone involved.

What is your competitive advantage?

What is your competitive advantage?

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