All Forum Posts by: Charlice Arnold

 Hi Jay, Thank you for responding to my post. In my research, I found that it is legal to pay referral fees for commercial loans, not residential loans. 

Is it legal to pay referral fees for commercial mortgage referrals?

Yes! Even in states where a license is required to broker commercial loans (California, Florida, Nevada, Arizona, etc.), you can legally pay a referral fee on a commercial mortgage loan, as long as the referring source does nothing more than call you with a name and phone number of a prospective borrower.

However, if the referral source — say, a commercial real estate broker — starts to negotiate terms (rate, points, term, etc.), then he is working as a commercial mortgage broker. In those states requiring a license to broker commercial loans, the referral source is now breaking the law. Therefore, don’t let your referral sources gather documents for you or issue loan quotes.

When is it illegal for a mortgage broker to pay a referral fee?

Under RESPA (Real Estate Settlement Procedures Act), it is illegal to pay a referral fee (called a kickback) on a residential loan. A residential loan is a mortgage loan on a house, condo, townhouse, duplex, triplex, or four-plex. In the parlance of the Federal government, such loans are called loans on one-to-four family dwellings.

How do you structure your referral programs to ensure they are mutually beneficial? What kind of rewards have you found to be most motivating for your partners? Let’s share our strategies and learn how to make referral programs work for everyone involved.

For those who have run or participated in referral programs, what strategies have you found most effective? How do you ensure that both the referrer and the client benefit from the program?

As fellow lenders in the real estate space, we know how critical it is to support our clients in turning their construction projects from dreams into reality. But let’s be honest, the process isn’t always straightforward.

What’s the most common challenge you face when offering construction loans?

Let’s connect and discuss how we can collaborate or simply share knowledge to improve our industry!

What’s the biggest hurdle you’ve faced when starting a new construction project?

Share your experiences in the comments! Let's discuss how others in the community have overcome similar challenges.

We offer a variety of loan programs, including our popular Fix & Flip Loan, which provides up to 100% financing for purchase, rehab, and closing costs. Our goal is to support investors in transforming properties and achieving their financial goals.

If you're in the real estate space or thinking about diving in, I’d love to connect and share how we can help you succeed. Feel free to reach out anytime, or visit our website for more information.

Are you ready to take your real estate investments to the next level? Our Fix & Flip Loan offers up to 100% financing on purchases, rehab costs, and closing costs, making it easier than ever to maximize your returns.

And that's not all! We also have a unique joint venture opportunity for 100% financing of fix and flip projects up to 70% ARV. If you're looking to dive into your next project with full financial backing, this is the perfect opportunity!

Ready to transform properties and see your investment grow? Contact us today to learn more about how we can support your real estate success.

@Nicholas Williams Let's connect. Would love to be of help with your current or any upcoming deals. 

@Richard Pennington Let's connect. I specialize in fix and flip, rental, bridge, refinance, multi-family and new construction loans.

For those who have explored or utilized such financing options, what has your experience been like? What should first-time investors be aware of when considering these types of loans, and what tips would you share for navigating the process successfully?"