Niche brokering. It’s a lesson many mortgage professionals are anxious to learn and now there are five of the CMP Top 50 willing to teach it at this month’s Mortgage Summit.
“In 2011, our originations from real estate investors surpassed 50 per cent of our total volume,” Dave Butler, of Verico Butler Mortgages Inc., told MortgageBrokerNews.ca. “In 2010, it was roughly 40 per cent. My single best determinant regarding sales success was listening to Peter Kinch many years back and concentrating on being a niche broker. I felt that Peter was correct in his assessment that real estate investors were a very underrated and under-marketed block of potential clientele.”
Butler will, in fact, present a master class on brokering for property investors at the upcoming Mortgage Summit, May 31 through June 1. Four other top performers drawn from CMP’s annual ranking of brokers by funded volume will lay out details on other niche areas.
The focus on generating a significant portion of your book from a particular segment of the market isn’t new. Neither is the criticism.
A number of industry veterans remain committed to the single-family residential market despite what CMHC calls a dwindling number of first time-homebuyers in Ontario and Eastern Canada. While new purchases have also slowed across much of the West, Vancouver brokers are also contending with the highest home prices in the country. That, coupled with the highest occupancy rates in years, is discouraging potential buyers from entering the market.
No. 7 on the CMP Top 50, Butler personally struck 509 deals in 2010 last year for a funded volume of $122.2 million and has managed to steer clear of those obstacles in large part because of his portfolio of property investor clients. That group has been just as successful in exploiting historically low interest rates and the glut of inventory now driving down prices in key markets.
“It doesn’t take a genius to figure out that your average client might need your services for their mortgage every two to five years,” said Butler, a six-year veteran of the industry, “whereas a real estate investor may need your services for five to 10 different mortgages per year. How hard is it to close a deal for a client 10 different times in the year if you already have all his documents on file from previous deals?”
It can, in fact, be significantly higher, argues Dustan Woodhouse, another high-volume broker, with Dominion Lending Centres Canadian Mortgage Experts. He’ll lead his own master class at the Mortgage Summit. Mark Goode of Orillia and Calum Ross in Toronto will do the same.
“Investor deals are generally more involved and complex,” Woodhouse told MortgageBrokerNews.ca. “I think a look of brokers may not have the depth of knowledge needed to do these deals.”
Butler doesn’t necessarily disagree, although maintains that tapping into the real estate investor market is a straightforward and potentially lucrative process.
“Brokers break into this end of the business by doing their homework,” he toldMortgageBrokerNews.ca.
Click here for more information and to register for the Mortgage Summit.