Working with luxury home developers can lead to some unexpected and highly lucrative business opportunities. When a mortgage broker closes a $2 million-dollar deal, most will know exactly how much commission they’ll earn, down to the last penny.
Here are 3 ways mortgage brokers have increased their income exponentially, on top of earning high-level commission when the mortgage funds:
- Debt vs. equity or a combination of both. Working with luxury home developers opens up all kinds of ways you can structure a deal. Projects can be financed 100% by using other people’s money (debt/mortgage), but where it gets really interesting, is when you structure the deal to allow the lender & mortgage broker to receive a percentage of equity. When the project is complete, and the homes start selling, you share in the builders’ profits.
- Purchasing real estate at below asking price. Again, when you are working with a luxury home developer, or any developer for that matter, you can get creative on how you structure the deal. One option is to negotiate the purchase of “x – amount” of units to be sold to yourself and/or the lender at a discounted price. For example, if the builder plans to release the first phase of units for, say, $900,000 each, you negotiate that he lets you purchase one for $700,000. When the home is finished, you have the option to sell it for a tidy profit. Full case study on how to do this is taught at the Toronto workshop on Sept 25th, save the date!
- Help take a business public. One broker recently helped secure a $32 million-dollar commercial mortgage for a business that required land + building for an extensive agricultural project. If you’ve read the news recently, you’ll know that growing marijuana is a hot topic in Canada right now. Without getting into too many details, it’s all about who you know and how you can connect people with each other. The mortgage broker was not an investment banker, but after analyzing the financials for the mortgage approval, he offered to help take the business public. High level contacts he’s made within the industry and the level of trust and respect the business owners had when he closed the mortgage, allowed him to negotiate a very nice contract: “x-amount” of shares in the company when the IPO is completed. The mortgage broker can simply sell his shares, or, hold onto them as part of his overall investment portfolio. In this scenario if the IPO goes through, the broker stands to make over $1.5 million-dollars.
We cover ways to generate substantial additional income and outside-the-box thinking extensively in the Luxury Home Mortgage Advisor course. The very first in-class workshop is taking place in Toronto on Sept 25th, at the Hazleton Manor (99 Peelar Rd. Concord, ON), from 9:30am – 4pm. Lunch and refreshments will be provided throughout the day. Course is approved by Mortgage Professionals Canada for 4 CE credits in professional development.
Space is limited to 50 participants – if you are interested in attending you can register online here: https://www.luxuryhomemortgageadvisor.com/events