What constitutes as a valid lead for commercial financing is a matter of opinion. Some business plans are designed to generate large numbers without regard to a specific need or vague loan parameters. This shotgun approach can result in large amounts of time wasted sifting through to find that one viable request.
To others a lead is a filled out form. Even further for some, it is not lead until the credit has been pulled.
I feel it’s safe to say that most will consider a form filled out to be a workable lead. Now how many people do you need to contact for an application and how many applications to close a loan.
The answers are up to you and how hard are you willing to work. You can go through 1000 random people to get a filled out form, or you can go through 100 that are more targeted. Most use the rules of thirds to set goals.
One third of those reading your marketing will self eliminate through some basic bullet points and information. Of the two thirds left one will wash out during the application process either found something better, changed their mind or simply ended up not meeting the criteria.
In theory of the one third left something should close. Because commercial real estate can sore into some very large numbers some may only need to close a deal a year depending on their financial needs and size of the loan.
Again I feel safe to say that as an average 1-2 deals a month would be acceptable for most out there. Lets shoot for 2 a month. Using your currents numbers plug in your formula.
So ideally I would like to generate 20 applications a month. This is what I would consider a good number. 1/3 of those would be presumed dead right way using some screening based on loan parameters. Leaving me with about 14 apps. Of those about 8 will wash out for one reason or another. Leaving me with about 5 or 6. Using my rule of thirds 1 or 2 should close.
Who fills out the application is the important part. I want someone who has read my loan parameters. Hopefully I have spoken with them on the phone to make sure they and I understand what they are looking for and if it is even workable. Also I have a niche and will stick to it as much as possible. I would say in general I need about 30-40 people to generate those 20 apps.
Remember these are just theories and general opinions. In general I am not one to chase carrots no matter how big the deal is. I rather find what fits my parameters rather that making myself meet their needs.
Roberto
Commercial Loans Connected
Helping principals and mortgage brokers.
916-847-7212
unusualcommercialloans@gmail.com
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