Building an investor-loan desk inside a shop that is mostly conventional

Question

Take a shop of four originators and a processor where purchase volume is holding but refi has largely dried up, and two of the four are living off a thinning pipeline. A steady trickle of calls comes in from owners with four to nine rentals wanting cash out, calls that currently get referred elsewhere because the shop is not approved anywhere that does DSCR or bridge lending. The stronger case is usually building the desk around one dedicated person rather than spreading it across the team. Lender approval packages take weeks, the guidelines look nothing like agency guidelines, and one person who genuinely knows a handful of private lenders' boxes will outperform several people who half-know them and blow up files. The harder problem is comp. A team built on a percentage of lender-paid comp is designed for consumer loans. When the same originator writes a business-purpose bridge loan charging the borrower points directly, that needs its own comp structure rather than being forced into the existing plan. Whether one dedicated person is the right call versus starving the desk of enough at-bats to build real expertise usually depends on how consistent that trickle of calls actually is month to month, and it is worth tracking for a quarter before deciding the desk needs more than one person.

Rena Expert · Accepted Answer

One person is the right shape for the first year, for a reason you didn't list. Private lender guidelines aren't published in a way you can look up, they live in the AE relationship, and knowing that lender C will go to 75 percent LTV on a rural duplex if the appraisal has two closed comps inside a mile is knowledge that doesn't distribute across four people. Split the desk once the one person is turning down files for lack of hours.

Comp needs a separate plan and it needs a lawyer's eyes, because your existing plan was drafted against Reg Z's LO comp rule and that rule reaches consumer credit secured by a dwelling. Business-purpose entity loans on investment property generally sit outside it, which is what gives you freedom to pay differently on those files. The trap is a plan that pays an originator more on business-purpose deals in a way that gives them a reason to characterize a consumer-purpose refinance as a business one. Occupancy and use are facts, and mischaracterizing them is the loan officer's and the lender's problem, then yours.

Unit economics to plan against: a $300k DSCR cash-out at 2 points is $6,000 gross, cycle 30 to 45 days, pull-through worse than agency. Compare $420k conventional at 1.75 lender-paid, $7,350, on a tighter cycle. Per file it looks like a downgrade. The repeat rate is where it pays. An investor doing four projects a year comes back four times and brings his lender-shy contractor, while your purchase borrower comes back in seven years if you're lucky.

Watch working capital. Some private lenders pay broker comp out of funding, some pay on a monthly cycle after funding, and a desk that's growing can be up 60 days on receivables.

monica_tran3 · Answer

The part that costs a shop the most time when it widens out usually isn't guidelines, it's that the referral base is a different set of people entirely. Conventional flow comes from agents. Investor flow comes from wholesalers, GCs, the title reps who close the assignments, and the local REIA. None of those people know the shop's name yet. Budget six to nine months of showing up before the phone does anything, and pick the person for the desk based on whether they'll sit through a Tuesday night meetup, not on production.

Building an investor-loan desk inside a shop that is mostly conventional

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