July 19, 2016
We are actually referring to commercial hard money/bridge loans in this article and the previous one titled: Hard Money/Bridge Loans. In the previous article, I wrote about what these types of loans are and possible reasons for needing one. I cautioned investors not to get involved in doing hard money/bridge loans unless they have experience in it, or have an investor partner with experience. It’s not for the new investor to do on their own without hands on mentorship, because it involves more risk (including that it costs more than a conventional loan) and it involves 2 loans you need to pay for, as well as it takes more knowledge than a typical conventional loan.
In this article, I will be stressing that it is incredibly helpful to be mentored in doing a commercial hard money/bridge loan. You can expand this to any kind of commercial loan. And you can extend the concept of mentoring to all important aspects of life, including how to have a good marriage, how to raise cooperative – creative children, and even how to be happy.
But, my primary focus in this article is mentoring having to do with commercial hard money/bridge loans. Without having the correct knowledge, skills, and experience, you risk failure, which includes loss of money, and time.
- Be willing to learn from the best in doing a commercial hard money/bridge loan. Learn from those who are knowledgeable and have lots of experience. Actually being knowledgeable and having lots of experience are nearly synonymous. Those who are among the best made many mistakes (some of them could have been costly). Why not get mentoring in order that you can avoid many of the same mistakes. A mentor can guide you and help you spot potential mistakes, and possible failure. When I use the word mentor in this article, it could be a partner investor. It could also be a commercial loan officer.
- Be willing to follow the directions fully that your mentor gives you. Your mentor has taken years to learn his craft, and to try to experiment with doing things differently, especially when you are new in something - such as commercial hard money/bridge loans – can lead to doing things incorrectly and poor results. Some people have an attitude that they want to do things their way, and they don’t want to follow someone else’s guidance and expertise. A great attitude in having mentorship is, “Show me how – I want to learn how you do it.”
- Actually, be willing to be a copycat. Just copy what your mentor does. If you’re first learning to fly a 747, you don’t say, “Hey I’m going to invent a new way to fly this 747. No. You follow the manual. You follow the exact directions of the pilot who is teaching you. This is also especially true when you are first starting out in sports or playing a musical instrument.
An example of how this applies to commercial hard money/bridge loans is in costing and estimating expenses for a large commercial rehab hard money/bridge loan. Costing and estimating accurately is a very challenging skill, especially if you lack experience. Most people who attempt costing and estimating and have no experience, and little guidance, miss the mark quite a bit in under-estimating costs. For example, a major rehab project is estimated by a beginner to be $1,500,000. Once the project is completed, the cost ends up being $2,150,000. The difference between estimation and actual cost nearly sinks the project.
- Become great at duplication. This is very close to the concept of being a copycat.
To duplicate means making an exact copy of. In your mind, and on paper (when needed), make an exact copy of the steps your mentor takes to complete the different parts of a hard money/bridge loan, or whatever project being worked on.
Contact us to see if you pre-qualify for our best multifamily, commercial, bridge, construction, or business loan rates and terms. Also, contact us if you would like to discuss your particular commercial lending needs, or if you have any questions. Call 214-695-7310, or send an email to email@example.com
Bruce Painter, Director of Marketing, Business Loan Store