Why this new-to-industry broker turned away his first deal

Speaking to the Elite Broker podcast, Mr Sum explains how he decided to make the move: “I’d been working at various fund managers for the past eight years. But at the same time, I invest in properties. I started investing in my first property back in 2009 and basically just kept on going.

“So, I got to a stage where I was thinking: ‘I've got all these properties, all this knowledge behind me, why don't I do something that is related to property? Something that I know I like, [something] I live and breathe every day’.”

The new-to-industry broker reveals that after considering becoming a real estate agent or buyer’s agent, he settled on becoming a mortgage broker.

He explains: “I feel that being a mortgage broker is very interesting and one of the reasons is because of my own experience [using one for investment loans]… After I became a broker, I understood that there's actually a lot of stuff that happens at the background that customers don't see…. So that's when I made a jump, I basically quit my job in April last year and became a mortgage broker.”

The nitty-gritty of becoming a broker

Mr Sum had begun researching mortgage broking in October 2015, and then undertook his Cert IV before approaching aggregators and brokerages to find out what his options were.

He says that, for him, the main concern and main challenge was sourcing leads.

“I had no experience in the mortgage industry before. I had no connections. I didn't even have a pipeline, so I was basically thinking of going to those franchises or even joining a mortgage broking company to work for them,” he says.

“Also, at the same time [I was] looking at options… should I actually give it a go and start my own thing and try to look for leads myself, try to build up my own circle of network?”

The Let’s Do Mortgages founder said it took “a good four or five months” before deciding to start up his own company and build his own networks.

However, he says that only around 10 per cent of his clients are sourced from his networks, with the vast majority coming through referral partners like real estate agents, financial planners, and solicitors.

He adds: “I only met [my referral partners] in the past year basically… I was just going out there, going to networking events. I think [in] my first two or three months that I started lodging loans I was out maybe three or four nights a week, just going to events, going to networking functions, meeting people.

“Whenever I knew that people would buy a house I would actually go with them to sign the contracts so I could meet the real estate agents,” he says.

While Mr Sum has been running the company for over a year now, he acknowledges that it took a while for him to feel comfortable enough to write his first loan.

“After I quit job in April [2016], the first three months I didn't even go out to look for any leads or write any loans. In fact, my first deal I turned away because [for the] first three months I was just reading bank policies; I wanted to make sure that I was familiar with everything.

"The last thing you want is to get an opportunity or get a lead, someone trusts you, and then you stuff it up.”

After reading all the different policies and LMI details, as well as creating fake scenarios and trying different calculators to see which banks would service what loans, the new mortgage broker wrote his first loan in August 2016.

“I remember [for] the first loan, I probably spent like eight hours to 10 hours just studying it,” he says, “making sure, triple checking, quadruple checking that I've done everything right”.

He adds that he knew he would need to rely heavily on the business development managers (BDMs), which was a key aspect of how he chose his aggregator (Vow Financial).

“In terms of choosing an aggregator, it's basically [about] feeling comfortable with them, looking at their systems (like the CRM system), and, obviously, fees are important —  but fees are pretty standard anyway across a few aggregators — [and] what support they give you.

“At the end of the day, your BDM will help you the most when you've got issues or even if you've got questions,” he says. “So, you just want a BDM who knows their stuff, who actually will return e-mails or return calls. That's the important thing for me… I even sent all the documents [of my first loan] to the BDM, I filled out the calculator and I asked my BDM: ‘Hey, did I do everything correctly? Did I stuff anything up?’

“I was like pretty nervous because, obviously, you want it to work because it's a boost of confidence [and] you want to grow the business.”

Mr Sum says that, all in all, he thinks he spent close to 20 hours on the first loan he wrote, which — given his background as a property investor — was, perhaps unsurprisingly, for an investment loan.

In fact, investors now make up around 80 per cent of his business and have helped his settle around $7 million in less than a year.

Looking to the future, the fledgling broker so he wants to continue to grow his mortgage broking business in terms of residential lending, but expects that investor clients will remain his bread and butter.

New Broker Academy event

Are you a new-to-industry broker wanting to unlock the skills and expertise to future-proof your career? The Adviser is hosting a free bootcamp for new brokers in the first two years of their mortgage broking career.

Taking place in Melbourne’s convention centre on Tuesday, 11 July and in Sydney Dockside on Thursday, 13 July, the New Broker Academy will run from 8.15am to 4.35pm and be jam-packed with tips, tricks and case studies to help you reach the top of your game.

We will reveal:

• The essential planning blueprint for the first 18 months of broking;
• Strategies around budgeting and transitioning from a salaried job to a commission-based career in finance;
• Common new broker mistakes and how to avoid them;
• Proven strategies to find and keep clients;
• Marketing tips and tricks;
• The best ways of building referral partnerships;
• How to harness technology to improve efficiency;
• The importance of choosing the right mentor; and
• How to avoid burnout.

CPD points will be available for MFAA and FBAA members.

Places are limited at the New Broker Academy, so please register to secure your place.