fee for brokering? - Posted by Jim M.

Posted by Jeff Isaacson on November 14, 2000 at 07:21:00:

I have the same question. I realize that every deal is different. However, what would be an average range of fees for a straightforward deal? Would 1% of the outstanding balance be rediculiously low? Would 10% be gouging? I have heard of charging a 2% spread on the yield. Has anyone else ever heard of this?

fee for brokering? - Posted by Jim M.

Posted by Jim M. on November 13, 2000 at 17:31:57:

I am just getting started and am interested in brokering notes at retail until I can learn the ins and outs of this business. What kind of fee should I charge that would be fair on notes from $75,000-100,000? Should I deal with more than one company or several? Thanks.

Re: fee for brokering? - Posted by Rick Roberts - KC

Posted by Rick Roberts - KC on November 18, 2000 at 22:09:40:

Your fee will be driven by 1) your note buyers price to you and, as a result, 2) the amount that you can put on top of that discount. A caveat in this regard, is to be careful not to kill a deal with an unreasonable fee. Keep in mind that your rewards from closing a deal will be made up of the (obvious) fee PLUS the experience and knowledge that you gained in doing so. Many novice brokers forget about the second piece of the equation and walk away from deals that are too “skinny” for a substantial fee.

As Mike says, some will work with you for a flat referral fee. This is an attractive consideration as well.

Work with a patient and reliable funder or two…Don’t try to make a killing on every deal…Always carry out your transactions with high integrity…Strive to continually improve your understanding of the industry by reading and reinvesting your earnings in relevant materials…Stay focused and driven… A dynamite recipe for “newbie” success!!


Re: fee for brokering? - Posted by Ron Ohara

Posted by Ron Ohara on November 13, 2000 at 23:49:04:

There is no maximum or minimum fee. What you should be directed to is, what is fair. How much time and work will be needed in order to complete the transaction. This would help in setting the fee in each transaction. Since you stated that you are new, it is to your best effort to speak to several companies as to their services. This will also help in your choice of directing your business. After several transactions with various companies, you will see what companies serve your needs.

Ron Ohara
Capital 500 Funding

Learn While Your Earn… - Posted by Michael Morrongiello

Posted by Michael Morrongiello on November 14, 2000 at 13:29:12:

Your question is one that I hear all the time from beginnng brokers who are just getting started.

Essentially, you can charge whatever the market will bear and can negotiate between yourself and your note seller. However this is where many novice brokers tend to lose out on potential deals because they are mishandled or poorly negotiated. A fee of somewhere around 3%+/- of the amount being funded by the note funder is average these days, however as mentioned above some will charge more and some will charge less.

The other way many new brokers can work is to establish a “FLAT FEE” arrangement with their designated note funder. The note funder can work with the broker to walk them through the entire transaction process, the documentation gathering, negotiating phases, processing, closing, and funding procedures, etc. and essentially LEARN while they EARN along the way. These fees can be typcially $1,000.00 on up depending on the size of the note being purchased.

Many note funders will NOT work this way with new brokers as it is not effective for them to do so. However a few other principal note funders are more than willing to work in this fashion (We invite you to call us as we will work in this fashion).

Hope this clarrifies how one can be compenstated.

To your success,

Michael Morrongiello