[Secret!]

Barriers to Entry

Back when I wanted to go out on my own as a broker and open up my own shop, there were many hurtles I needed to jump over and several significant barriers to entry which would tend to keep a lot of riff-raft out of this industry. Virtually every young broker like me that I met, had previous portfolio institutional lender training - not like today where most have no previous lender etc.experience/ training. Therefore they lack the values and mind-set a portfolio trained person has. Back then, unlike today they knew the long term value of only putting together good quality transactions, instead of that's the wholesalers problem!

First off you needed to spend anywhere between $20k to $40,000; sign a multi-year term commercial occupancy space lease, buy and/or lease office furniture fixtures and equipment. Lobby furniture, plants, clocks, pictures, desks, chairs, tables, bookcases, faxes, copiers, computers, typewriters, staplers, chair mats, pens, pencils and many other supplies to get started once you were licensed. That's called owning a 'real' business and having career goals.

Next the credit bureaus had their field people inspect my location, it needed to meet certain confidential standards, because not just any Tom, ***, or Harry couldn't pull credit reports, so the location needed to be acceptable and I needed to qualify and get approved by them. Many were rejected.

After that I needed to get approved to do business with the various wholesale funding sources I liked, just because I had a transaction for them, meant ZIP - they were picky about who they would accept loans from, so the quality would hold up! Little or no experience? Then you had no business dealing with credit applications and packages, can got rejected - thus no access to credit reports and no access to the money the wholesalers coveted.

The model has changed a lot since then, now days no license, and working out of a furnished apartment, no experience, no training or industry education, and handling the most important financial and emotional transaction in the lives of most American families is left up to just about anybody with no investment and virtually nothing to lose. These three barriers alone are pretty much gone now - the industry has done to itself; that's resulted in many problems.

Many of these individuals poking around in the unsupervised darkness, have caused the industry to have the black eye it has today - a roll back to the basics in many areas is long overdue for things to significantly improve. We don't need more laws and regulations, more enforcement surely is long overdue - plus extensive training and industry education is a good place to start from right now to get things headed back the other direction