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One mortgage professional explains the process of hiring new loan writers and integrating them into his business.
Speaking to The Adviser on this week’s Elite Broker podcast, Adelaide-based broker and Smartline franchisee Michael Karp outlined his goal of writing $60 million next year, a target he says is achievable with the help of a new recruit.
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“I put on a loan writer in my business about three months ago,” Mr Karp said. “The reason being that I want to take more than a week off! Also, I feel like I want to give a little bit back as well. The arrangement I've got with him is that I will guide him and mentor him towards being a business owner.”
The new broker is a former personal trainer, says Mr Karp, “an Adelaide boy” who was working in Melbourne as a broker and also had a few years’ experience under his belt as a loan processor. Keen to return to his hometown, Mr Karp took an interest in the ambitious mortgage professional.
“I saw a lot of me in him, and I really thought: this guy's going to own his own business,” he said.
“So many people are out there trying to hold people down so that they can make money out of them, you know? They end up in trouble and caught and all the rest of it, and I thought, "You know what? Here's a guy who probably needs four or five years of really strong mentoring, and after that he will be a real gun, and who am I to hold him back?"
The new recruit has been working in Mr Karp’s Adelaide office for six months. “I've offered him a base salary. It's a small base. Then he gets a higher percentage of up-front of what he brings in, and a lower percentage of work that I give him,” he said.
Mr Karp’s ultimate goal is to mentor the broker and show him how to make his own business. “It's not about me feeding him,” he said. “It's about me mentoring him so that he can actually make it all happen for himself. Then at the end we've agreed to negotiate on the sale of his book from me to him. The risk-period for me is probably the first 12 to 18 months.”
Together they’ve agreed on a five-year term, at the end of which they can negotiate on the book anywhere from four years onwards.
“It gives me enough time to get my money back, and also get a little bit of value out of him and maybe take a couple of holidays during that time, and it gives him the opportunity to build a reasonable-size book so that when he does decide to buy the book, he'll have a really decent trail to start from.”
[Related: Ambitious broker offers top tips for customer retention]
