Taking the next step

Dale Bilton has run one of the country's most successful commercial mortgage operations for several years. He tells CMP why he decided now is the time to expand and merge

Taking the next step
As any commercial broker will tell you, that segment of the business is as time-consuming as it is rewarding – one deal can net you an absurd amount in commissions, but it can also cost you months of hard work. And there’s always the possibility that large-scale files will fall apart after all that hard work.

With that in mind, Dale Bilton, who has been one of the country’s leading commercial players for more than two decades, decided it was time to enlist some help. So he merged with Michel Laval, who also runs a DLC franchise, Winestone Laval.

“The reason I joined was because he has a full underwriting department, which, being a smaller broker, I didn’t have,” Bilton says. “I did all my deals myself from start to finish, as did all my brokers. Now with [Winestone Laval’s] underwriting department, it’s a big help for both commercial and the $500 million in funds we put out for residential mortgages.”

A miracle deal
Bilton made the decision to merge after years of striking out on his own as a commercial broker, learning the ropes as he went.

“I wanted to do commercial mortgages – I had to do residential to keep an income balance, but gradually became a commercial specialist,” he says. “Becoming a commercial specialist, I had no mentors to really work with and help me figure out how to put commercial deals together. Really, finding the appropriate lenders for the many different kinds of commercial properties was just trial and error. That [was] the start of the challenges. After that, figuring out how to finalize a deal – it’s all different than working on residential deals.”

And commercial deals are certainly challenging. Bilton points to what he considers his most rewarding deal – it’s a story of a tough-to-fund property type and a strange lender/buyer dynamic that miraculously worked out.

“I was referred by a lawyer to an industrial building for sale that the buyer wanted to convert into a church; it was a $5 million property, and the buyer had a low down payment,” Bilton says. “I got together with the pastor and the financial planner for a two-anda- half-hour meeting, and the financials just didn’t work. They said they’d pray for me to do the deal.”

Bilton personally believed there was zero chance he could get the deal done, but nevertheless he shopped it around to lenders.

“I went to more lenders than I normally would,” he says, “and the last lender I approached was an atheist who swears more than a drunken sailor. He wanted to take a look.”

The private lender, Bilton and the pastor met for dinner – a dinner Bilton had to properly groom the lender for. The pastor had only $200,000 to put down on the multi-million-dollar property, but just when it seemed like the deal would never happen, a $1 million donation came in that helped save it.

“That was my most rewarding deal that never should have happened – it was a miracle,” Bilton says. “I do a lot of church deals, and I always tell clients that story when I’m working with tough files.”

Going commercial
It’s unique deals like the one Bilton experienced that draw residential brokers to the commercial side – that, and the promise of lucrative commissions. Bilton has some advice for those brokers.

“Get a good relationship with a good commercial broker you are comfortable with and you trust,” he says. “As you co-broker deals, you can figure out how to do the deals on your own eventually. When I do a deal with others, they try to figure out how not to do a deal with me the next time. You have to learn the rules of the jungle.

“I think the really dedicated brokers will continue to do well,” he adds. “However, there will be new challenges thrown at us every day from the lenders. You have to accept the challenges and face them and come up with new solutions. The challenges will be where a lender has their own issues in how they would have lent previously, and they aren’t able to lend that way now. [You have to find] new sources to replace those situations, but that’s a huge opportunity to do that.”

Bilton also argues that today, more than ever, the mortgage business requires absolute focus from brokers.

“It’s going to continue to get more difficult to survive,” he says. “You need to focus 100% on this industry; don’t try to wear too many hats. Hopefully you have your base and you continue to market yourself seven days a week.”

Another challenge Bilton sees is the issue of ethics in the industry. He argues that the profession needs to up its game overall, and that there needs to be a crackdown on those brokers who don’t have their clients’ best interests at heart.

“The lenders need to be cautious with what brokers they deal with,” he says. “They have to weed out the unethical brokers quickly. There always has been an issue, and there continue to be too many unethical brokers. They are desperate, and when people are desperate, they will bend the rules and break them. It’s really annoying how certain people will take advantage of clients. You’re not going to survive for long if you’re unethical, but it hurts the brand and the industry.”