Going Self employed with mortgages help

[Smithers82]

Hi, i've had enough of working for others, i want to go alone and be my own boss. I've been a mortgage advisor for about 8 years. 7 years at the bank where i was CAS and now at a brokerage where CAS isn't really spoken about but assume its still in place. I can get about £20k together to go on my own. My outgoings are about £2k per month.

Im just asking for help as I don't know where to begin. No lead source besides mithering friends and family for mortgages. I was looking at some companies that hire self employed advisors, where they provide some leads and you self gen some of your own as well, is that the right place to start until i generate enough of my own leads? I've heard terrible things about buying leads so this might be better and more cost effective. Also besides my own monthly costs what other costs do i need to take into account? Also i suppose this is the million pound question but where do people generate their own leads from?

 

[MBE2017]

Not my area of expertise, but from a general business perspective.

Your major concern is the length of lead time to making enough to survive on. Although you might think you have enough for ten months, you have to decide on a marketing plan, how much to allocate to help drive those leads. Then you will also need to allow for a potential downturn in the market, what if interest rates rise, as they are quite likely to do?

I would take your time, talk to plenty of more knowledgeable people in your industry before jumping ship atm. Normally when going self employed your costs are higher than anticipated, and your sales lower than expected. I imagine you will need various insurances etc as well.

Make a start with a cash flow forecast, it will only be guesswork atm, but you have to start somewhere. Then see how you are helped or hindered by say a 1% interest rate rise, how about 2%? For a little amount of research your eyes will become a lot more focused.

Best of luck btw.

 

[JEREMY HAWKE]

I agree with @MBE2017 a bit !

The reality of being in business is that you will always take risks ,sometimes big risks in the early stages !
It is not always a game where you can be nice and safe !

So its a case of how much you want it and do you have a realistic business strategy

 

[Mark T Jones]

Whilst you are still employed, take time to do loads of research - and also wait to see where the market is going (the indicators aren't great)

There are 3 things you need to know about in far more depth

1 regulation & compliance - this will probably be your biggest overhead and will undoubtedly be a big drain on your time.

2. Your niche it is absolutely imperative that you find yourself a clear and defined niche, otherwise your marketing will be a bottomless pit and you will never master point 3.

3. The lenders. Their preferences, foibles and processes.

As a broad point, the housing/lending market has been propped up for the last 18 months - a correction is kind of inevitable. Watch what other brokers do. Early warning signs of a tight market are price cutting and a desperate rush to do 'anything for anyone'. Both of these are happening in the lease broking market, I suspect mortgage broking will be close behind

 

[Smithers82]

Whilst you are still employed, take time to do loads of research - and also wait to see where the market is going (the indicators aren't great)

There are 3 things you need to know about in far more depth

1 regulation & compliance - this will probably be your biggest overhead and will undoubtedly be a big drain on your time.

2. Your niche it is absolutely imperative that you find yourself a clear and defined niche, otherwise your marketing will be a bottomless pit and you will never master point 3.

3. The lenders. Their preferences, foibles and processes.

As a broad point, the housing/lending market has been propped up for the last 18 months - a correction is kind of inevitable. Watch what other brokers do. Early warning signs of a tight market are price cutting and a desperate rush to do 'anything for anyone'. Both of these are happening in the lease broking market, I suspect mortgage broking will be close behind

Thanks for response, I’m regard to those points:

1. Regarding compliance this is why im suggesting going as an Appointed representative with another company as they would handle that side of things at first then when I’m generating enough business go alone with my own setup.

2. Niche area will be credit impaired, adverse and complex mortgages. Won’t make a huge difference if the market downturns as there are always these customers especially after lockdowns and furloughs etc and always business as a lot of brokers don’t like doing those kind of mortgages

3. Lenders, I’m well up on the credit impaired lenders and any others are more straight forward, and chat to BDM’s weekly and have a feel for the which lenders do which

I’ll come up with a business plan as MBE2017 and calculate if things go one way or another but besides that just thinking of anything else. The main issues are marketing as I don’t have a clue about that kind of thing and how to generate customers.

 

[Marbman]

The main issues are marketing as I don’t have a clue about that kind of thing and how to generate customers.

When it comes to your marketing first make sure you know exactly who your target audience is.

When you know your audience you will then have a much better idea of where these types of people hang out, either online or in the real world.

This will make it a lot easier for you to then decide what type of marketing platforms to use depending on the audience you are going after.

 

[Smithers82]

When it comes to your marketing first make sure you know exactly who your target audience is.

When you know your audience you will then have a much better idea of where these types of people hang out, either online or in the real world.

This will make it a lot easier for you to then decide what type of marketing platforms to use depending on the audience you are going after.

that’s fair i imagine credit impaired people will be a big target for Facebook so I should probably start there

 

[JEREMY HAWKE]

that’s fair i imagine credit impaired people will be a big target for Facebook so I should probably start there

Would most of these potential clients be a waste of time as nearly all of them would be unlendable

 

[Mark T Jones]

Would most of these potential clients be a waste of time as nearly all of them would be unlendable

There are varying kinds of impairment, including some that are defined, quantifiable and finite - eg medical, family or employment. And there are lenders who recognise this and who will look beyond simple stats.

The 2 big challenges for the OP will be

1. Having strong filters to avoid wasting loads of time on dreamers, nutters and losers

2 being red hot on compliance, because there is a massive correlation between defaults and complaints

 

[Chris Ashdown]

Don't forget every estate agent, Insurance brokers and solicitors has already got history with someone who does mortgages so they will have already hovered up most of the potential,

Without sales and marketing skills you will find it incredibly hard to get established

 

[Marbman]

Would most of these potential clients be a waste of time as nearly all of them would be unlendable

and skint probably

 

[Nick Holmes]

You're going to need to take into account your marketing costs. It can be as simple as printing thousands of leaflets to post through residents' doors in your local area to a website built and ongoing optimisation to show in search engines when users search for your occupation/service in your area.

You can build a cheap website with WIX, but it probably won't rank very well in Google because images cannot be optimised. So, it's worth spending time learning WordPress with a suitable theme. Then, diving into SEO. Alternatively, you can outsource it. A decent local website is about £1,000, plus ongoing maintenance. Then, SEO is on top. Quality SEO is £200 a month, minimum.

 

[Smithers82]

You're going to need to take into account your marketing costs. It can be as simple as printing thousands of leaflets to post through residents' doors in your local area to a website built and ongoing optimisation to show in search engines when users search for your occupation/service in your area.

You can build a cheap website with WIX, but it probably won't rank very well in Google because images cannot be optimised. So, it's worth spending time learning WordPress with a suitable theme. Then, diving into SEO. Alternatively, you can outsource it. A decent local website is about £1,000, plus ongoing maintenance. Then, SEO is on top. Quality SEO is £200 a month, minimum.

so far regarding Marketing the only things I can think of doing that might gain customers is my own website, google local business, Facebook page that features in local area by posting weekly and going round estate agents and other mortgage advisors to try and generate business. A lot of mortgage brokers don’t want to deal with complex mortgages as they are a lot more work and more challenging to do, so if I can convince them to send these clients over and they get part of the fee say 20% for not doing much then it’s a win win. There is also buying leads but that can be expensive and the leads can be awful so I’d rather not do that at the start. Any other things that might be worth looking into?

 

[Nick Holmes]

so far regarding Marketing the only things I can think of doing that might gain customers is my own website, google local business, Facebook page that features in local area by posting weekly and going round estate agents and other mortgage advisors to try and generate business. A lot of mortgage brokers don’t want to deal with complex mortgages as they are a lot more work and more challenging to do, so if I can convince them to send these clients over and they get part of the fee say 20% for not doing much then it’s a win win. There is also buying leads but that can be expensive and the leads can be awful so I’d rather not do that at the start. Any other things that might be worth looking into?

Social media is a slow burner; I don’t even use it myself. How much can you really post as a mortgage advisor unlike somebody that sells cakes. Reach out to mortgage brokers that don’t want some work and take it from them simply by emailing them. Google My Business and your website go hand in glove. I can’t add a more than this.

 

[Mark T Jones]

so far regarding Marketing the only things I can think of doing that might gain customers is my own website, google local business, Facebook page that features in local area by posting weekly and going round estate agents and other mortgage advisors to try and generate business. A lot of mortgage brokers don’t want to deal with complex mortgages as they are a lot more work and more challenging to do, so if I can convince them to send these clients over and they get part of the fee say 20% for not doing much then it’s a win win. There is also buying leads but that can be expensive and the leads can be awful so I’d rather not do that at the start. Any other things that might be worth looking into?

Reverse your thinking!

First, work out who your customer is - in this context the "customer' might be the introducing broker/agent or the end user

Then focus on where the hang out - physically and virtually and how they consume information.

Banging out your own version if a sales pitch through social media is mud-flinging some will stick but you will never really gain traction.

With regards to buying leads, personal experience is that they are garbage. When I'm approached by people selling leads, the first thing I do is try to engage them on how they are defining a lead - 85% disappear at that pojnt

 

[tony84]

You could join a network but they will want a business plan and "buying leads" might be a way to get onboard with a network but you have to sort of think about whether that is the way forward or not. I only started making money when I stopped buying in leads, but I know others who rinse leads. I think the general consensus is you need to spend a lot on leads to get your money back, I used to spend a grand and would struggle to make my money back.

In terms of credit impaired - you need to be careful with this. There are a lot of extra hoops to jump through with the FCA. Your vulnerable customers policy and procedures will need to be spot on. Your paperwork and processes will need to be tweaked.

We specialise in bad credit, it is funny actually as the last month I have not done one adverse case. They have all be straight forward first time buyers or remortgages and they have all literally flown through. I think I have done 7 apps and 3 of them needed no documents, 2 of them needed a signed declaration form. Only 2 of them did I have to upload any payslips/bank statements etc - I am beginning to think I am on the wrong side of the business! (joking kind of, I love what I do but it is so nice to get the odd easy case rather than every case being hard work).

You have plenty of experience so you should not have any major issues getting on board with a network if you want to create your own brand.

When I went and set up on my own, I worked for a bloke who paid me short and paid me late every month. The leads he gave me were rubbish, so I found myself having to generate my own leads. After 3-6 months of generating my own leads (proper leads I mean, not friends and family as they wont feed you forever) I realised that without the leads my boss gave me I would actually be better off. So why not see if you can generate your own leads now before you leave?

On a side note, I dont know about you but I am expecting next year to be relatively quiet. It feels like the whole country has moved in the last 2 years, I dont think there are many people left to move home.

 

[Smithers82]

You could join a network but they will want a business plan and "buying leads" might be a way to get onboard with a network but you have to sort of think about whether that is the way forward or not. I only started making money when I stopped buying in leads, but I know others who rinse leads. I think the general consensus is you need to spend a lot on leads to get your money back, I used to spend a grand and would struggle to make my money back.

In terms of credit impaired - you need to be careful with this. There are a lot of extra hoops to jump through with the FCA. Your vulnerable customers policy and procedures will need to be spot on. Your paperwork and processes will need to be tweaked.

We specialise in bad credit, it is funny actually as the last month I have not done one adverse case. They have all be straight forward first time buyers or remortgages and they have all literally flown through. I think I have done 7 apps and 3 of them needed no documents, 2 of them needed a signed declaration form. Only 2 of them did I have to upload any payslips/bank statements etc - I am beginning to think I am on the wrong side of the business! (joking kind of, I love what I do but it is so nice to get the odd easy case rather than every case being hard work).

You have plenty of experience so you should not have any major issues getting on board with a network if you want to create your own brand.

When I went and set up on my own, I worked for a bloke who paid me short and paid me late every month. The leads he gave me were rubbish, so I found myself having to generate my own leads. After 3-6 months of generating my own leads (proper leads I mean, not friends and family as they wont feed you forever) I realised that without the leads my boss gave me I would actually be better off. So why not see if you can generate your own leads now before you leave?

On a side note, I dont know about you but I am expecting next year to be relatively quiet. It feels like the whole country has moved in the last 2 years, I dont think there are many people left to move home.

thanks for that Tony. It all makes perfect sense.

I’ve had a few places reach out to me to work self employed for them and they’ll provide some leads as well as generate my own but i think the issue and my confidence problem I have is how to generate my own leads while working for someone else. Besides going round local brokers or asking for referrals what other options are there?

 

[tony84]

I do SEO on my website. The problem with that is it is a slow burner, I think it took about 8 months before it started to pay for itself and it is an ongoing cost every month. As soon as you stop you drop.

When I started out, I was always told to contact local estate agents. The problem with that is estate agents always have someone or if they dont, it is because they are greedy b******s and sell out to whoever will offer them the most, so it is a race to the bottom.

Accountants, solicitors, letting agents, none of them seem to refer much.
I think a lot depends on how much you need per month. When I started out, I only really needed about a grand. So one good case or 2 smaller cases a month would cover me. I used to get the odd lead off here, the odd lead I bought came good, friends/family etc. I had about 6 months where I only wrote about £2k in all that time. It was a nightmare, but eventually things started to click.

Presumably after 7-8 years people call you up for a remortgage etc? I am not sure what your contract is, but presumably some of those may follow you? Before you leave, you may be able to email your clients and say something like you are leaving, whilst you are no longer able to help them directly due to your contract with your employer, if they have friends or family who require any help with a mortgage to contact you on ....? I am not sure how that fits with GDPR though.

 

[Nick Holmes]

I do SEO on my website. The problem with that is it is a slow burner, I think it took about 8 months before it started to pay for itself and it is an ongoing cost every month. As soon as you stop you drop.

When I started out, I was always told to contact local estate agents. The problem with that is estate agents always have someone or if they dont, it is because they are greedy b******s and sell out to whoever will offer them the most, so it is a race to the bottom.

Accountants, solicitors, letting agents, none of them seem to refer much.
I think a lot depends on how much you need per month. When I started out, I only really needed about a grand. So one good case or 2 smaller cases a month would cover me. I used to get the odd lead off here, the odd lead I bought came good, friends/family etc. I had about 6 months where I only wrote about £2k in all that time. It was a nightmare, but eventually things started to click.

Presumably after 7-8 years people call you up for a remortgage etc? I am not sure what your contract is, but presumably some of those may follow you? Before you leave, you may be able to email your clients and say something like you are leaving, whilst you are no longer able to help them directly due to your contract with your employer, if they have friends or family who require any help with a mortgage to contact you on ....? I am not sure how that fits with GDPR though.

You're absolutely right that SEO is a slow burner. But, not so about dropping when you stop. A client of mine stills ranks in the top three positions 5 years after I did the optimisation for him. If you're doing itself and it's dropped, ask yourself what you haven't done right.

 

[tony84]

I paid a company who did a very good job. It is nothing what I or the firm has done wrong, it is more a case of new companies coming to market and throwing the money at it. I stopped mine in March last year, it took about 5-6 months to start dropping but it dropped. I am sure we can claw some of it back in time, but at the minute I am happy enough with where we are.

 

[Nick Holmes]

I paid a company who did a very good job. It is nothing what I or the firm has done wrong, it is more a case of new companies coming to market and throwing the money at it. I stopped mine in March last year, it took about 5-6 months to start dropping but it dropped. I am sure we can claw some of it back in time, but at the minute I am happy enough with where we are.

I understand the context now. Often, leaving SEO alone works incredibly well on the basis that competition doesn’t become as savvy as you. If good backlinks we’re built, even with a lower domain authority, but incredible content, your site could have stayed where it was regardless of what the competition tried to do.

 

[Smithers82]

I paid a company who did a very good job. It is nothing what I or the firm has done wrong, it is more a case of new companies coming to market and throwing the money at it. I stopped mine in March last year, it took about 5-6 months to start dropping but it dropped. I am sure we can claw some of it back in time, but at the minute I am happy enough with where we are.

Thanks for this. If I go self employed with a company that will supply some leads is there anything you recommend I look out for or to stay away from? I don’t mind taking the plunge but like when you started the place you went to was poor and will take me longer and I have limited funds to cover me while I get started.

 

[tony84]

In fairness, the place I joined, he could have said he would keep 90% of my commission. As I did not have CAS I would have taken the deal.

But I dont know really, just see what sort of vibe you get from the place.

 

[Smithers82]

In fairness, the place I joined, he could have said he would keep 90% of my commission. As I did not have CAS I would have taken the deal.

But I dont know really, just see what sort of vibe you get from the place.

Fair enough. Thanks very much for the insight into it all. I’ll definitely be going self employed at some point soon and how hard it seems to get customers I will probably have to join a business and build my own pipeline from there.