On the surface, it would seem that 2008 was not the best year to start a mortgage lending business. However, Real Estate Mortgage Network in Kennesaw, Ga., opened its doors in February 2008, and those doors are still open. This week, MortgageOrb chatted with Dave Caudill, senior underwriter, on the challenges of getting the word out about a start-up mortgage lender.
Q: What have been the challenges of marketing your company, in view of the current economy and market?
Caudill: The biggest challenge has been adapting to the ever-changing environment. As a company, we have to be conservative, because there's no way to forecast when business will take off again. But at the same time, we have to find ways to give our customers something no one else is offering.
Q: How do you achieve that goal?
Caudill: While home buyers have read about how the mortgage industry has been shaken, they don't yet fully understand that their options have been severely reduced, so they still want as many choices as possible. Currently, there are fewer programs available, which mean fewer customers that will fit into those product types, and the programs that still exist are changing every day. Trying to find that balance between conservative and innovative is the biggest challenge we face.
Q: What marketing strategies do you use to get out the message?
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Caudill: The first thing we have done is keep our overhead as low as possible so we have additional funds with which to market. We've searched for the best deals on office space, and we haven't reached levels of overkill on equipment. We manage to a profit and loss and have gained an understanding of the meaning of every dollar spent.
Second, we've hired seasoned veterans with solid reputations for our sales force. The best marketing strategy we can create is to use the reputation of those who represent our name in the field. As big of an industry as this is, the mortgage market is still a small world, and reputation equals a decrease in spending.
Q: How have these strategies worked to your advantage?
Caudill: Keeping overhead low and recruiting a top-flight sales force has allowed us to promote three different business channels: retail, wholesale and consumer direct. When one of these channels is down, we have two other channels that can pick up the slack. By giving ourselves three options to create revenue, our profit margins aren't hit as severely as a company who has a bad month with only one channel.
Q: What are your goals for 2009?
Caudill: Currently, we are closing about $30 million per month through all three of our business channels combined. Our goals extend a little further than just 2009. Over the next 24 months, we would like for each of our three business channels to be around $100 million per month.
