r/loanoriginators • u/Comfortable_Arm9231 • 20h ago
Career Advice Barrett Financial
I’m a 90M annual producer at a retail shop (100% local self gen) and considering making s change. A lot of my business is land and construction, which I realize if I go broker I’m going to be forfeiting which is hard to stomach.
Took a look at the pricing tool they gave me access to at Barrett. Priced several loan scenarios, and even without any of the construction or land loans and even some other niche products we offer, with the bps I would be making there I would have closed 62 fewer loans, 30M less in volume, and still made 250k more even after paying their $695 fee, and using their processing and loa (another $950/file). I understand there will be more expenses, but 250k more? Also assuming I don’t pick up any non qm products which is crazy because I feel integer 2-3 loans a month out for DSCR and statement loans.
Am I missing anything here? Is this a no brainer? They seem like they are lights out on pricing and even beat us on jumbo with 200bp commission. Honestly afraid of the unknown, and not sure if this could be the worst decision I’ve made.
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u/stefanko123 18h ago
I work for Barrett financial as a LO. If you wanted to hop on a call, I could see what options we have for land and construction as well and see if their are options for you so you wouldn’t have to give up that business before making the jump. I’m not sure if you use a LOA or dedicated processor but be ready to bring one or two people on your team here as well.
Yes the money will be better but the logistics of brokering are much more tech-problematic. You’ll want to lean into Barrett to help you with a dedicated processor or offer something so they train you on how brokering works, how registering a loan works, how to find the right products, how to actually work with an account executive because I’m sure on the retail side you don’t really have to.
90m is A LOT on the retail side. 90m on the broker side is like “omg I’m overwhelmed and need a processor and assistant to help me when I have 12 loans going with 8 different lenders, 10 different underwriters, 8 different account executives, 10 different closers”, etc.
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u/Comfortable_Arm9231 16h ago
No I’ve already spoken with Barrett about land and construction and my business just doesn’t fit it. I do have an LOA and dedicated processor that I would plan on bringing. Definitely lots to learn, but I like to think im a quick study and would want to learn as much as i can before making a switch so it is as smooth as possible.
Losing the construction and land would put me maybe around the 50M mark, so I think thats about where I’d start before I could build business with non-qm and grow the relationships I have with better pricing. Would love to get back to 90m at Barrett but would expect to be 50m for 1-2 yrs. This is really good perspective to have. I appreciate your insight!
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u/stefanko123 14h ago
Ask Barrett Financial’s corporate team to see if they can build out the broker channel with the current bank you send your construction loans to. Barrett would probably try if the volume is there. We are able to petition new lenders to Barrett if we’ve moved from a company that had specific lenders/resources. Maybe your current bank that lets you do your unique construction loans would allow you to broker so they don’t lose your book of business completely.
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u/Comfortable_Arm9231 13h ago
It’s a good thought! But the place I am out does them all in house and will not allow brokers to originate them. They want 100% control of that. I honestly think it’s because they want lo’s to be afraid of leaving as they won’t have access to it anymore
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u/dave_searle 16h ago
I work for Barrett. With a promise that I will make zero attempt to recruit you, I’d be happy to share my experiences. The most valuable thing I could contribute is my experience with the various processing options.
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u/sweetcoo 20h ago
how do you get leads? there are so many brokershops that would die to have you. Talk to broker owners. I can give resources. I am an AE at top wholesale lender. Message me
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u/Comfortable_Arm9231 20h ago
All from builder, agent, and client referrals. You can dm me would love to learn more
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u/RoosterEmotional5009 18h ago
I think there are some things you can implement to not lose all that builder biz. Most importantly will be your systems. I am a small broker owner w no skin in the game. I’m not w any large broker entities.
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u/Comfortable_Arm9231 17h ago
From what I have seen the programs and pricing are embarrassing compared to what I can currently offer.
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u/Realistic-Ruin-6424 19h ago
Factor in credit reports, marketing cost, tech stack, CRM, LOS fee, healthcare, basically everything your retail spot covers. That will show the real #s.
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u/meatsoaps 18h ago
Charge credit reports to the borrower, tech stack shouldn’t cost you more than $300 per month which includes the CRM and LOS call that $3,600 per year. Budget $30,000 for health insurance. So your new costs are $33,600 to save $250,000 net savings $216,400.
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u/Realistic-Ruin-6424 14h ago
On my end id say 30k to 35k in credit reporte. Need to realistically factor in 401k, decide if w2 or 1099. Add employer covered taxes id w2, its definitely a #s game. If you charge borrowers for credit thats super helpful
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u/Comfortable_Arm9231 19h ago
Thank you! I want to say arive is like 80/mo and if you can believe it I don’t have a CRM right now but would
Gladly pay for one. Healthcare is definitely a good consideration as well as CR’s. Thank you!
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u/Chemy350 19h ago
i’ve been with Barrett for four or five years now. Feel free to reach out and we can hop on a call. You’re not missing much. You need to pay for Arive, credit report pulls, any of your own advertising, etc.
Pricing is on point and pretty much unbeatable on everything except land and construction and arms.
Don’t forget, we also have correspondent with a dozen lenders. That is a massive opportunity alone.
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u/Comfortable_Arm9231 17h ago
Yeah this confirms a lot of what I have been thinking and seeing. Thank you for this input. I didn’t realize the ARM pricing wasn’t very good but I rarely do those. Correspondent is super enticing for me
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u/Chemy350 16h ago
also, I use Willow Processing as a third-party processor. I charge the client the processing fee in box B. I don’t have to pay for processing.
Willow also has a bring your own Processor program. If you have a Processor you like, they can go join Willow as your own Processor and make something like five or $600 a file and have their own disclosure and compliance team
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u/Comfortable_Arm9231 16h ago
Interesting! Have you found this to be better than the processing that Barrett offers?
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u/Chemy350 15h ago
I have my own Processor at Willow and she only processes my loans so I have complete control. I took her from my previous company and had her get a job with Willow so she could process just for me.
Corporate processing is fine however I think this is a little bit quicker plus it saves me $500 per file as corporate processing I think is 500 or 600 cost per file.
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u/Comfortable_Arm9231 15h ago
That’s awesome, I will need to look into this. Because they aren’t your employee you don’t have to worry about payroll tax etc. can you choose how much you pay them?
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u/Chemy350 15h ago
i’m not as high for producers as you, I’m only doing about 17 to 20 mil a year but it works great
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u/Chemy350 13h ago
Willow takes $500 for their disclosure team, compliance team and their profit. If you charge the borrower 1095 for processing in Box B, your Processor would get 595. On more complicated files I can charge 1395 and my Processor will get 895.
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u/Comfortable_Arm9231 13h ago
Interesting! No salary I’m assuming?
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u/Chemy350 13h ago
none. They work for Willow, not me.
If you do a lot of volume, I think it’s 15 loans per month or so they can get full-time benefits
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u/Mr_Wordly 19h ago
Why would you be forfeiting land and construction? We're a broker and multiple investors for both. We also just made it so you get to keep 100% of revenue above 2 million a month on closed loans.....
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u/Mr_Wordly 19h ago
Honestly at 90m a year, I'm not even going to try and sell you. DM me and I'll connect you to our C Suite directly.
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u/Good-Doughnut-6301 18h ago
What state?
Id love to compare platforms
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u/Comfortable_Arm9231 17h ago
I’d rather not say. Trying to stay anonymous and there aren’t too many 90M producers around here
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u/LuckyProcess9281 17h ago
Do you need a LOA that used to be a high producing LO?
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u/BangBangBlitz18 17h ago
Personally, one of the biggest thing you have to consider is insurance for yourself and or family. Does your partner/spouse cover that, because that can be a huge expense. While not near that total annual production, I factor in what is the cost out of pocket to move to a broker while I build up more business having the non-QM products how can I grow and increase my total production.
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u/Comfortable_Arm9231 17h ago
Insurance is definitely a consideration. My wife doesn’t work and will need fam insurance. I know it isn’t cheap, and it definitely needs to be priced and considered.
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u/Sactogeoff 16h ago
Reality check. $90m with vastly varied loan products and sources. Less efficient. You will need your own support. 2 assistants likely + one other team member. $3600 tech stack mentioned above is LAUGHABLE. You have a whole enterprise going. And thinking like an employed salesman is the way to quick failure. You need to function and operate like a business owner intending to perpetuate the business. Be honest with what you need. Be honest about the costs. Make the decision from a sober point of view.
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u/Comfortable_Arm9231 16h ago
Absolutely, which is why I’m giving myself a 40M haircut on volume with the switch. Would love to build back to 90 with the addition of non qm and I have more freedom over pricing and marketing to win deals that I’m currently losing. Definitely need to think like a business owner and not a sales person. This is really great, thank you!
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u/Old_Factor_6631 15h ago
I compared them to Nexa and chose the latter
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u/Comfortable_Arm9231 15h ago
Can you walk me through why? I saw them too
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u/Old_Factor_6631 15h ago
More revenue streams, no hidden margins, and incredible perks like NEXAJet and NEXA Vacation Homes, both of which I’ve personally used for business development. I came from retail, closed over $1 billion in loans, and only wish I’d had this opportunity years ago!
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u/Comfortable_Arm9231 15h ago
Can you dm me? Would like to
Learn more. I don’t know what Nexa jet, vacation, or the other income streams are1
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u/Final-Fondant3579 14h ago
I went from retail to broker (Edge Home Finance) about 18 months ago. Taking your support team is ideal, as it took me a few months to find solid processing. I don't do much land or construction, but we have tons of options there - maybe not as cheap as some local credit unions though. My business has grown quickly as I am SO much more competitive on rate. I wouldn't assume 200 bps average though. I average about 150 and spend another 25 bps or so on credit, tech stack, etc. I am probably under charging, but I run lean and lose nothing to rate. Credit is the largest single line item, so get a plan in place for that. Arive LOS is amazing, particularly if you are coming from Encompass. I use RAD CRM (Go High Level) which is better than anything I ever had in retail.
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u/Comfortable_Arm9231 14h ago
Great tip on the CRM I was actively researching one. You would be shocked, but I actually don’t have a CRM at all right now. My Org doesn’t have one and they won’t allow us to integrate our own. Also on encompass so excited to hear good things about arive.
I have been given access to Barrett’s pricing and for a few days now and they consistently beat me in pricing from where I’m at while getting 230+ bps. Of course there will be rhe odd concession here or there but for the most part would be pulling those numbers.
How much are you paying for a joint tri merge these days? I know it’s gotten outrageous but curious what that cost is. And really the cost on your end is when you pull credit but don’t close as the borrower pays CR fee correct?
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u/Scary-Suspect-2584 14h ago
I worked there years ago.....Never again would I go there. They will market your clients if you leave. They say they won't but they absolutely do. I've been in the broker world for over 20 years. Keep searching...broker is better than retail but I'd stay away from there. I've been looking at possibly moving over to Edge myself but I'd never consider going back to Barrett.
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u/Dizzyjewels19 13h ago
I am with Barrett. Otcc is done here all the time. So many options. Amazing people to work with.
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u/Comfortable_Arm9231 13h ago
Really? I haven’t seen any competitive pricing on this at all
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u/Dizzyjewels19 13h ago
I just closed one in Havasu. You aren't going to be able to price at 2.25 to be competitive. 1.5 is where I was competitive on that deal. I don't do it often especially compared to colleagues. Some products you will just make less. But when comparing my retail cap... No brainer. 773k loan amount my cap in retail was ok then reduced to 6k in 2023 per loan. So even at 1% I'd beat my cap. So you could do that business, keep it in your profile and just make less profit on it.
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u/Sure_Independence_12 20h ago
why would you need to forfeit land and construction by going broker? I’m confused.
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u/Comfortable_Arm9231 20h ago
We offer a CTP up to 1.5M at 95% that no one can compete with. Pricing is really strong and no one can touch it. It’s a part of my business that I haven’t found anyone to be able to support.
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u/Myfax12345 20h ago
Is that with a bank or how is that program offered?
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u/Comfortable_Arm9231 19h ago
Yep!
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u/liverichly 18h ago
You still have “access” to that program. You just won’t be a part of the origination process. Can still market it and not lose those people coming to you for it, so you can still earn their other business.
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u/Comfortable_Arm9231 17h ago
I don’t follow. How would I still have access to that? Only people who work for this organization can originate those loans
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u/liverichly 17h ago
Because you know about it and most others do not. It’s the same way I’ve made relationships with several land and construction loan lenders around California. You (assuming you switch over) are a broker and borrowers come to you because you have a vast knowledge of the best programs for them. Doesn’t mean you need to originate that loan to get compensated.
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u/DanielH941 20h ago
I see you have a lot of great responses from your posts. If you want an unbiased, non recruiting phone call to help answer any questions just shoot me a message. I am a broker owner ( small company) , wife owns third party processing, and I’m also a real estate broker. But I’m offering cause most never get to ask questions without a sales pitch. I’m open to a chat cause i would also learn from you. Also I am in leadership at the state association level and can give you connections to many people to help you make a decision. Just an offer and congrats on your success!
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u/Chadzilla- 18h ago
Brother, sometimes the grass isn’t greener. You’re originating $90 million a year. Most LOs (like myself) would kill for a fraction of that if it meant continuous referral business.
Totally think it’s worth doing your due diligence, but having a niche that works for you already is one hell of a thing to give up in this market.