Discover Innovative Financing: 7 Ways to Enhance Your Real Estate Income

Dylan Silver (00:00.898)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show I have returning guest, Michael Vallee. Michael is a seasoned real estate entrepreneur, but we’re gonna be talking today about realmortgageoriginate.com and OneRealMortgage. Michael, welcome to the show. Welcome back to the show.

Michael Vallee (00:23.997)
Yeah, really appreciate being back on the show. It’s exciting and looking forward to this topic that there’s things are brewing in the real estate market.

Dylan Silver (00:33.868)
You know, we didn’t get a chance, because we hit it off so well in the previous podcast, to really get into the meat and bones of what it is that you do. But you have very interesting model with OneReal Mortgage. Let’s dive in there.

Michael Vallee (00:49.469)
Sure, So a little bit about my background. I am, although I am a real estate agent, I come from corporate and I’m an entrepreneur and really a real estate investor. I’d like to kind of summarize it with kind of a purveyor of passive income. Like I really believe that the greatest commodity or thing that we have is our time, you know?

And so I’ve always believed that that is our most valuable asset. It’s time, it’s not always, and it takes money to buy freedom and all that things. And some people aspire to have the nicest car, the biggest house, and all that stuff kind of in an American dream. But I’ve always believed that ultimately it’s time freedom that is the new currency in the modern day world where

You know, people are able to travel at a younger age when they’re actually able to do things. So that’s what kind of led me here. So I’ve always been studying different kinds of business models. And when I was in the corporate world, I knew right away that I was trying to figure out how to replace that income without needing to be there and ultimately end up in freedom. that has been the case for the last 10 years. I haven’t needed to be with any…

certain place, time or whatever, but I do find that I function better when I’m actually working on a project, helping other people, engaging my mind and challenging myself. think I just am in better place.

Dylan Silver (02:26.392)
Yeah, mean, I think being able to have that economy of time, most people, I’d say, I hate to say it, but most Americans really don’t even consider it, especially in their early working years. It’s like, let me just grind out these next 25 years, and then maybe I’ll consider enjoying life a little bit.

Michael Vallee (02:41.757)
Yeah.

Right, right, yeah. And real estate’s a great vehicle for that, right? Like, as the number one way towards wealth creation, freedom is just a byproduct of generating enough income that comes in when you don’t need to be there that can over, that can cover whatever your monthly expenses are. You cover that number and you are free.

And essentially that can be done through real estate, be done through selling subscriptions, affiliate marketing, a lot of different ways. And that’s what kind of led me when I saw this mortgage model, I knew immediately that this is a great vehicle for the times and for what’s going on. you know, they say success is where opportunity and preparedness meet.

And maybe I wouldn’t have seen this younger in my younger years, but when I saw this model at a national convention, I sat down with some the mortgage division of Real Broker, the one real mortgage guys, I immediately saw the power of this. And and what we’re talking about here is in the real estate space, we’ve seen some companies that are massive, like EXP, like Real Brokerage.

That have grown to seventy five thousand plus agents real real brokerage is twenty seven thousand plus agents fastest growing real estate company in the United States and Towards the tail end of last year. I saw this Model in the mortgage space and I and we all we’re seeing things in the press about there’s a lot of disruption going on in the loan space you see Rocket mortgage

Michael Vallee (04:36.071)
that is acquiring Redfin. There’s some other major conglomerates that are acquiring companies, investor companies, purchasing these tech real estate companies and squeezing out and trying to marginalize these models by getting rid of submittal men. I think that’s the ultimate play. And so there’s a challenge in the space in loyalty and such. And so that’s what led me to

This model when basically I saw in the, so there’s real estate, the brokerage side, there’s the mortgage side, and they were sharing with me, basically these guys were like, hey Michael, you you interested in doing some loans, working with us, whatever? And I was never really interested in the loan space, but they said, you don’t need to be a loan expert initially, you can just refer your deals.

to us to an internal loan partner so they broke out the loan officer role into two components a loan expert, internal person and a deal maker, external person like me. So we can help you if you follow these few simple steps which is going and getting your 20 hour course and licensing. You can get compensated on your own deals. So traditionally a real estate agent just refers out

their buyer to a loan officer that they’re not affiliated with, but OneReal Mortgage has set it up to where you can actually get compensated on the loans that you generate and split those with your internal partner. Now there’s some steps that we won’t necessarily get into how that all works, but it does involve getting licensed. It does involve being with the same company so that you can split that compensation. So that was the first thing. And then the next thing was is that they said that

You can also all of a you’re going to be a loan officer. You can do business with any real estate agent. You can do business with any aspiring home buyers. And then then they shared with me the model that really got me excited. So what one real mortgage has done is they’ve set up a they call it level up program but it looks a lot like a rev share program. So we’ve seen E.X.P. and real that has grown.

Michael Vallee (07:01.295)
Exponentially, only 9 % of the real estate companies are this cloud brokerage, team building, word of mouth kind of growth models. And OneReal Mortgage has set that up on the loan side. So I’ve seen that EXP has grown to where it has, but at one point they were a hundred people just trying to make their way.

Dylan Silver (07:23.424)
EXP is unbelievable. I actually had a guest on the show who was a big realtor in Texas and he’s like I’m with EXP and I kind of had this understanding like you you had to have lots of people underneath you in order to work for EXP. He’s like no I’ve got one person underneath me. He’s a top performing one of the top performing real estate agents in Texas. I ended up joining EXP actually this week. I officially got on boarded with them and the stuff that they have the technology is mind-blowing.

This exp world thing. I don’t know if you’ve ever seen this it is Ridiculous like it is a actual like you have a character like a RPG almost style You’re walking through this virtual brokerage. There’s outdoor areas. You can walk up to people ask them questions There’s like transaction coordination rooms instant feedback crazy

Michael Vallee (07:57.363)
Yeah.

Michael Vallee (08:15.869)
Yeah, I was with the EXP for two years and so I really liked the model when I saw it. It’s great. So And then I did end up shifting to real for for some different reasons. It’s a very, you know simplified model just kind of a cultural better cultural fit so Yeah, so on so we saw what the EXP did they grew from this, you know beginning part with rev share

to now, know, 10, 20 years later, they’ve got this massive organization, right? And so the same thing happened at Real. On the real estate side. So I see this, so history tends to repeat itself, so I see this happening on the mortgage side. And to be with OneReal Mortgage, they don’t mind if you’re with EXP, Remax, Keller Williams, it doesn’t matter. They’re broker agnostic, you know, it doesn’t matter.

It’s just no different than a real estate person going and getting their insurance license with State Farm or something like that. So that’s okay. So I literally see this window of opportunity. We see all the disruption in the market by the big consolidations of Rocket, Redfin, things of that that are going on. Companies are looking to create sustainable, profitable models and loyalty in the marketplace.

Dylan Silver (09:24.568)
Yeah.

Michael Vallee (09:45.073)
So what this did, yeah, so I just see this window of opportunity towards building these massive teams and now is the time to lay the foundation and sow those seeds so that they’re going to grow. we basically, we can help any real estate agent, team, brokerage get compensated on their own loans is step one. Step two is do loans for other people. And step three is build a massive organization of what they call level up.

You do get compensated when full-time loan officers join your team and do deals, whether you’re there or not. So it’s very exciting.

Dylan Silver (10:21.838)
So for people who are maybe like myself, I’m getting into real estate as an agent, I’ve been a wholesaler, and I’m trying to learn the real estate game. Would I be a fitter? Would someone like me be a fitter? Do we really have to be ready to do this full time as a mortgage producer?

Michael Vallee (10:39.229)
Well, what it does is there are some thresholds that, because there are costs to bringing people on, there’s no, that the company incurs. So there are certain thresholds and maybe we have a conversation after this about what those are and what that would look like to help you get set up to that. I just see this as a nice add-on and going from being in a real estate role to having a real estate.

business. I’ve already done two of these deals this year where $400,000 transactions as a real estate agent. I made $10,000 from the real estate commission side and then I made an extra $2,000 per deal on the loan officer side and the process looked very much the same. Basically my client needed to get pre-approved. I handed him my loan application link and then introduced him to my internal

team member partner and she was basically customer facing with him. So it looked a lot like the model of referring out a loan that you wouldn’t be compensated on, that you’re not affiliated with. So just another way to monetize real estate business in a time when costs are rising and stuff.

Dylan Silver (12:02.638)
I’m still a new agent, right? So lot of these questions are from my relative ignorance. Are most people when they’re exploring lending options and then we’re looking at getting a mortgage, is their first stop to a trusted advisor to someone that they know? Or is their first stop to like Google?

Michael Vallee (12:22.195)
There are different types of consumers. I would say that there’s some of them that might go out there and try to shop the best rate or go to their bank. That’s possible. But I would say that for a lot of real estate agents with their relationships with their clients, the client asks them, who would you suggest we get along with? Because it’s not something that they’re doing all the time.

There is a lot of relationship and trust with the agent. So the agent actually steers a lot of things. Where escrow goes, if they get a home warranty or not, who they go for for insurance. The real estate agent spearheads a lot of this because they have the strongest relationship with the client. then, yeah. I think, and what’s happening traditionally is the real estate agent

is just sending a deal to a loan officer. You know, not getting compensated, but they’re directing the deal and just really hoping that the loan officer doesn’t botch up the deal, does what they say they’re gonna do, and perform so that the real estate agent can get compensated on the real estate side.

Dylan Silver (13:38.764)
And I guess in some places, in some states, you can’t do both sides of it. But, you know, when I think about it,

I’m trying to see the downside because I’m thinking, you know, if I’m going to this person, they’re going to show me homes or I may be using them to buy a home or to make an offer on home to list my home. And they can also qualify me and help me cover the finances. That seems like better customer service than me having to go to someone else entirely who doesn’t know me, doesn’t know what I’m looking for and then go through the process with them as well.

Michael Vallee (14:15.079)
Yeah, it’s kind of a one-stop shop. People are busy. They don’t want to be pushed off to somebody else. And what you’re able to do when you are overseeing the loan is you’re actually able to control the communications a little better. You have better visibility into what’s happening. But you’re right. There are, there’s like nine states that you can, that…

It’s called dual capacity is the legal, is a technical name for being the loan officer and the real estate agent on the same track transaction. Obviously it all needs to be disclosed to the client, but you even though you’re disclosing it, they’re really interfacing with your internal partner. So the, yeah, the, the nine states that don’t allow for it are Connecticut, Louisiana, Maryland, New York, North Dakota, Ohio, Utah, West Virginia and South.

So in those, you could be one or the other, but you can’t be both on those, in those states.

Dylan Silver (15:19.394)
You know, it’s an interesting study and a lot of this really does interest me because when you think about buying homes, what’s the most difficult part of the process? I think it’s getting qualified, right? So right now there’s an ongoing joke between a lot of people in real estate and outside of real estate that it almost feels like it went from anybody can get a home earlier on in the 21st century to then it’s a blood sample and we need the name of your next of kin to get. But I’ve also met so many

great lenders and folks like yourself who really break down the process and explain, there’s these options, credits here, this is what we can do, you know, okay, even if we can’t work out something right now for where your situation is at right now, this is where you need to be, these are the steps that you need to take, let me stay in touch with you, let’s work this and let’s set a goal versus, I think a lot of people have this experience of, you know, going to somebody, it doesn’t work out and then, okay, well now we’re done and then you kind of never hear from them again.

Michael Vallee (16:19.495)
Yeah, I think that a lot of people actually are afraid to even ask the question or to make themselves vulnerable enough to even explore it, right? But like the audience with Investor Fuel, a lot of real estate investors, they have a problem. And the problem is that they have real estate expenses that drive down their income. And so now all of sudden, from an income standpoint, their taxes

look like they don’t make any money but they’re making a lot of money but they just don’t show wealth because they’re not sitting in a cubicle as a W-2 employee. That’s what the banks want. That’s what the banks want. So they have a DSCR loans that there’s different ways to get people qualified that are in the real estate investor category. obviously, I’m doing mortgages to do loans ultimately but you know.

So the building the team part is kind of a phase two or a bigger picture thing. today, now, DSCR loans for investors are a great way to continue to build their empires.

Dylan Silver (17:32.782)
Those loans are kind of mind blowing to me because I think about people, you mentioned it, how many real estate investors do I know who make no money, right? And it’s not because they don’t make any money, it’s because they want to show that they make no money, right? You got to play the game to play the game, right? So if you’re in the process of playing the game and you can’t qualify because your income shows on your tax return that you made no money, then what do you do? DSCR loan, I’ve been hearing this term and I’ve been seeing this term and I think it’s only going to get more popular.

I’ve been seeing a lot where maybe sometimes there’s a limitation you can only get a certain number of units on it But I think we’re gonna see more and more of that

Michael Vallee (18:11.719)
Yeah, yeah, yeah, a lot of creative financing. You know, and I’ve done a lot of creative financing deals on my own as an investor, so I think it does help me in my role as a loan advisor. You know, I’ve done seller carrybacks, sub twos, know, lease option purchase, like every scenario, as real estate investors know, real estate investing is really just about problem solving.

you know, whether it’s how you’re remodeling the house, how you’re structuring the financing, for how long. I mean, every scenario is a little bit different.

Dylan Silver (18:48.982)
Absolutely. think about my journey and I think about meeting folks like yourself who one connection can change the game for you. So if you’re in one of these states where you have the opportunity to do both sides of it and you have mentorship, folks like yourself along the way, it is a huge game changer because now instead of saying, well, I have to refer you to someone else, well, no, I can actually help you. There’s actually probably not too many people who this applies to. I would think that there would be more.

that there would be more because everybody who’s going to a real estate agent needs someone to help them with the finances portion of it. But it’s not all that common. I mean, the space is ripe for innovation. Talking with folks like yourself, it’s pretty cool to see that these types of things are happening. But we are coming up on time here. Michael, what’s the best way for folks to learn more about this opportunity?

Michael Vallee (19:41.971)
Okay, so I put together a landing page at RealMortgageOriginate.com and it’s just a quick overview and it’s also a way to get in touch with me if somebody had different questions or wanted to find out about that. know, because really we’re looking for, you know, helping real estate agents make more money and they’re essentially doing the same thing as well as those that want to build out a team for their own.

rev share on the loans loan side.

Dylan Silver (20:16.012)
Very cool. Michael, thank you so much for coming on the show today and for sharing this opportunity with the show.

Michael Vallee (20:23.399)
Great, great being here, Dillon.