.png)
Summary
Alex Hernandez highlighted the challenges of being a loan officer, including burnout from a lack of purpose for production, and shared their philosophy on building wealth beyond production by acquiring real estate to cover living expenses. The core strategy, confirmed by Michael Moh, involves using income from loans to aggressively pay down the mortgage debt on investment properties, starting by minimizing personal debt and fixing income to avoid increased spending. This method creates a compounding effect that quickly scales wealth, allowing Alex Hernandez to connect production goals directly to the residual income needed to pay off mortgages, providing purpose and long-term financial freedom.
Details
- Challenges and Rewards of Being a Loan Officer Alex Hernandez highlighted that while being a loan officer is amazing, it can be extremely difficult, often leading to burnout. He attributed burnout to not having a large enough reason for chasing production, recalling a recent difficult $220,000 loan where the calculated dollar per hour was very low. Despite the difficulty, they emphasized that the mortgage lending industry is accessible, requiring less upfront investment and schooling compared to other careers.
- Philosophy on Building Wealth Beyond Production Alex Hernandez's philosophy focuses on building wealth beyond the cycle of producing loans simply to earn money and spend it, which many loan officers get stuck in. They explained that production alone, even high levels like $10.2 million in a month, feels "empty" because one is only as good as their last month, emphasizing the need for a bigger purpose. The goal is to reach a point where doing loans is a choice, providing financial freedom to avoid working with undesirable people or challenging agents.
- The Strategy of Buying Real Estate The core of Alex Hernandez's wealth-building strategy is acquiring real estate and using the income generated from those properties to cover living expenses (the "house account"). They stressed that while everyone in the industry knows how to qualify clients for loans, they should also apply that knowledge to buying real estate for themselves. Alex Hernandez’s flow involves earning money from loans to pay down mortgage debt on investment properties, while living off the income those properties produce.
- The Importance of Fixing Income and Managing Debt Alex Hernandez advised fixing one's income to avoid the trap of increased spending when earnings rise, which often leaves loan officers vulnerable during bad years. They suggested starting small by minimizing debt, such as paying off credit cards and cars, to align living expenses with the initial, smaller income generated from a first investment property. The goal is to dedicate a percentage of production earnings to living expenses while prioritizing the remainder to rapidly pay off investment property mortgages.
- The Compounding Effect of the Wealth Strategy Alex Hernandez demonstrated the scaling potential of the strategy, illustrating that by aggressively paying down the mortgage on a first property with production earnings (e.g., $220,000 applied in one year), the property can be paid off in under two years. Once the first property is paid off, the freed-up production earnings can be immediately used to pay off subsequent properties faster, creating a snowball effect where one could own two properties free and clear within four years. Michael Moh confirmed the plan to "buy another property" after the first one is paid off, recognizing the value of the residual income.
- Connecting Production Goals to Residual Income The wealth-building method shifts the focus from chasing production targets to calculating the necessary production needed to pay off debt and meet real estate goals. Alex Hernandez shared their personal goal-setting approach, stating that the $10,000 a month generated by their storage facility dictates how much production they need to pay off the $850,000 mortgage note. This approach provides a clearer "purpose" for daily work and long-term financial insulation from market fluctuations.
Want more live calls like? Join the LO Accelerator Community
Join hundreds of Loan Officers. We have hours of FREE material and courses for you to trasnform your MLO business.
