Brady Day has learned from challenges: Along with his partner, he founded Minnesota-based First Class Mortgage in 2006, just as the Great Recession was brewing. Seventeen (17) years later, the business is thriving.
Day credits the success to the nascent nature of the business as it was being launched. “We were very fortunate in that we were still in the infancy stage of our business,” he told Mortgage Professional America during a telephone interview, referencing partner Casey Van Winkle. “We didn’t have all these employees. We didn’t have much overhead. And quite frankly, because we were still in the infancy stage of our business, we really didn’t have the experience of making money yet. We were just trying to grow our company.”
Can a new business survive a recession?
That lack of investment turned out to be a blessing in disguise, he suggested. “In hindsight, it was actually the best thing that could’ve happened for our business because it [the Great Recession] changed the whole dynamic of the industry at that point. Because we were so small, we were very nimble and could make changes that for big companies could be very difficult. We could pivot very quickly and make those changes. A lot of competition got out of the business – and I think we’re seeing that right now. There are some that are getting out and when we have these boom cycles, the real professionals stick around and then there are opportunities for them who stick around.”
Many solely sought to capitalize at that time, he noted: “A lot of people had gotten into it that maybe shouldn’t be in the business. It separated us from the pretenders, so to speak. Others that were in the same time period probably were used to making lots of money – they had a lot of overhead and their own personal expenses in their life.”
The fact that both he and Van Winkle were unencumbered youth – 29 and 24 at the time respectively – didn’t hurt either: “Quite frankly it was the time of life when we were both young too. When you’re young and dumb, you don’t have all those expectations yet.”
Van Winkle buttressed the sentiment during an earlier interview with MPA. He described how he dabbled in sales before teaming up with Day to launch First Class Mortgage in February 2006. “I saw mortgage origination as a real opportunity to not only make a good living but help people. I had a skill set that fit nicely in doing mortgage origination,” he told MPA. “I was very outgoing, hardworking and had a lot of personal drive. Seventeen (17) years later, Brady and I are the top two originators in the state of Minnesota.”
But back during the Great Recession, it was a time to hustle, Day said. “We kind of saw it as an opportunity that if we didn’t work really hard and work the competition then all of those gloom-and-doom stories you’d hear – we’re going to be one of them. We just had to get out there and hustle and survive. A few years later, there were refinance booms because the rates had dropped.”
Prior to entering the industry, Day had a job selling radio airtime in Bismarck, N.D. “It gave me a taste for outside sales,” he said. But it wasn’t what he envisioned for himself, he added: “I knew I always wanted to run my own business,” Day said.
“My stepbrother worked at Wells Fargo Financial at the time,” he recalled. “I was kind of into that. It was dealing in big numbers and mortgages and homes. And I thought that sounded really exciting versus selling radio airtime, which is nothing – there’s nothing tangible there. With advertising, I always thought you’re selling this idea – whereas with a mortgage, if I sell this product this is how it performs, and this is exactly what’s going to happen. I ended up moving into the Twin Cities in Minnesota and worked with a company called Household Finance Corp. back in the old subprime days.”
Still, he has no regrets: “It was a great way to get into the industry because it taught me a lot about marketing and selling and different mortgage products. Eventually, an opportunity came up when I ran my course there,” he recalled, noting he had by then achieved the title of branch manager. “My dad had passed away and I was looking for a change and didn’t like the direction of that company and where it was heading.”
That’s when he discussed launching a business with Van Winkle, who was working in pharmaceutical sales with Eli Lilly [and Company] at the time. “At that time, I was buying my first house and having my first child,” Day recalled. “I had all these life events happen all at once. Looking back on it being older now, I’m like ‘jeez that was kind of bold to do all that at once’. I’m glad I was able to take that leap of faith.”
Indeed, the industry has been good for him and Van Winkle judging from posted volume the past few years:
Van Winkle: Total units: 724. Total volume: $204 million.
Day: Total units: 730. Total volume: $185 million.
Combined: Total units: 1,454. Total volume: $389 million.
Van Winkle: Total units: 729. Total volume: $213 million
Day: Total units: 730. Total volume: $189 million.
Combined: Total units: 1,459. Total volume: $402 million.
Van Winkle: Total units: 251. Total volume: $85 million
Day: Total units: 252. Total volume: $74 million.
Combined: Total units: 503. Total volume: $159 million.
What is the benefit of corporate philanthropy?
Not a bad tally. It should be noted that volume last year was down industrywide with the advent of higher mortgage rates. In acknowledgment of their success, the business partners pay it forward in the community where their vision was forged.
To that end the company donates some 450 turkeys for residents each holiday season. Moreover, the company participates in the community celebration dubbed Maple Grove Days, sponsors a marathon through the Lions Club and donates to the Peace of Mind housing fund. Day expressed particular pride in the latter given that he and Van Winkle were the first to donate years ago in its nascent stages with a contribution of $10,000. Since then, the fund’s coffers have grown to $250,000, he noted. “That’s something we’re really proud of starting and seeing how it’s grown,” he said of the fund, which secures housing, food and transportation to families in crisis.
“Business has been very rewarding for Casey and me financially,” he said. “So when you get those benefits we come from a place that it’s an obligation to give back.”