Need Advice -Should I quit my job and go full-time into RE investing? discussion

General Real Estate Investing
1

Any insight or advice would be appreciated…

I graduated college 1.5yrs ago and I have a really good job right now in medical device sales. I have the potential to make 6figures in just a few years and live comfortably, and then maybe move onto something else from there.

However, I’ve always had the entrepreneur spirit and cannot even imagine being an employee for more than 2 more years.

…at what point should I leave my 9-5 and go full-time into real estate investing? I don’t have much saved right now, but I don’t have many expenses either. I want to learn everything I can about real estate, but it’s difficult to do when you can’t devote 100% of your time to it.

I don’t have any financial backing, so if I screw up, it’ll take a lot out of me to get back on track. Has anyone been in my situation? When did most of you go full-time into real estate investing? Did you start from scratch? What do you advise for someone like me who wants to go into real estate full-time and work his way up?

I have experience right now as a bird dog and with short sales. That’s about it. My major bread and butter if I go full-time would be to continue being a bird dog and keep any real good deals I get for myself. I live in an over-priced market so its very hard to make money off rental incomes right now. I don’t know what the future of the real estate market holds (of course, no one does), and that is a major factor is going full-time into real estate investing. I don’t want to hit a plateau or be lost or be broke… or have expenses draining my savings with no income coming in…

please share your thoughts/experiences…

2

My thoughts, is that these things are somewhat contradictory. If you have an entrepreneurial spirit and don’t want to work for someone else, you have to except the pressures of being “the Man”. That means facing the fact that you could go broke and lost. The fact that you are now without safety net drives some to succeed, others to curl up into a ball and cry for mommy. If you don’t think that you can face the pressure of everything going against you and still get up in the morning with fire in your belly to find a solution, then you need to retain safety (your job), and ease into this until you are sure you are going to succeed.

My 2 cents,

DB

3

i go through the thought of quiting my job everyday. the only thing that stops me is that i want to leave on my terms. when i have enough income from REI that i can just leave and it won’t affect me.

on the other side, i feel if i were just thrown in and forced to suceed in REI to make a living in REI…that I would somehow find a way.

…as of now, im still at my day job…writing this response from my cage (aka - cubicle)

ryan

ps - i live in northern nj (morris county). if you’d like to network, drop me a pm or email with some info about yourself.

4

Most people say to start full time REI when you make more money than your regular job. If I were you I would save up enough money to buy enough properties to live on then keep working your a$$ off until you live very comfortably.

Adam

5

I am in a similar position as you. I have a job that pays me very well here in NY, but I don’t love it and have always had a passion for real estate.

Now, no one can responsibly advocate to quit your job and get started in REI. The premise of buying and selling is simple enough, but the business is by no means easy and there is much to learn before you are well seasoned. However, depending on the individual, your level of determination, and some planning, I believe you can certainly succeed and beat the curve.

Pesonally, I am quitting my job in a few months and moving to North Carolina to do this full time. But I have a big advantage. I am possessed in my determination to succeed in the business at whatever cost and my wife and I are staying with her parents because they have the space and are thrilled to help. It will be temporary of course, but we could easly spend a year there without ever paying rent or utilities if we had to. Our overhead will consist of a car payment, insurance, gas and a cell phone bill.

Obviously, you need some working capital to succeed and I won’t make the move until I have a good $40K-$50K in cash. To get me there, I designed a website to capture leads and started using Google AdWords to drive traffic. So far it’s been generating about one lead per day. Also, I attended a boot camp recently where I compiled a nice networking list of investors (a.ka. = potential buyers). As a result, I am closing on my first deal in two weeks with a projected net of $18K, I am working two short sales with a partner and have made offers on two other REO properties in North Carolina. Once looks very promising, but we’ll see what happens.

There are obviously other issues to consider like qualifying for loans, and other funding hurdles. But there’s always hard money if the deal is right and if you have very good credit scores, you can still qualify for no-doc loans at 80% LTV as long as you have cash reserves.

Point is, you get what you put into it. Want to get there faster? Work harder than the next guy. Plot a course, stick to it and I feel you can accelerate your progress. Start wholesaling, and then tackle an easy rehab to increase your net profit. Once you start stockpiling reserves, things will open up, but you must stay committed and focused until you reach your goal.

6

I made a half a$$ effort on REI when I was working full time and had that comfortable job. I decided in September that it was time to quit that job and take on REI seriously. Talk about a motivating factor!! We have enough to get us by for a while, but taking that risk is exactly what I needed. Not saying that this is what’s needed for you but it worked for me.

7

The time to do something semi-risky is now as opposed to in the future when you’re saddled with financial obligations and perhaps have a family’s well-being to think about.

Also, I totally agree that, sometimes, the very reason that you will succeed in real estate is because you’re so close to going broke that you get motivated to do things that are perhaps outside your comfort zone. As long as you have a paycheck coming in from a normal job, it’s possible that you won’t take the steps necessary to really ramp up your real estate business.

Having said that, if you’ve managed to get a few things going in real estate on a part-time basis while you’re in sales, why not continue to do that for a year or so and put away enough money to live on for six months? If you had, say, $25K in the bank, you could probably get by for that amount of time. (You said you don’t have many expenses right now.) Of course, given what I just said about pressure, you may not start to make any money until you’re down to your last hundred bucks!

Lastly, and without meaning any disrespect, leaving a relatively new job in sales is probably not as painful as leaving other careers. I mean, you could probably get a job in medical sales just about any time you wanted, right?

I started in this business in 2006 at the age of 38. I only wish I had the sense to start 15 years ago.

8

NJBird_dog,

I would strongly suggest that you not quit your job until you can make enough money to support yourself. The minute that you quit your job, your ability to borrow money from the bank will also cease to exist. In this environment, an ever increasing number of hard money lenders are also looking at the credit and employment status of the borrower before loaning money. Who would loan money to someone with no job, no significant money, and little experience? I know I wouldn’t.

Also, I have never heard of a person making a living as a birddog. It might be ok for some extra cash, but trying to do it full time will be difficult. You’ll probably have to AT LEAST make it to the wholesaling level and even that may be difficult in your market.

There are 168 hours in a week. That is more than enough time to work 40 hours at a full time job and still work more than 40 hours in REI. If you don’t have the motivation to do that, I’d just quit now because you won’t make it anyway. If you have to be on the verge of being broke to get motivated to work, you won’t make it either.

Starting a business is not easy. Keep your job and get started. When you are sure that can support yourself with your REI business quit. This is a plan that will give you a reasonable chance of success.

Good Luck,

Mike

9

until you have done a lot of deals and know what you are doing, quit your job to jump into REI is unwise to say the least.

also, there is a dramatic difference between being self-employed and having paycheck show up every 2 weeks like clock work.

perhaps the best thing about being an investor with a full-time job is that your can keep better control of your investment decision process. If a Seller (or buyer) offers terms you don’t like, the deal starts to stink or not look promising, you can bail out and go about your business (and pay your bills with your income from your day-time jig). In the end, I only chase what I think are the best deals and let other people take stuff that is marginal.

10

Mike (propertymanager) has hit one of the biggest…IMO Getting loans, banks are getting tighter.

You need to create a business plan and an action plan to fit that. I love the thought of rehabbing and retailing…but my market right now won’t support that with my budget. It took a year for me to modify our plans and areas to invest in. We have now found a location where we can buy/rent or buy/rehab/rent or if need be sell to a landlord (buy/rent).

The reason we started rentals right away, besides cashflow, is that many banks require 2 years of renting before they will allow you to ramp up your holdings. There are banks out there, but the rates are killer.

11

As foreclosure rates climb expect banks to get even tighter than they already are…

12

There is this misconception that real estate investing is easy. Like Lou Brown put it, it is simple but not easy. It is infact hard work and will require intensive labor or budget to be able to find the properties.

Forget the fact that it is real estate. Think of it as a business. Do you feel you understand the business model and able to operate your own company? houses are just the product your company buys and sells. They are inventory.

Quitting a steady income job in hopes that you will force yourself to find properties is not a good idea unless you know what you are doing.

9 out of 10 investors fail within a year or two.

13

This answer may be more philosophical than realsitic but:

If you are successful in RE investing, You will just know when to quit your regular job.

You requesting landing instructions yet you have just taken off.

Re-check your ‘flight plan’… and good luck.

14

Thank you all for the helpful insights, perspectives and advice. I really do appreciate it.
I realized that I’m not ready to quit right now. As mentioned above, 168 hours a week gives me enough time right now to balance a job and real estate. If things really pick up within the next year with real estate, then I will consider letting go of my job, and of course I will keep you all posted on the progress. Thank you all for the replies.

15

NJbird_dog,

I’m hurt. You didn’t take me up on my offer to network or attend GSREIA…

it’s ok…my offer is still there if you want it :wink:

ryan

16

Oops, i must’ve overlooked it… pm is on its way! ; :smiley: