Should I quit my job; could use advice from you guys

General Real Estate Investing
1

Hey guys, I use this site often and value everyone’s input. This is a new account I created b/c I’m going to post some confidential info about myself. I would really appreciate some advice on my current info:

I’ll be 25yrs old later this year.
I have a nice job doing sales, it pays $57k base, I have a home office, plus I get a company car with ALL expenses paid (Yes, gas too!), a phone, laptop, insurance of course, and all this adds up to about $80k/year.

I graduated with $22k in debt in '05. Since then, I was able to pay it off quickly, and now I somehow managed to save/invest up to $135k.

My sales job has been suffering because I’ve been neglecting it in lieu of real estate. I spend a lot of time learning and being involved in real estate and not enough time on my sales job. So my job isn’t going to well. I’ve tried to balance both, but I just can’t do it… one side always gets neglected. But, if I leave my company this year, I’m sure I can get another better offer with about $75k-base given my 3yrs sales experience.

However, I don’t want a job anymore. Even with the flexibility I have in sales, I just don’t want the comfort anymore.

I want to get into real estate full-time and work my butt off. I don’t spend carelessly, I don’t drink, and I don’t even date right now, and I don’t have any issue whatsoever with credit cards, etc. I’m just looking for an opportunity to devote a 110% of myself and take it to the next level, and I can only take it to the next level in a performance based environment like real estate.

So I’m highly considering quitting at the end of this year, and not pursuing any other job offers, but spending 2009 full-time in real estate.

I’m a licensed agent right now and I plan to work the short sale market. I haven’t had a strong pipeline of deals b/c I’m part-time, but I did close a deal earlier this year for $8k, I had a potential $40k deal fall apart, and now I have a potential $40k deal that I’m working on.

What would you do if you were me? I live in an overpriced market in the northeast. My parents immigrated here in '87, mom didn’t work, dad never made more than $5/hr, and we don’t own a home. We rent 2 apartments that my oldest sibling has been covering financially. (I’m the youngest in the family, so my oldest sibling doesn’t take money from me.) I plan to pay him back obviously by helping him get into a home. I have other siblings, but they aren’t so money motivated or business-oriented. I can’t buy a house around here with a $57k-base job, and even if I do, I’ll be a slave to my job at that point. I need to hit a home run and have enough money to help support my family and take things to the next level. This is years of frustration so I know that motivation for me will not be a problem.

My biggest concern is making that leap, b/c I won’t have health insurance, gas prices are super high, I’ll have to get a car, I’ll have to go a few months without being paid, and who knows what crazy things the international bankers will pull next to upset this economy.

So in short… I’m a confused but very, very anxious guy. The grass seems greener on the other side, but it’s true that I haven’t been watering my own lawn too well. and I don’t know what to do.

Sorry for the lengthy post.

Any advice from the regulars fdjake, propertymanager, rookieNYC, foreclosenegotiater, etc. etc. would really help.

Thank you all in advance, this site is priceless.

2

1st question do you have any rental properties now ??? or what do you plan on doing with RE, Flip, rentals, wholesaling ???

we need more background info. so far you’ve told us your present living situation. $135k investment money and 57k/base job. If you dont have any investment properties yet I’d suggest you start will you have a job to fall back on 1st !!!

3

I don’t have properties, and they’re too expensive out here to cash flow. Plus, I don’t wanna put down a huge down payment and deplete my savings. My view has been that my savings are more valuable right now b/c I can live off it while I work on closing some bigger deals. Do you agree?

I plan to take listings as an agent, mostly short sales, try to make margins on certain discounted deals, and learn as much as I can about other aspects of real estate such as bulk REO packages.

4

Well bulk REO packages are not for novices. the investors who buy them usually have 10’s million being invsted. I dont really so how you could get into them, but i’m not a real estate agent so maybe agents play a big role in the process that im not aware of.

Is your RE agent license valid as of right now ?? if so why do you need to quit your job ?? you could do both of them. what area are you located in ?? is their area near that would allow you to cashflow ??

5

You seem like the type that’d make it in RE. However, the perks that your giving up, along with making it more different on yourself to obtain a mortgage should be taken into very careful consideration. I’m in a very similar situation and have not quit my job yet because I don’t feel confident enough to make the jump.

6

My plan would be to find a legit and direct access to REOs, learning them inside/out, and then I’ll work on obtaining the financing and investors. And I can help them resell properties on the MLS since I’m an agent.

My license is valid and I wanna quit because I don’t want to do both. I want to focus on just one and give it my all. I’ve been doing both and it’s just a headache. I don’t want to make $100k, I want $250k already and I’m willing to bust my behind to make it happen.

I’m located near the NJ metro area close to NY. We saw the housing boom, but we aren’t seeing a bust in prices. Plenty of foreclosures, short sales, but prices overall are remaining strong.

And there’s nothing nearby to invest into without putting down a significant amount. I’d rather stay liquid right now and just work on increasing my income.

7

QUIT YOUR JOB.

Life is too short to be in a job that doesn’t fit. You are in a perfect situation to quit your job and jump into real estate sales full-time. You will need an office, MLS, supplies, gas money, etc. for about 3 months until your first deal closes.

I was in much the same situation in California in 1979, except I was also a single parent with babysitting costs, family and medical obligations.

The real estate market tanked right after I started. Interest rates went to 17% for a VA loan and the only deals were owner-carries. The San Diego Board of Realtors lost 80% of its membership in two years. Everyone and their uncle had had a real estate license because the market had been so hot. I had a child to feed and I worked really hard. Once the utility company shut off the water for non-payment, but I just kept on. If it was cheap, I sold it, as interest rates were sky-high.

20% of the Realtors sell 80% of the real estate. It has always been like that. The other 80% are dabbling and have spouses to support them. So even if prices in the NE are sky-high and the market is dead there are still plenty of deals to be done. People must buy and sell–divorce, illness, job transfers, foreclosures, babies.

You have no kids and no debts. What is the worst that could happen? You could fall flat on your face, never make a sale, and have to go back out and get another job. What would be so terrible about that?

You should qualify for COBRA insurance from your present employment. Also your Realtor Board should have info. on private-contractor self-pay health insurance, low-cost for a young guy.

With your motivation and verbal skills, you should rise to the top like cream. Why not research the whole real estate field? Take every class that you can. Get those designations, they are valuable and give you the credentials. You might just be cut out for commercial real estate, subdividing, condo-conversions, leasing, so don’t limit yourself.

Good luck. To win something, you must risk something. You are risking your security for a more lucrative job that you might love. You will also be able to buy real estate in the future once you get a 2-year period of commissioned earnings.
Let us know how it goes.

Furnishedowner

8

How committed are you to staying in the area you are in right now? Is there an area close to you where you could move and the properties do cash flow? What you are really doing is accessing your risk (just like a bank would do). You can invest in RE anywhere, some places are less risky and others. I did read somewhere on this site that someone asked the same question and the best response I thought was if you make enough in RE to not touch your pay check for a year you are good to go.
BK

9

I truly cannot believe that anyone would post for you to simply quit your job. With the current economic situation, along with housing and gas prices, having a stable job is a GOOD thing. Having one with the perks attached to it that you have is a true blessing. Hang on to it.

I know that I’ll probably be hit with the “being negative” crap again, but the “just do it” approach is NEVER a good idea. In the current economy, it’s a recipe for failure.

No, you will not be able to balance REI and your job equally, and you shouldn’t try. Focus on the one that is putting food on the table. What you should be doing is using your free time to develop a REI business that you can fall back on once you’ve done a few deals and have a cushion.

You say that you don’t want the day job so you can focus on real estate, then you say that you want to be an agent AND an investor. As you said, you can’t do both equally. Focus on one as your second job, and get it right before making it your primary.

Last on this point, you say that you “can’t” balance both. I’ve personally held down two jobs/careers at one time. I’ve known several others that not only did 2 jobs, but 3, 2 fulltime and one part time. Making commitments is not easy, but there is a big difference between “can’t” and “don’t want to.”

In 3 years, you’ve managed to save, $135K. If you quit your job, that will be gone fast. You already mentioned that you live in a high priced area. You need to figure how long you can actually live off of that. Also, without a job, how will you get funding for your deals? As you’ve stated, banks are getting tougher. I can assure you, no job = no loans.

You also need to look at the bigger picture. First, You currently have no plan from your post (sorry, but so far, what you’ve posted is a dream, not a plan). Until you have a plan, stick to the day job.

Second, by your numbers, you’ve saved $135K in 3 years, or about $45K a year. I ran quick numbers, but roughly if you managed only to add to that every year $30-35K, at an annual yield of 10%, you’d have about $560K in 10 years or $1.7M in 25 years. In approx 15 years, you should have enough in savings to generate interest income of roughly your current income. That’s if you do nothing but put money away.

Raj

10

I disagree with Raj and his very conservative approach.

Who better to switch careers than a young single person with no debts and a cash cushion AND a burning desire to be in real estate full-time?

Selling real estate is also a career. It will mesh very well with real estate investing.

If there were children, a spouse, mortgage, and debt I would give exactly Raj’s advice.

But I have done exactly what he is wanting to do, and I did it as a single parent and in a terrible market. You CAN make a living selling real estate. It is the best training to be an investor. You have access to the whole market and you learn where the best deals are.

I don’t understand the fear of the “bad market”. Deals will always be made. Agents and brokers will be doing those deals and getting paid handsomely, bad market or good market. Just more deals, and easier, in a good market.

You asked for advice. Here it is: QUIT THE JOB.

Furnishedowner

11

I think Roger is 100% on the money.

Ask yourself a few questions???

How do you plan on paying for health insurance? Rehabbing houses is a GREAT way get hurt. I speak from 20 years of experience. You don’t have to be actually DOING the work to have an accident on a construction site. At your age health insurance is not usually a high priority. UNTIL YOU NEED IT!!! Want to lose $100K the quick way??? Spend about 1 WEEK in any hospital recovering from minor surgery. I’m STILL a Full time Firefighter for just this reason. Not only do I get about $15K worth of outstanding Health insurance, but I ALSO see, FIRST HAND what happens to people who don’t have it.

Have you looked around lately…I think Roger will agree… We’re in a recession. My best estimate is that this is going to be a BAD ONE.
Very shortly…ANYONE with a decent, SECURE job, is going to feel very lucky. You’ve already got one. KEEP IT.

Have you been watching what’s going on with freddy mac, and fanny mae??? This is a DISASTER just waiting to happen. The problem here is IF the U.S. Goverment steps in to guarantee those institutions, the U.S. Goverment will be on the hook for almost $5 TRILLION in mortgage guarantees!!! If they do NOTHING…I don’t even want to consider that scenerio.

This is what happens when a NATION, it’s MORON citizens (-.6 annual savings rate), it’s lazy politicians, and greed, all come to the party in one car!!!

If you look back 100 years you could not pick a WORSE time to do what your thinking of doing.

Here’s my advice…

Instead of looking at your job as a negative, spin your thinking to see it as a positive. This is NOT hard to do. Here’s EXACTLY how I did it (before I became a Firefighter) I had a TON of crappy jobs. BUT…EVERY house I bought and sold put a BIG pile of money in my bank account. The GREAT thing about keeping my job was…I LIVED ON THAT MONEY…not my profits from real estate. ALLL my real estate profits went right into a bank account. When your making $50K on each home you buy and sell, and you do 2 or 3 a year…it doesn’t take more than a few years for your attitude about your job to COMPLETELY change. When my bank account hit $250,000 my (at the time) crappy job didn’t bother me anymore. I knew that job didn’t OWN me, I OWNED IT!!! If I wanted to leave I knew I could…or I could stay 2 more years and have $500,000 in the bank.

KEEP YOUR JOB…Very shortly there will be a whole bunch of people willing to do ANYTHING to have what you have now. This economy is screwed. There is absolutely no way we are not having an EPIC recession here.

INDY MAC at 8:30pm tonight has just been taken over by the FDIC…INSOLVENT!!! MANY more to come…not opinion…That comes directly from Paulson and Bernanke.

12

Keep your job. I have managed in the last 11 years to maintain both a demanding career and a healthy real estate portfolio. You have no leverage without a job. Keep it or you risk doing what many others do and that’s fail before they even get started.

13

Furnishedowner,

I’m just going to be frank with you. Telling someone to quit their job, especially someone who obviously lacks a firm plan of action, in the present economic situation is simply irresponsible and shows a very serious misunderstanding of the current economic situation.

Now, while I still don’t attend to the theory of “there is simply no hope” or the other more negative, “this nation’s best years are behind it,” the present national and global financial outlook is NOT good. Comparing it to ANYTHING in the last 20-30 years does not compare.

Bad real estate market and high interest rates could just be the beginning. You HAVE to have a stable, steady income to qualify for a loan, NOW. Qualifying is only going to get worse. That wasn’t present in the last “bad market.”

The had never been a boom like the one we had. How the bust is going to go, nobody knows.

Oil has NOT skyrocketing out of control, and while I believe that too is a bubble, there are global events happening that may sustain that bubble for quite a bit longer, like…

Possible Middle East War. Not Good.

If that is not enough, someone saying that they “can’t” manage to keep a secure successful business up while starting another, quite frankly, isn’t going to be a go-getter without a day job either. Sorry, Invest, but it’s the truth. If you’re not committed to working 16-20 hour days to get it done NOW, you won’t later.

Raj

14

Ditto Raj and FDJake. These are dangerous times and I would NOT quit your job until your real estate business will pay the bills.

You are young and could certainly work hard enough to do both businesses at the same time. It will require a lot of work and sacrifice, but that is the price to be paid for success!

Good Luck,

Mike

15

Invest123,
I am having a hard time grasping the thinking of the previous posters. Maybe they are a little jealous that they had to stay in their jobs while you—young, single, no debts, 135K cash cushion—get to take a leap into what you want to do NOW.
Yes, you do need to quit your job.

I think people are thinking that you want to quit your job and do rehabs, REO’s or investing only. I agree with the previous posters in that that would be foolish.

That’s not what I heard. I heard that you want to quit your present sales job and sell real estate full-time. A new job. Still in sales.

Right now you are not capable of giving 100% to your present job. It is not fair to your boss or to yourself.

Like me, you come from a conservative immigrant background. Immigrants have already taken the biggest risk–packing the suitcases, getting on a boat or plane, no English, leaving the relatives and secure known culture behind. All that for the chance that hard work will lead to a better future. Talk to your parents. What is their advice on taking this chance to better yourself?

Sell real estate full-time. Part-time agents do a disservice to their clients, the field is too large and complex to do it well part-time.

Of course get health insurance, it would be irresponsible not to cover yourself. Post your research on that subject here; others have interest.
For young single healthy guys, premiums are low. They don’t get pregnant.

Work your butt off. In 2 years you will have a proven record of commission earnings and you will qualify for a loan just like a guy with a fixed salary. Now you can begin to invest, plus you will know the hot deals.

To quote Gary Keller from “The Millionaire Real Estate Investor”: “Small plans at best yield small results, and big plans at worst beat small plans.”

Put your big plan in writing and post it for us to critique and shred. My Big Plan advice stays the same:

  1. Quit the Job.

Now you need to get to work on the rest of the plan. Good luck!

Furnishedowner

16

That’s right, Furnished. We’re just jealous of all his “opportunities.” That’s mature.

Truth is, I put my last $1K down on my first deal, with no real job and nothing to look forward to but either a great deal or a fast divorce, so please, try to keep the flaming posts to a minimum.

You wouldn’t tell someone wanting to be a chef that had never cooked in their life to simply quit their current job and "go for it.

You wouldn’t tell someone to quit their job and follow their dream of being a race car driver if they had never been behind the wheel.

Yet, over and over on this site, people routinely tell others to “follow the dream.” Why is that? Is it because you have no responsiblity to the other person?

What do you really know about invest123 from this post that can convince you that HE can do what you’re suggesting? Hey, let’s completely forget about the whopping historical economic era that we’re currently in. Assuming everything else is equal, what here makes it work?

Your advice, Furnished: Quit your job, work as a RE agent, and in two years, you can get a loan. Wow. That’s assuming that A) he makes it two years (the majority of new agents, like all businesses, fail) B) he becomes successful, and finally C) that they even have loans available for 1099 people at that time.

However, NOW, he has a good job where he can get a loan NOW (assuming good credit). All he has to do is be willing to sacrifice TIME instead of MONEY (your option).

You say that you read that he wants to be a RE agent. I suggest you read it again. He is all over the place. He can’t focus on REI and his current job, but he intends to be a RE agent AND a RE investor AND a short sale specialist AND maybe do REO bulk sales. I’m sure that if he can’t do his current job and do REI on the side, that all that will come to pass much faster WITHOUT his current income.

I have a 22 year old that works for me now that has a full time “day job”, works FULL-TIME as a RE agent in order to build her business and still finds time for a part-time job as well. In other words, some dream of making it big, some understand what it takes to make it big. If he doesn’t have the drive to do it with a job, quitting isn’t going to make it any better.

Invest123, this may have come off as a bit cold. It’s not meant to be. You have to understand that there is a lot happening out there now and things are changing fast. What happened in the past is NOT any indicator of what is happening now or going to happen. Quitting a stable job now to jump into a business that you don’t yet know is, to be blunt, dumb.

Raj

17

I started in this business when I was 26, was single and still living at my home. I had been working 3 years at a steady job. I was and still am able to juggle both. There is absolutely no reason to quit a job to pursue real estate inesting. None, don’t let anyone fool you. It’s tough and you need the stability of a job as you work to be one of those who makes it. 11 years later and I am stronger than ever. As a matter of fact, I have been married for almost 6 years and have a three year daughter that I am juggling as well. It is doable if you work hard and are dedicated to it.

18

NO! You Should NOT quit your job!

I do believe no risk/ no reward, but this is simply foolish no matter how good or bad others believe the current economic situation to be. Your economic situation is what matters.

“I graduated with $22k in debt in '05. Since then, I was able to pay it off quickly, and now I somehow managed to save/invest up to $135k.”

If you can save at this rate with your living expenses covered, you have 45k per year to invest. When you have properties that net over 10k per month you can consider leaving the job, but you will now have 165k per year to invest. At that time you may realize to stay on this path and keep your job until you have 20k net per month, but now you will have 285k per year to invest. Its not how much you make, it is how much you save/invest.

“I’m sure I can get another better offer with about $75k-base given my 3yrs sales experience.”

This will get you there faster.

" I live in an overpriced market in the northeast."

What part of the NE? There are deals in any market.

“I can’t buy a house around here with a $57k-base job, and even if I do, I’ll be a slave to my job at that point. I need to hit a home run and have enough money to help support my family and take things to the next level.”

This is not true. You can buy a house and you can rent it. Then do it again! Of course you MUST buy right.

“The grass seems greener on the other side, but it’s true that I haven’t been watering my own lawn too well.”

Only you can make the grass greener! Right now your grass is green enough to take the baby steps necessary. If you water and fertilize consistently, big scores and lucky deals will happen. They happen to the ones looking for them and making consistent good deals.

Good Luck

19

[[[[…I’m sure I can get another better offer with about $75k-base given my 3yrs sales experience…]]]]]

Not without a really good reference from your current employer, and why would he give you a good reference if you aren’t putting any effort into your current job?

If you really intend to quit, you have no serious ties to the community, and you could easily move to a different area where real estate is cheaper and you have enough savings to start investing.

Be aware that it will be extremely difficult to get financing if you can’t show a steady source of income. The banks are all through with giving away money to anyone who asks.

20

Invest123,

Maybe you should weigh in with another post. What do YOU think of the advice you’re getting? I seem to be taking a lot of heat here on your behalf.

I stand by my advice. Invest123 is unencumbered. He has demonstrated assets:
Perseverance–graduated from college.
Thrift–paid off his debts.
Frugality–savings of $135,000.
Sales ability–3 years experience.
Family support–lives with family.
Advice-seeking–He’s out there gathering info. to make a decision.

Raj, this young man is not wanting to be a race car driver or chef. He is staying in sales. If you can sell refrigerators, stocks and bonds, or popsicles, and are good at it, you can sell real estate. Selling skills, time management, getting the signature on the contract, all that transfers well.

Yes, Invest123 is a little all over the board but that should shake out as he settles in his new career. He will figure it out.

If he fails, then he will fail and go back to his old line of sales. If this guy, with those skills, can’t change his line of work, then WHO THE HECK CAN?

What came across to me, loud and clear, was that he just couldn’t do it anymore. The wrong job is too demoralizing to ignore.

The economy is listed as a reason to stay with the old job. Doom and gloom stories on the economy hit periodically. Remember the Savings and Loan debacle? Then it was, “Our children will be paying off these debts forever…”. Well, my children are at the Mall probably buying designer T-shirts.

I don’t give irresponsible advice. I am a self-made hard-working entrepreneur like many of you others. But there does come a time when changes must happen. My sane, measured, well-thought out advice remains: Quit the job. Go sell real estate full-time. Be a success.

Furnishedowner