Invest123-
“… if I quit, I’ll change careers and begin selling real estate… as well as work on investments as they come along. My idea is, I’d rather be involved and immersed in anything real estate-related rather than work a job that has nothing to do with my eventual goal of real estate.”
Real Estate Sales people are a totally different species then Real Estate Investors. I would believe most investors use RE agents as they do an attorney, accountant or any other employee they need, another tool to get the job done. It may take you 5 or more years as an agent to save what you have saved in 3 yrs at your job.
Keeping your job and investing the proceeds can bring you very far ahead in 15yrs. You can learn everything you need to know by studying here, from other investors, groups and researching consistently the area you invest in. Surround yourself with like minded people.
Your eventual goal of real estate (investing?) can start today. Buy a place that cash flows and rent it. Stay where you are until you accumulate a few, you will be helping your family sticking around to offset expenses. When you buy right, yes, you can re-sell for a profit and keep repeating. Eventually you need to accumulate multiple cash flowing properties to have the freedom from a job, to continue investing or go on a vacation.
“But as I stated, I don’t want to make $100k. I don’t want one or two solid deals a year. I want $250k a year already, I wanna constantly meet people involved in the REI industry, and I wanna eat, drink, and sleep REI so I can make leaps and get my finances taken care of so I can focus on the more important things in life.”
You can eat, drink and sleep REI with your job too. I know lots of people making more then 250k year and they can not save a dime and THEY HAVE TO KEEP WORKING, now there in there 40’s, 50’s, 60’s, etc… Wife came along, kids & grand kids came along, problems came along and the lifestyle can get ahead of anybody under certain circumstances.
The greatest and most valuable assets you have right now; time, youth, earning potential, hunger, confidence and the belief you can have it all. In 20 yrs some of these will fade a bit, you will have less time, your youth will be a memory and the should have, could haves may appear! 20 years is nothing! Do you not realize you were just 10 years old 15 years ago.
“I don’t want flashy cars, girls, clubs, none of that.”
This is good except the girl part, you need to live- find one with money and a job, a trust fund would be gravy. Do not waste your money, be known as a cheap. No one will care later.
“I’m so sick of the current state of economy, sick of the war in Iraq, sick of this phony war against a religion like Islam, sick of this economy being manipulated by the group of elite international bankers who are robbing this nation of it’s wealth, sick of the 9/11 report which is full of BS, and I’m sick of all the garbage that I hear on TV everyday to point where I gave my TV away last week. And I’m disgusted by what I’ve learned recently after reading the book, which I recommend to all of you, entitled “Confessions of an Economic Hitman”. All this doesn’t even scratch the surface.”
Forget all of this, do not pay attention at all. Keep your eye on the ball! Your ball! Your plan, your goals and apply your knowledge. Only worry about what you can control! Consume yourself in what you can control. Your needs will not get you in trouble, be careful of your wants.
"Right now, in my area there are plenty of short sale opportunities. I’m currently switching to a realty office that focuses primarily on short sales, pre-foreclosures, etc. The broker has direct relations with banks and 3rd parties that FEED him leads of people that need foreclosure help. On top of all that, he offers 100% commission. He only takes out a flat $995 per closing (or less depending on the plan you choose). The rest is mine to keep. So if he’s passing me a minimum of 2-3 leads/WEEK, and I’m also doing my own advertising, and I’m able to secure about 20-30 listings within 4 months (which is very possible in this office)… then I see nothing but unlimited, sky’s-the-limit type opportunity. I see the $200k-250k potential. Not just with listings, but let’s be honest… being involved in real estate full-time increases anyone’s chances of coming across great deals than can potentially put $30k+ in my pockets. When I speak to certain agents who tell me they have 30 listings, I think to myself… “wow, they can make as much as they put into it. I know I can out-work even out-sell them, so why am I wasting time playing it safe with this job?”
There are a few, a small few in any business that are the most successful. Sounds like a want, a want to leave what you are now succeeding in. I do not intend to discourage anyone. I think you need to see it from different angles. All this sounds good if it were to workout that you are “the one”, in the small few.
“I want to commit myself to something and give my 100% to it, just as long as the return is worth my time.”
Everyone has to decide for themselves what is worth their time. Some feel joining the circus, being a doctor, doing meals on wheels is worth their time. This is very personal. But imagine all you can do when you accumulate enough cash flowing property, 10k mo., 20k mo., 50k mo, etc…Once you have them, the control, they are yours.
Reading your posts seems to suggest your discontent of balance. Only you can balance out your job and finding deals to invest in AND YOU CAN!
Live off your appointment book, allocate your time and take the baby steps, by 30 you will be walking and by 35 you will be running.
“Problem: I don’t wanna quit right away, because I need to get a mortgage so I can move out of my apartment and own my own property.
Solution; I’ll put extra emphasis on finding a discounted deal very soon. I’ll get an affordable house with FHA financing, put down a minimum amount, and rent rooms to a few responsible, quiet friends to keep my payments low.”
Keep the job, stay in the apt., own your own property that cash flows. Finding a great deal is the most important, keep friends out of it, it is a business.
“Problem: Raj made a good point that being an agent to earn money, while learning real REI isn’t a good option. That I should keep my job and learn REI.
Solution: I don’t have an answer for this, I don’t know how to get involved with REI if I don’t start by going into it full-time as an agent. But I see it as an advantage to be a full-time agent rather than a full-time employee b/c at least I’ll be immersed in the real estate environment on a daily basis. The only REI I’m familiar with is short sales, and I have the knowledge to make good margins on deals which is what I will focus on for now. As for bulk REOs, it fascinates me, because if I can learn the process of how it works, then the only trouble is selling it to investors who want to make money. If I’m an agent, then I can help them resell these properties. It’s skeptical, it’s not a plan, but it’s also reasonable and it’s what the market is giving us right now.”
The solution above could be the problem and the problem listed above could be part of a good solution.
“Keep in mind that I’ll be 25, and I think there’s nothing really wrong with taking 6 months or more off in between jobs at my age.”
The main regret I have from when I was 25 is waisting any time and that I could have bought more cash flowing properties. Trumps main regret from when he was 25 is probably that he did not find a way to buy half of Fla., Chicago, LA and all of NY.
If we pretend you are forty today and you were 25 in 1993. We will call you boy A. Your 1993, 25 year old buddy, boy B is an agent and you boy A are doing what you do now.
Boy B is running around trying to sell, get a listing and collect his fees. Every time he gets his commission one of his bills uses up the funds. He finally saves up some money and then goes through slim times again. The cycle keeps turning.
Boy A bought a 100k sfh in 1993 for 75k fixed it “good enough” and rented it out. He lay ed out 20k and got a loan of 60k with extra costs to get it and puts 15k in to fix it. He is into it for 35k with a loan of 60k. And in the NE he got 1400 month rent. He calls the bank to refi or add a 2nd mtge. pulls out his 35k and now has a loan of 95k. Not a lot of cash flow but good enough especially not using all your original 125k savings and getting your investment back out.
Now he is feeling comfortable with his first deal he does another in the summer, another in the winter 93’-94’ and another spring/ summer of 94’. Now boy A has 4 SFH worth about 120k-125k each.
Summer of 94’ Boy B got a new car with 500 mo. pmts. and 1000 month apt. Plus gas, elec. cable, insurance and the furniture he feels he deserves.
Boy A met some investor who had a place that was out of the investors area and gave boy A a lease option, this place was 135k and boy A thought it was a lot but he could still make $200 month on it leased out to someone else. Now he controls five and he is 26 years old.
Boy A keeps working his job and spending all his other time Looking, Learning and taking care of his investments. Ignoring the news and economic data he acquires 3 more buy summer 95’, the rents and all the houses have went up a little. The investor that leased him his 5th house calls and says boy A you have been really good with making your pmts on time. I would like to know if you would like to partner with me on a 24 unit apt. bldg.?
I think I can get it for $1,000,000.00 the rents are 6-700 mo. Would you be interested in looking at this with me? The seller will hold paper and only wants monthly pmts. with 8% financing. He is retiring.
We will offer him 12%, lower the asking price but his pmt is the same with a two year “fat” pre-pay penalty.
Anyway…Blah, Blah, Blah…
It is now 2004, the boys are 35/36.
Boy A acquired 200 apts with partners/investors and by himself and a few more sfh. The original apt bldg with the first investor they refinanced for 1.8 mil cashing out the seller for lets say 800k and re-invested. Don’t take these numbers factual, this is just an example.
Boy B has a nice 300k house, hot cars, wife boat and a shit load of bills. Sales are hot so he is doing, ok.
Boy A bought out all his partners, re-fi all his apts (keeping them cash flowing) with a cushion. The apts he acquired for 40-50k each so he took out 25k, 25k x 200 = $5,000,000.00.
Boy A also sold 5 of his sfh’s for around $350k, cleared over 200k each and still kept a few he liked more then the others. On paper Boy A’s properties are worth around 20 mil but thats on paper and part of his business. He says "I rent apts., I do not own bldngs. Personally he has 6mil aside and does not need to spend it, he lives off the cash flow because of the habits he developed.
2008…
Boy A is sitting on a bunch of cash and still has great cash flow and his own job.
Boy B is wondering when this market is going to come back and asks boy A if he needs any help.
invest123- what part of the NE are you in? You can still now find nice neighborhoods with sfh’s below 200k and in these neighborhoods you will find bank owned listed around 150k, offer a 100k to 50 of them and a few will stick then rent it.
Stick to what you know, get a promotion, keep saving and start investing, today.
Good Luck