This is really a timely post for me because I quit my job at the end of last year and moved into real estate investing full-time. Should you do it? Was it a wise move for me? I’ll attempt to answer these questions and others in this post.
Why I Decided to Quit My Job
At the end of last year, I left a lucrative career in digital marketing to pursue real estate full-time. Now, full disclosure, the company I was working for was struggling financially and couldn’t keep me on, so it was more of a forced resignation. However, I did voluntarily opt to NOT look for another job and pursue real estate investing full-time.
Why didn’t I get another job outside of real estate?
Well, it was a tough decision, but the primary reason was because my real estate investing business wasn’t so much of a part-time endeavor anymore. Owning a couple of rental houses on the side and swinging a full-time job is doable.
FREE Real Estate Investing Checklist. Instant Access.
In my case, I had a full-time career in marketing + 35 rentals…oh and I had a 5-man crew on payroll that was helping me flip 15 houses a year on top of that. Yeah, I was definitely burning the candle at both ends. It was time to choose the marketing career or the real estate career.
When You Can’t swing Both, It May be Time to Quit the Day Job
There are only so many hours in a day, and there will come a time when you can’t swing a full-time job and a growing real estate business. There will be a tipping point. I will say, however, I would hold on to that day job for as long as you can. You should also consult with your accountant to get a realistic picture of whether your real estate business can sustain you in the short-term if leaving your job is a choice you’re considering.
When push comes to shove, the better option might be to scale back on real estate investing and continue with your day job. You also want to consider how leaving your job may affect your lending opportunities. It’s much easier to get financing for real estate when you’ve got outside income coming in.
Make sure the math works
I alluded to this earlier, but make sure you have enough history as a real estate investor to realistically and accurately discern how much you can pay yourself from real estate income alone. If you’re trying to survive exclusively from rental properties, then in addition to your mortgage payment, you need to consider vacancies, maintenance, property taxes, homeowners’ insurance, and the cost of hiring a property manager, if you decide not to self-manage.
If flipping houses will be your primary focus, then, in addition to rehab costs, you’ll want to factor in your holding costs along with real estate commissions and financing costs along with other factors like how long your flipper will likely sit on the market before it sells.
Consider getting your real estate license for extra income
Getting your real estate license can be a quick way to boost your revenue as a real estate investor whether you keep your full-time job or not.
Think about it. Unless you’re buying or selling off market properties, every time you buy a house you’re making a commission as a real estate agent, and every time you sell a house, you’re saving money that would normally pay to a listing agent.
Getting your real estate license could easily put thousands of dollars per year in your pocket for work that you’re already doing as an investor. I decided to get my license when I was still doing real estate “part time”, and having my license saved me about $15,000 within 12 months.
Unless you really prefer a classroom setting, I recommend taking your real estate courses online through Real Estate Express. Upon completion of the course, they’ll connect you with a local testing facility to take the final exam. Once you pass the exam, you just need to find a local broker that you can work under.
Seek Advice from People You Trust
Proverbs 15:22 says that “Without consultation, plans are frustrated, but with many counselors they succeed.” It’s difficult sometimes for us to look at our decisions objectively. Getting an outside perspective can help ensure you’re making a wise decision regardless if you end up in real estate full time or not.
In closing, making the decision to move into real estate full-time needs to be carefully considered. I also recommend seeking out a real estate investor mentor and joining a local real estate investing group. Lessons learned in real estate investing can be hard and costly. Surrounding yourself with other seasoned investors will pay dividends.