When to Flip full-time

Question

Hi BP community,

I just had a sudden question in mind that I needed some opinion on. I'm a recent graduate and considering to flip full-time, but from what I've been advised is to find employment and flip on the side.

So my question is: when will I know that I can quit my day job and focus on flipping full-time? Other than the fact that my profits are greater than my income salary fro work. What other factors should I consider?

Nathan Emmert · Answer

There are two things to consider.

The first is the opportunity cost.  By working full time, what are you giving up in terms of your investment proceeds.  Are you only able to flip 3 homes a year instead of 6, 8, or 10?  Are you only able to buy homes at a discount of 20% instead of 35 or 40%?  Are your holding times 6 months instead of 4?  Etc, etc, etc.  Quantify the "expense" of your job.  Then look at the value of your job.  Generally there's a salary... how much would it cost to replace health insurance?  How much is the unemployment/disability safety net worth to you?  Do they offer 401k matching?  Your benefit package from a good job often goes far beyond just the salary, so make sure you look at the whole picture.  Then compare the two numbers.

The second is a quality of life issue.  If you "LOVE" doing real estate and having dirty finger nails and "HATE" sitting at a desk, maybe it's worth it to you to accept a lower compensation to be a flipper full time.  Or you may find that the intellectual stimulation of a certain job may be more enjoyable than managing subcontractors all day, in that case it might make flipping full time less attractive.  You have to decide.

Life isn't just about dollars and cents.  Look at which one is going to leave you happier and more fulfilled, go from there.

Account Closed · Answer

Alan, I went with dons advice... Go for it before you have a wife kids, a mother in law to take care of lol...quit my job and jumped into it full time...I was broke for a long time but now seem to be doing better than most people my age... Not that I need to compete... Just letting you know it's possible after a few years of budgeting, discipline and 80 hour plus work weeks... To me it was worth it. .. I still live on less than 1000 a month.. The rest goes into the business...there's a post on here where I admitted to living in someones closet for a year... Most thought I was an idiot or a bum... Or possibly both.. Lol... I could care less....it saved me a ton of money that I used to get a loan and flip a house where I made 45k... Not bad for a bum. :)

Wanted to add that I did rent out and pay for the closet space... So im not a complete bum... And it was a walk in closet! :)

Wanted to add that I did rent out and pay for the closet space... So im not a complete bum... And it was a walk in closet!  :)

Justin S. · Answer

Alan

Flipping takes cash, so once you have the cash then you can go full time.  The cash can be your own or someone else's but you will need it.  I would find the cash first, then start thinking about going full time.

Don Hines · Answer

If I was just starting out in life with no financial burdens, I would jump into what ever I thought I could do and was interested in. What a great time in life.
As for me now that I have been out in the world for over 35 years trying to find out what I want to be, I hope to be a full time flipper in the next year.
Don

Account Closed · Answer

justin brings up a good point..don't just jump in blind  :)

read up on BP...get your money and your farm area down..be prepared...and then be sure you're willing to sacrifice all your tim--and yes, even live in a closet for a while to save money if you had to..if you want it that bad, you just may succeed...good luck  :)

Rob Gillespie · Answer

Alan,

Factor in your lifestyle and expenses. Honestly, I am full time and have been for a long time.  To make a living does not take a ton of time, I could flip a house or two a month and hold down a full time job. If you are looking to make a killing, you will need to spend a lot more hours digging up deals.  :mrgreen:

Michael Seeker · Answer

You can quit your full time job anytime you want or never even start one for that matter.  It boils down to your comfort level.  I am a relatively new investor and work the 9-5 as well.  I could quit my day job right now and probably become a pretty successful RE investor over the next 1-2 years.  I also think I can keep my day job and become a successful RE investor over the next 2-3 years.  So instead of scraping by and living below my means for a year, I'm choosing to deal with the hassle of essentially working 2 jobs.

I choose to do this as I would like to maintain my current life-style.  It's all about your personal preference.  For me, working for the man just so happens to pay a hell of a lot better than RE currently does.  But I'll tell you this, coming into work every day becomes a lot easier with the end in sight.  If I thought I'd be stuck in this office for the next 40 years, I'd probably have my nose up my bosses ass like everybody else I work with.

If you are strictly doing flipping, this can be a very tough thing to determine.  You may be able to flip a few houses without a full-time job to support them, but what are you going to do when you buy that house with a few extra problems that you didn't budget for?  What if that house is also having a hard time selling because a couple others on the block went into forecloseure after you purchased it?  You need to make sure you have enough money socked away in savings to pay for these things or have some other source of income until you can afford these types of setbacks on your own.

Ibrahim Hughes · Answer

I like Nathan's reply. Sounds like a good way to plan it out which is needed.

But I do want to add that as far as when do you think you're ready to go fulltime? By following Nathan's plan and calculations AND (imo) when you get to the point where your job is getting in your way.

I left my job in June 2003 when I realized that my wholesaling business was suffering big time because I couldn't follow up on leads that I KNEW would make me money. I had buyers starving for vacant lots (what I was primarily wholesaling at the time) and vacant lot leads that my competition knew nothing about. Thus I turned in my 2 week notice to my boss who himself had just started working for our company. Funny setting up a meeting to meet with him only to shake his hand introducing myself and quitting at the same time. He thought it was pretty funny too - lol.

Steve L. · Answer

Alan - you don't provide enough information to answer this question.

1. Do you have any cash/safety?
2. Do you have RE experience?

You might want to find a career in the real estate field.  Working as an agent, lender or for a company already flipping properties.

Account Closed · Answer

Adrian I believe I posted on this before but I did it for about a year and a half...don't want to get this post off topic but feel free to pm me if you have any questions

When to Flip full-time

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