10 Challenges to Seriously Consider BEFORE Quitting Your Day Job

by | BiggerPockets.com

Quitting your 9-5 and becoming a full-time real estate investor! That’s living the dream, right?

At the risk of being a buzzkill, here’s some official “hold your horses” advice.

Most real estate investors with a day job have had a full-time job since entering the workforce. It’s all they know. And like it or not, most of us have lives entirely structured around having a 9-5 job.

Here are ten things to consider before you go out in a blaze of glory and leave the bridges behind you in flames.

10 Challenges to Seriously Consider BEFORE Quitting Your Day Job

1. The Fun Factor

What could be better than quitting your job to become self-employed? To launch your own business, to dance to the beat of your own drum?

It seems so romantic, so glamorous. But the idea and the reality are usually worlds apart.

Working for yourself is a grind. Sure, no one’s telling you what to do — but then again, no one’s telling you what to do. At the top of your to-do list every day is “figure out the most profitable things to do today.” Dreaming about working from home is fun, but actually sitting at home all day working? Less so.

2. Discipline

When you’re employed, you can slack off sometimes and still get paid. You can show up hungover or call in sick to go play golf. You can cheat your employer and work on your real estate investments while on the clock. And while all of those behaviors are immoral, you’ll probably get away with them and still get a paycheck.

But the self-employed not only need to figure out how to profitably spend every day, they need to actually follow through and do each of those actions. It takes a level of discipline most people simply don’t have.


3. Loneliness & Lack of Camaraderie

Being self-employed is lonely. There’s no water cooler, no break room, no coffee maker to stand around and tell funny stories about last weekend. There are no office pranks, no shared grumbling about the boss, no off-color jokes told in hushed tones.

Instead, there’s a desk in your house, with a computer and a phone on it. Sit down, shut up, get to work.

Related: The Notorious 9-5 Job: Should You Kick It to the Curb or Reinvent It?

4. Health Insurance

Your 9-5 job probably offers some kind of health coverage. Have you priced out what it costs to buy your own coverage for you and your family? How do the numbers stack up?

If you have a spouse that works, you may be eligible for coverage under their employer’s policy. But these are big “ifs,” and you should have the answers to all these questions before quitting.

5. Lifestyle Flexibility

You will almost certainly have some lean months at first, when you are spending money but not bringing in any revenue. How flexible is your spending? How willing are you to cut out every single luxury?

And luxury doesn’t mean meals out at five-star restaurants. “Luxury” means buying the foods you like at the grocery store, instead of ramen noodles. It means a glass of wine with dinner. It means going out to a movie instead of staying in.

Even if you are ready to pare your lifestyle to the bone, is your spouse willing to do the same?

6. Spouse Backlash

How does your spouse really feel about all this? Unless they enthusiastically pushing you toward quitting your stable, decent-paying job — and married people know how unlikely that is — be prepared for some backlash.

Sure, they are trying to be supportive. They don’t want to crush your dreams. They’ll say things like, “Well, if this is what you want, then let’s try to make it work.”

But at the end of the first month, when no paycheck comes in, their tune will turn a little more shrill. They may not have a full-blown panic attack, but their nerves will be on edge. And they’ll stay on edge until you prove that you can consistently bring in money from your real estate investing business. That may take months or even years — are you prepared for consistent fights about money for a long time to come?


7. Living With Uncertainty & Anxiety

Your spouse isn’t the only one who will worry about money. You’ll be twice as nervous about it until you reach a level of consistency and growth. If you’ve never been self-employed, you’ll be ill-equipped to handle the gnawing uncertainty. You’ll have sleepless nights, sweating in the sheets and watching the clock blink at 4:00 a.m. You’ll wonder how you’ll make your mortgage payments next month.

It’s scary, it’s nerve-wracking, it’s a recipe for self-doubt. Unless you’re already financially independent by the time you quit your job (which most people aren’t), you will have to live with anxiety for a long time to come.

8. Emergency Funds

Every year, we’re hit with unexpected expenses. And every time, we’re surprised.

How many times has this thought gone through your head? “Well, this year my finances were hit because we had that hiccup with ________, but next year will be different!” Maybe this year you had to install a new roof, or your car died and you needed to buy a new one, or a family member had unexpected medical bills.

But guess what? Next year, it will be the furnace that needs to be replaced, or your computer will die and need replacing, or whatever.

Brian Tracy once said, “People who lead full lives will have an emergency pop up every three to four months on average.” And most emergencies cost money.

So yes, you might have enough capital saved to get started on your first deal, but do you also have enough in reserve to cover the next unexpected bill that lands in your lap? It will come, maybe this month or maybe four months from now, but it will come.

9. Qualifying for Loans

Not only do you have to be able to make your mortgage payments next month, but as a real estate investor, you’ll need to qualify for new mortgages.

Related: What I Learned by Quitting My Job to Start a Real Estate Business 24 Years Ago

Do you have several sources of financing lined up, who will still lend to you even without your W-2 income?

Will the loans be priced at the same rate? Don’t assume lenders won’t charge you higher interest and/or more points when you have no regular income.

Will your lenders demand alternative documentation or qualifications in the absence of pay stubs?

Confirm these questions with your lenders before saying sayonara to your stable income.

Don’t forget that you may not easily qualify for a car loan, either. Keep that in mind before making your decision.

10. The Need for Structure & Routine

It’s a cliché because it’s true: “People are creatures of habit.”

Right now, your life has a structure and a routine. Your entire life is structured around your job: You get up at a certain time based on when you need to be at work. Your morning grooming rituals are based on what you need to look like at work. Your social life revolves around when you need to work, how much disposable income you have, and often the very people you work with.

Among the suddenly unemployed, it’s shocking how little they complain about money and how much they talk about the sudden lack of structure in their lives.

Before quitting your job, you need to plan and build out a whole new structure for your life. When do you get up in the morning? Where do you go to work? What tasks must be done when? When do you stop working for the day?

Work backwards from your goals to set up systems and routines for yourself. For example, if your goal were to run a marathon, your routine should be running every day, and your system should include gradually raising the distance over a period of months.

You’re considering abandoning the entire structure of your life, so be ready with a new one to fill its void.


Open Doors, Open Windows

Not everyone is cut out to be self-employed. Scratch that: Most people are not cut out to be self-employed.

If you spend six, nine, twelve months self-employed as a real estate investor and find yourself unfulfilled or broke, it doesn’t mean you’re a failure. It simply means that being self-employed is not for you.

Before leaving your job, be sure to leave all the doors of your career wide open. Work with your employer to leave in a timeframe that doesn’t leave them in the lurch. Leave on good terms with your boss and coworkers. Reach out to every single one of your business contacts personally, and tell them you’re taking a hiatus to pursue a dream of real estate investing. But stress to everyone involved that you want to stay in touch, and make sure they know that you value your relationship with them.

As you start investing full-time, be sure to build out new relationships, too. New windows will open for you — if you’re willing to develop these relationships.

If the time comes when you decide on a new direction in your career, fear not. If you’ve done it right, you should have more contacts and relationships than when you quit your job, not less.

And if investing full-time is everything you dreamed it would be? Lucky you, you’re living the dream and have more friends and contacts than ever.

[Editor’s Note: We are republishing this article to benefit our newer members.]

Have you quit your job to invest? Or is it part of your long or short-term plan? 

Let me know your thoughts and experiences with a comment!

About Author

G. Brian Davis

G. Brian Davis is a landlord, personal finance expert, and financial independence/retire early (FIRE) enthusiast whose mission is to help everyday people create enough rental income to cover their living expenses. Through his company at SparkRental.com, he offers free rental tools such as a rental income calculator, free landlord software (including a free online rental application and tenant screening), and free masterclasses on rental investing and passive income. He’s been obsessed with early retirement since the early 2000s (before it was “a thing”). Besides owning dozens of properties over nearly two decades, Brian has written as a real estate and personal finance expert for publishers including Money Crashers, RETipster, Think Save Retire, 1500 Days, Lending Home, Coach Carson, and countless others.


  1. Nick Moser

    Good stuff Brian. I don’t work for myself (yet), but I do work remotely from home. I have already run into some of these issues, like loneliness, routine, and discipline. I believe health care and loan qualification are the most important. I do also like the safety net and steady income the full-time job provides.

    You made a valid point about not everyone is cut out to be self-employed. I’ve often wondered this about myself. I’m trying to work out all various aspects now, so when I take the plunge I’ll be more prepared.

    • G. Brian Davis

      Thanks Nick. Just the fact that you’ve pondered these questions about yourself is a good sign, and show’s you’re approaching the career shift thoughtfully. Hope you find the freedom, both financial and otherwise, that you’re looking for.

  2. John Barnette

    100% spot on. Even as an investor and 1099 realtor JOB by day. LOL. Your points are all spot on. I have also found at property number 10…and cash flowing…than lenders want a lot of reserves for 3 months of mortgages for all the properties. Jeesh.

    Who only knows the requirements I will have to work with for number 11.

    • G. Brian Davis

      My experience has been that conventional lenders won’t lend to investors with over 10 mortgages. One idea is to get a commercial loan for future purchases, or use a commercial loan to consolidate and bundle up. Another idea is to raise money privately. But it’s definitely a shift in approach, after 10.
      Thanks John, and best of luck sorting through the funding challenges!

  3. Michael Rogers

    Good points. I’m part-time with my corporate job as a CPA 3 days a week and do real estate investing the other days of the week. I recommend people try going part time prior to quitting (if their employer will allow it) and see if they like it. I definitely like it.

    • G. Brian Davis

      Fantastic suggestion. I did something similar many years ago – I gradually weaned myself away from being a mortgage account executive by going commission-only and working for a hard money lender. I was self-employed at that point, and worked the hours I wanted, but still had an office I went into. Spent half my time working on my own real estate investments, the other half doing loans for the lender.

  4. Hello Brian,

    This is a great article – bringing in to light all the aspects of full time employment vs. self-employment. Your insight is helpful and provides areas for me to review thoroughly. Self-employment is my ultimate goal within the next year or so; however, right now I am keeping my full time job with a very demanding schedule. I am using my personal time after hours to build my investor’s work habits and schedule. Your ten challenges are things I will keep in mind as I proceed with this new endeavor.

  5. Davyd Ramirez

    Health insurance was the biggest shock for me. I am still looking for great health insurance for an investor that is priced as well when I worked for an international corporation with 10K+ employees. Another factor to consider for some people is going from a desk job to a job that has you in the field 50% of the time.

    • G. Brian Davis

      Yeah good health insurance is no picnic to find, especially if you’re older or have a pre-existing condition. Good point about being in the field – it’s definitely a change in mindset. You get comfortable doing everything with your phone rather than a full computer, and quickly.

  6. Tanja Davidson

    This is why I’m waiting to retire in a few months to begin. I plan to start working as a full time realtor and part-time as a work from home consultant.

    Insurance provided so that’s a big relief and bills will get paid. Money will still be tight but not so much I won’t make it thru lean times. So excited to finally be looking at beginning to be ‘independent’ and free to set my own schedule and pay.

    • G. Brian Davis

      Great idea Tanja – being a realtor is certainly a complementary field, and helps keep the cash flowing when you’re in between real estate deals. It also means not having to wait for an agent to be free to walk you through a property that may be a great deal – as I’m sure you know, the best deals go fast when they’re listed on the MLS.

  7. Christy Greene

    Being a small business owner, many people have expressed to me that they wanted to be a business owner. What I have learned from these conversations is that what they really desire is have the freedom to make their own choices regarding their time. They think that if they are their own boss, they can come and go whenever they feel like it, make tons of money, and live a life of leisure. What they don’t realize is that with freedom comes many responsibilities. There is a reason that there are more employees than there are employers. The mindset of employer is to make great sacrifices, they are long term thinkers, they can delay self gratification for long periods of time for the greater vision, and are self disciplined.
    Before someone sacrifices the many benefits of being an employee, such as a regular paycheck, insurance benefits, paid vacations, that MOST people should start out small. For example just part time and then as they increase their side business, phase out their full time job. I say “MOST PEOPLE” because most people wont even get their side business started or they start it and find out that they don’t have the motivation to do what it takes to do both, let alone the one job AND all that life throws at them. You have to want it so bad that the long hours, no to little pay, the isolation, and everything else that can come with a small business, is a price that you are willing to pay.
    I have to agree that the individuals that are able to work part time while starting up another business is a good way to find out if you even want to go down that road.

    • G. Brian Davis

      So true Christy. With freedom comes responsibility, and most people either don’t want or can’t handle that much responsibility and discipline.
      I heard a very smart woman say once about entrepreneurship “If there’s anything, ANYTHING else that you think you’d be happy doing, go do that instead. Starting a business is just too hard without a burning desire driving you forward.”

  8. David Hendrix

    Most folks do not understand the full cost of health insurance. Most employers pay for 70% to 85% of the health care premiums for their employees and then pass on the rest of the cost. You will probably never find healthcare at the same premium levels and with the same coverage as you had when you had the W-2 job. I know that some, have gone without healthcare insurance. To me that is too big of a risk to take.

    In the end, you need to identify the real cost of this expense for your family and factor that into your monthly total budget. If you can cover all of your expenses including healthcare coverage, then you’ve made it.

    • G. Brian Davis

      No question, healthcare in the US is exorbitantly expensive and getting more so. I wouldn’t be surprised if we started to see groups of real estate investors (and other groups of the self-employed) starting to form loose cooperatives to try and negotiate for lower-cost group health insurance.

  9. Michael McFarland

    I have always wanted to work for myself and it seems real estate is going to afford me to do exactly that. I worked in the oilfield and with the prices down, I was laid off. So it is not that I wanted to start cold turkey, but since I am there, there I will start. I am not a “newly” in real estate, but I am re-learning things that I knew previously. The basics are still the same, I just need to quit “getting ready” and just take the next step. Bigger Pockets and their community are helping me… Thanks

    • G. Brian Davis

      I’m sorry to hear about the layoff, I was laid off once myself and know how jarring it is. Your whole world turns upside down.
      Are you planning on jumping right in as an investor, or starting as a realtor? There are some advantages to the latter, although it obviously comes with its own set of responsibilities and drawbacks.

  10. Patsy Waldron

    Great post, very lucid. I think the lack of structure is the hardest part at first, but with a to-do list along with an estimate of how long each thing takes to do, it becomes easier to get things done. Health insurance is definitely a HUGE factor to consider when deciding whether to quit the W-2 job- if anyone in the family has chronic conditions, or there are accident-prone teenagers, it may be a bad idea.

    • G. Brian Davis

      Thanks Patsy! Structure and health insurance definitely trip up a lot of people who make the leap, especially those who jump a little early. It sounds like you’ve successfully cleared these hurdles, albeit with some extra headaches from teenage children!

  11. I am thinking of phasing out my city planning business and adding more rentals. I have 5 rental homes with a total of eight rentals. I am buying another house tomorrow that I may renovate and flip instead of rent so that I can buy 2 more rentals. All of my properties are historic so I need to stay on top of maintenance so I stay pretty busy with that. How many rentals equal a full time job so that I can close my other, less lucrative, planning business?

    • G. Brian Davis

      Congratulations on your pending settlement tomorrow! Very exciting.
      As for your question, I wish I could rattle off “10!” as the answer, but it just depends on your expenses, and what kind of cash flow you get from each rental. Someone with $3,000 in monthly expenses will have a much easier time switching to rental income only, over someone with $6,000 in expenses.
      Also, if you have no mortgages on your rentals, you don’t need many in your portfolio to be financially independent. If you’re mortgaged to the hilt, you could have 20 rentals but not have much cash flow.
      But it’s a good exercise, to sit down and figure out your minimum monthly expenses, and your average monthly cash flow from your rentals, to determine how many more you likely need to “retire.” Have fun with it, and look for ways to slim down your expenses. You can always raise them back up later if your cup runneth over!

  12. Joshua D.

    Thanks Brian!
    I needed this badly… As our net rental income approaches the same dollar amount I make at work, it gets more and more tempting to think this way. Number 9: is my biggest struggle, I like the growth pattern I currently have and it would be sad to stunt it. I would miss my work environment as well.
    Thanks for a great article.

    • G. Brian Davis

      Glad to hear it was helpful Joshua! It’s definitely tempting to quit, but all too easy to do prematurely. I’ve been both W2-employed and self-employed (several times over) at various times in my life, and there are advantages to both. Sometimes you get so frustrated with work that it’s easy to lose sight of the advantages to being employed, aside from the paycheck.
      Best of luck making your decision, and whatever you decide, taking your time with the decision will help reassure you you’re making the right move.

  13. 7.Living With Uncertainty & Anxiety – that’s what’s really stopping most of the people from going freelance. Experts though are highly praised and sought after worldwide, so becoming really good at what we are doing and be active in finding work, we shouldn’t be worried about our financial future.

  14. Steven Bonfante

    Thanks for the post Brian. Many good points to consider.

    I recently became unemployed just as my wife and I were ramping up our efforts for our first rehab purchase. Needless to say we backed off. I am struggling between considering this a setback or a forced opportunity. Maybe it’s both.

    Where I could have easily qualified for purchase and rehab financing for the properties we were looking at this is now forcing me back into research mode on more creative financing. I have no rich relatives so reaching out to lenders\potential partners is a point of anxiety\procrastination for me. Also, my analysis paralysis is getting the best of me.

    Glad I found Bigger Pockets. It’s a great community.

    • G. Brian Davis

      I’m so sorry to hear that Steven. Being unexpectedly unemployed is pretty devastating, and in some surprising ways such as identity questions. I know you didn’t ask my advice but I’ll give it anyway – if you’re really thinking about becoming a full-time real estate investor rather than finding a new job, find an experienced partner. You’ll undoubtedly put in the lion’s share of the work, but your partner will introduce you to lenders and help you get financing, and they’ll help you avoid bad deals. You’ll learn a lot, and bypass a lot of costly mistakes you would have made otherwise.
      Best of luck!

  15. John Murray

    I’m a very lucky guy, when I went full time (investor) it was decided in a 3 day period. I’m not a team player and never enjoyed working with others. I don’t play well with others and when I quit my job as an electrician I was worth about $1.5M at age 56. I sold my big ass home and extracted about $400K and cashed in my Deferred Comp for about $120K cleared after taxes. I started in BRRR and now I’m worth about $2.5M with about $60K in passive income from rent profit and another $40K from retirement. I pay $1300 a month for health insurance and life is much more enjoyable since I pulled the plug. A big factor is happiness, to sit in an office would just about do me in listening to people and their drama, problems and how bad they have it.

  16. Great point on the qualifying for loans. I think getting your schedule E looking strong would be a prerequisite for quitting your day job and still being able to qualify. Two years of good profit and that’s after any rehab or lean years the building experiences initially. I’m currently at 22 units with 80K net and hesitant to quit my W-2, but i think about it every day, always pushing for a little more to soften the transition.

    • G. Brian Davis

      That’s fantastic Greg, congratulations on that solid rental income!
      One thing to keep in mind is that whatever your next step is, you can always find more ways to bring in money. When I “retire” I won’t be sitting around – I’ll just be moving on to something else.

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