Personal Finance

10 Challenges to Seriously Consider BEFORE Quitting Your Day Job

Expertise: Landlording & Rental Properties, Real Estate News & Commentary, Personal Finance, Real Estate Investing Basics
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Quitting your 9-5 and becoming a full-time real estate investor! That’s living the dream, right?

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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!

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, he offers free rental tools such as a rental income calculator, free landlord software (including a free online rental application and tenant screening), and a free masterclasses on how to reach financial independence within 5 years.
    Beth Hughes
    Replied over 4 years ago
    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.
    G. Brian Davis from Baltimore, MD
    Replied over 4 years ago
    So true. It’s scary, being self-employed. But as you mentioned, it can also be extremely rewarding!
    Steven Bonfante from Neptune City, New Jersey
    Replied over 4 years ago
    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 from Baltimore, MD
    Replied over 4 years ago
    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!
    John Murray from Portland, Oregon
    Replied over 3 years ago
    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.
    G. Brian Davis from Baltimore, MD
    Replied over 3 years ago
    Wow that’s great John! And I hear that about sitting in an office and listening to people whine and complain. Talk about a recipe for mediocrity!
    Replied over 3 years ago
    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 from Baltimore, MD
    Replied over 3 years ago
    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.
    Tyler Chartrand Investor from Scottsdale, Arizona
    Replied over 3 years ago
    thought about it…quit last year a 92K job and havent been happier. time is your most valuable resource corporate america is SLAVERY
    G. Brian Davis from Baltimore, MD
    Replied over 3 years ago
    Amen Tyler!
    Kou Moua Accountant from Clovis, Ca
    Replied over 1 year ago
    These still hold true today for many and to me, it most astronomically makes sense that my employer will not make me rich, but only hold me to bondage until they are done with me. Being self-employed or entrepreneur is the way to create unlimited wealth and income, while building an asset thumping machine!
    Don Taylor New to Real Estate from Raleigh, NC
    Replied over 1 year ago
    I love the BP community, I've been desperately wanting to quit my 9-5 but now I realized that it's a safety net. Who says I can't do both