Real Estate Investing Basics

Should You Quit Your Job To Pursue Real Estate Investing? We Did… And This Is What Happened.

3 Articles Written

Cold Turkey Update

In case you haven’t been glued to the last two posts I wrote, let me catch you up.

My husband Aaron and I are stability-challenged and now stability-deprived, as we decided to leave his well-paying – and life-sucking – career as a corporate pilot in California to move into my parent's basement in Colorado to pursue real estate investing full-time.

We pursued real estate investing for 2 years in California without a single purchase and had six months living expenses saved up to flip our first couple of deals and get on our feet.

We also had a large amount of capital for purchasing houses and construction costs.

My hubs and I split time between the business and our other business of raising two precious children.

The business, since we moved here, has been a dream come true!

It has been a breeze and we have sailed smoothly and easily into full-time real estate investing.

I don’t hardly know what to do with all the money we’re making and the song Somewhere Over the Rainbow has become the theme song for my life. It’s AMAZING!… and then I woke up from the dream into my reality.

It’s been FREAKING hard, guys, let me catch you up and hopefully save you some of the struggle we’ve experienced.

I continue to write and rewrite this post, as things have changed and shifted quickly and drastically.

We have now been in Colorado for nine months and although we initially had a bunch of leads (from bandit signs which we discontinued a couple months ago due to every city contacting us to take our signs down and few of them threatening to arrest us) none of them were converting to deals and we were discouraged and quickly becoming broke.

Aaron interviewed at several flying jobs and although he is highly qualified, nothing was panning out.

Our situation was down to the wire when our first deal came through.

We got a lead from a local investor (and now friend and sometimes partner). He got the property under contract and we wholesaled it to an investor for $24,000!

Even after splitting the profits, not such a bad first deal, eh?

We realize this amount is an unrealistic expectation in general, but hey, we’ll take it.

Since then, we have gotten two listings, transferred three wholesales and are under contract on our first rehab (we close next week for a $35,000 profit).

I know crazy, right??

So let me summarize what we have learned in these past months and what we plan to do going forward.

1) Don’t Set Static Marketing Goals

Wait, what?

You have to set marketing goals, right?

Definitely, but don’t set static-type  marketing goals, set growth-type marketing goals (I’m sure there are fancier names for these, I just made that up).

A growth-type goal may be to increase your direct mail marketing addresses by 500 mailers a month, every month.

A static-goal would be to reach 2,000 mailers a month.

 See the difference?  

My general growth plan is to continue to grow the marketing until we have mailed to every distressed property address in all of Denver and to explore every form of marketing available and either implement or eliminate the type of marketing we try.

You HAVE to continue to grow your marketing and as soon as you place a ceiling on your marketing, you will put a ceiling on your business. A portion of every profit you make on a deal has to go back into expanding the marketing. Treat your marketing like it is its own business.

2) In a Competitive, Active Market, Consider Becoming A Jack-Of-All-Trades

Our original plan was to solely buy flip investment properties but we have quickly realized that in such an active, competitive market, we need to be a jack-of-all-trades.

It practically kills me to receive a bunch of leads that we end up having to turn away (or when we are turned away by the seller) almost all of them because they don’t fit our narrow margins for a flip.

In response, we have switched gears to being a full service real estate operation.When we get a lead, we ask a bunch of questions and fit the seller and home situation to the best of three options: wholesale, fix and flip, or pass the listing to a Realtor for a referral fee (in CO you have to be a Realtor to collect a referral fee).

Yes, we would prefer to be flipping houses, it's really the best fit for our experience and passion, however, this market with its level of competition does not support that narrow focus (it's important to note here, that we could be flipping houses even in this market if we were to narrow our margins significantly but we feel responsible to protect the source of our funding and don't have that option).

If you are in a difficult market, you have to learn to listen to the heartbeat of your market. Tune your strategy to what you hear.

And when you have a multitude of leads coming in, you can hone into your core business plan.

Related: Should You Be a Jack Of All Trades And Master Of None?

3) Skip the Absentee Letters

If your marketing budget is small, you can only mail to so many addresses. So start with addresses you have dug deeper for, don’t use the list that everyone else uses.

You will have more competition and there is a smaller percentage of motivated sellers in an absentee list than, for example, probate or past due taxes, etc.

You can obtain leads with the absentee list, but you’ll get more if you do more work than the next guy. And, once you’re business is cranking you can still add in the absentee addresses!

4) Don’t Fix What isn’t Broken

We were getting roughly 8-10 leads a week for several weeks and decided to make some changes in our street sign program. It was a huge mistake in hindsight!

If what you are doing is working don’t get greedy, just keep doing what you’re doing.

5) Network

I kind of hate networking. My husband goes to REI night meetings and I hate them. We work so hard all week and then also go places at night? We deserve some time off!

Well, I don’t know who I think is going to give me all these things I “deserve” but while I’m waiting my business will be wasting away.  AND, we’ve met amazing people through networking.

6) Don’t Quit Your Day Job

If you have an option at all to keep working while you’re building your business, even if it means working nights and weekends, do that.

You will quickly run out of time if you go cold turkey. Oh, and you’ll be really stressed to boot!

In our specific situation, it was a decent decision, but don’t do it unless you don’t have another option.

Don’t give up… this business is not easy!

Part of what makes many successful investors, successful, is perseverance.

Persevere longer and smarter than those around you and you will make it out on top. We haven’t gotten there yet but we will…

Switching Gears

I promised some guidance on how to build the graphics of your website and I don’t want to leave you hanging.

However, I think it’s really important to note that you can and probably should get started without a site. You can certainly start making phone calls to Craigslist, send out direct mail, and connect with wholesalers all without a site.

However, some potential sellers will want to research your business further and a website will eventually be invaluable for generating leads when you work on your Search Engine Optimization (SEO), so it will be important to develop your site at some point.

But where the heck do you even start?

And if you don’t have a design background and can’t afford to hire a designer then you may as well not even have a website, right?

It can be super overwhelming to build a site but it doesn’t have to be!

Lets break it down and see (side note: you can create a visually pleasing site without a designer but if you have the cash, a designer will take you to a whole new level of cool and save you valuable time. I am not a graphic designer. My background is in architecture. My thoughts come from that somewhat dormant design recess of my brain).

I highly recommend following Brandon Turner’s post  to get started. We built the first draft of our site in August and although it took a little longer (ok a lot, but I’m pretty detailed and we built a fairly big website with several pages) than an hour, the drag and drop type of site that Brandon recommends and I used was ridiculously easy!

Here’s some things I conjured up from my design background/learned along the way

Basically the gist of designing a killer website is to start broad and add detail as you go. Use examples of other websites for just about everything, but make sure to make your site your own.

Related: 5 Simple Strategies For Real Estate Acquisition Domination! (You are Going to LOVE #5!)

1) Content Type

Do a little research and find 5-7 real estate investor websites that you like.

Look at the types of content that they have. Decide what type of content you want for your site. You’re not writing content in this step, you’ll get too bogged down.

Decide if you want an FAQ section, do you want an introduction about your business, do you want to explain the process of how you do things, etc. Decide whether or not you’re going to start with just one page or will you have several.

2) Page Layout

Now you’re ready to make some decisions about the page layout. By layout I mean the general look of the site.

Start with your Home Page.

Use your investor websites as examples and search in Google images for “great simple website designs” for more ideas. You will definitely want to include a contact form on your home page, so start with locating that and work around it.

Use rectangles to represent your content to get a rough idea of where it will go.

Look at what sites look appealing to you and decide what about that layout is appealing. Model your site after those. Use a lot of examples and then MAKE IT YOUR OWN.

3) Colors

So you want the site to have cool colors but where the heck do you start?

Even with a design background in architecture and pretty good knowledge about color, etc., this part was SUPER hard for me, too.

So here’s what was really helpful to me.

Select a color that you know you want to use. For me it was green (since that’s the main color in our logo).

Go to Google images, and type in “green color combinations” and a gazillion pictures of rooms, etc. will pop up with that color combined with other complimentary colors. Choose a combination that you like and build your site colors around it.

Pretty easy, right?

Make sure to use a simple color palette, no more than 3 colors. You can add a wide range of neutral colors on top of that and wallah!

You have an awesome, dynamic color palette.

4) Other Pages

These can be pretty easy. They typically include a lot of verbiage and can be a really simple design that is standard for all your pages other than your Home Page.

5) Content Development

Writing your content is going to take days if not weeks, won’t it?

It doesn’t have to!

If you want to write totally unique content and are going to have several pages, then yea it’s going to be overwhelming.

BUT you can pull up like 6 or 7 investing sites that you like and grab inspiration from those sites. Don’t worry! We’re not joining the Plagiarizer’s Club!

Use their content to inspire your own – but do not copy it.  Simply look for the kind of content they included and use it to inspire your own writing.  Do the same for each of your sections and you’ll be done before you know it. The hardest part of content creation is coming up with ideas to talk about, so using this strategy takes the guessing out of the main themes. Draft an outline of important topics you want to cover, and simply fill in the outline with a paragraph for each section, written by you.

For example, most sites have a Frequently Asked Questions section. So, you’ll have a bunch of FAQ’s listed from a bunch of different sites. This will give you a good idea of what others feel is important to talk about.

This part took me like an hour or so before I had a rough draft for the entire site, that clearly depicted what we wanted to say.

And you want people to actually read your content, right?

Make sure to choose font sizes that are large enough that you don't lose people's interest, and don't get too wordy.

This should give you a decent overview. It will take some time but it’s definitely doable!!!

Checking In

How are you doing these days in your business?

What ways have you seen your attitude affecting your business positively or negatively?

What advice would you give that has been helpful in your journey?

What trials did you have to persevere through to gain success as an investor?

And here’s where I insert my shameless DESPERATE REQUEST for advice and thoughts on how a little-bit-less newbie-ish newbie goes from a handful of deals to a thriving sustainable business and eventually to conquering the world… or at least Denver!

Our vision is HUGE, but our understanding of how to get there (other than continuing to increase our marketing, thinking outside the box, outsourcing everything like crazy and keeping our perseverance) is struggling – HELP!!

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Amanda and her husband Aaron went cold turkey from their day job and entered the world of full-time real estate investing in August 2013. When she's not marketing for or fixing up houses she loves...
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    James Pratt
    Replied over 6 years ago
    Amanda, it’s really great when husband and wife want the same thing and willing to do anything to make it work. Trust me, I know because my wife fought me every inch of the way. In time she realize that I was doing pretty good allowing her to go shopping EVERY DAY! A lot of people just don’t understand all the details that’s involved when investing in RE. I never join any clubs, have a web site or any kind of mailings, just perseverance at what I like doing. For me buying-rehabbing property is better than any drug and a whole lot of fun. All the best in your endeavors, just KISS and have a blast.
    Amanda Fox
    Replied over 6 years ago
    James, man I hear ya. I take it for granted all the time that Aaron and I are on the same page, so glad for you that your wife eventually came around! And awesome, too, that you’re able to persevere in this business lone ranger style!!
    Amanda Fox
    Replied over 6 years ago
    James, man I hear ya. I take it for granted all the time that Aaron and I are on the same page, so glad for you that your wife eventually came around! And awesome, too, that you’re able to persevere in this business lone ranger style!!
    Amanda Fox
    Replied over 6 years ago
    James, man I hear ya. I take it for granted all the time that Aaron and I are on the same page, so glad for you that your wife eventually came around! And awesome, too, that you’re able to persevere in this business lone ranger style!!
    Amanda Fox
    Replied over 6 years ago
    Forgot to ask, what’s the latest with your biz? What have you found to be helpful to keep you going in harder times?
    Glenn Schworm
    Replied over 6 years ago
    Ok guys, you have been on my mind a lot over the past few months and I have been wondering if you were still in the game. Way to go! Good for you both, I am really proud of you guys. I really like this part of your article: “Don’t give up… this business is not easy! Part of what makes many successful investors, successful, is perseverance. Persevere longer and smarter than those around you and you will make it out on top. We haven’t gotten there yet but we will…” There is no question if you stick it out longer than the 99% of people who quit, that you will be successful. I knew you guys had it in you but also knew you needed to figure out how to make it work and how to make it fit into your already crazy lives. Sounds like you are well on your way. Each deal makes you more knowledgeable, more confident and all around more experienced. We never stop learning..Never! I am really proud of you guys. Give me a call next week so I can hear more details. I am very excited for you!!!! $35K on your first flip? Nicely done!! So cool. Amanda, you have a very Happy Mothers Day because I know you deserve it. Take some of that money and do something very nice for each other, it will make you work harder for the next one!
    Amanda Fox
    Replied over 6 years ago
    Glenn, that is the most encouraging comment!! Things were cranking but have slowed way down and we need some encouragement right now. We will definitely call next week to connect and could definitely use your advice as well!
    Mark Ferguson
    Replied over 6 years ago
    Awesome! I’m glad to hear you have found some success! If you have any wholesale deals in northern Colorado be sure to let me know! 🙂
    Amanda Fox
    Replied over 6 years ago
    Will do, we’ll add you to our buyer’s list and will let you know. Wish things were cranking more than they are now, but we’ll get there!
    Amanda Fox
    Replied over 6 years ago
    Mark, how’s it going these days? Have you guys been able to keep finding good deals or have things slowed down on your end as well?
    Replied over 6 years ago
    Great blog! Very inspirational. At some point, I too want to make the plunge into full time REI, so hearing your stories are really helpful. I hope you keep blogging about it! I had a question: Was the reason for leaving Cali the fact you couldn’t get a deal during those two years? Did you change strategies in CO or are you doing the same things only the market is a better fit? Do you think that given your experiences now, you could make REI work in Cali if you had to move back? I ask because I’m originally from So Cal and would like to live there again in the future. Anyways, I wish you more continued success and Happy Mothers Day!
    Amanda Fox
    Replied over 6 years ago
    Dan, great questions! We left CA more for personal reasons (mainly my husband being in a crap job and my parent’s having a free rent open basement for us to crash in until we got our feet on the ground in REI). HOWEVER, the market in the San Jose Bay area and Santa Cruz were MUCH crazier than here. The competition was nuts, even the most distressed falling down houses were getting bid $50,000 above list price, with 10+ offers, 8 of those being all cash. It was super hard, ON THE MLS. We never marketed when we were in CA, so I have no idea about marketing. We switched gears because of everything we learned on BP and switched when we moved to CO. While we were still in CA, we were under contract at least 6 times but had to back out every time because the margins ended up being too tight. I kept wanting to tighten the margins more so that we could close a deal, but given our experience on our first flip here in CO, I’m so thankful that my husband didn’t budge on keeping a larger profit margin. Good luck, and keep me posted!!
    Jeff Pollack
    Replied over 6 years ago
    Great, all encompassing, article Amanda. I especially like the advice to be a jack of all trades. This is huge. Given the time and money required to get the phone to ring it is all about monetizing all your leads. If you’re focus is narrow you leave money on the table. You mentioned that in CO you need to be a realtor to collect a referral fee. A way around this is to collect a “marketing fee” from the agent to whom you pass leads that are short sales or straight listings. Happy Hunting! Cheers, Jeff
    Amanda Fox
    Replied over 6 years ago
    Oh nice, appreciate the advice, I’ll have to check in CO (unless you already know that applies in CO?). Incidentally for “newbies” who might be reading these comments, we are pretty heavily leaning towards not continuing to keep Aaron’s broker’s license. We feel this to be a conflict of our own interest and undermines our ability to purchase houses, and really believe in the business model of outsourcing absolutely every part of our business possible. We don’t have the time to be listing our own properties and facilitating our own deals. We’d rather spend our time hitting the pavement (or at least managing our “hitting the pavement” people) and getting new deals.
    Doug Davison
    Replied over 6 years ago
    I would also recommend that if you are buying to rent, you should consider doing a few of these while you are still employed and banks are willing to loan you money so you can get some positive cash-flow going. Save your capital and use the banks money as much as possible and then when you quit your job, you’ll still have all your capital to continue investing. Typically, a bank will not consider any of the income you make from property rentals or any kind of self-employed sources unless you have a 2-year history of doing it. Then, they will either average the two, take the most recent or take the worst year. This also applies to home equity lines of credit on your primary residence or refinancing if your rates are better elsewhere. Do all that first before leaving your job. Banks love stability and have very little discretionary decision making when it comes to this. They value the income from your day-to-day job better than your accumulated capital.
    Amanda Fox
    Replied over 6 years ago
    Such a good point, Doug, and great advice to add to why you should keep your day job as long as you need to. Appreciate it, it just generally gives you better leverage all around! Sometimes, as in our case, you’re up against a wall and you just gotta do it.
    Replied over 6 years ago
    Awesome update. After seeing your first articles here and some of your forum posts on your marketing it is great to see that some of those struggles were overcome and you are doing some VERY nice deals now! Even if you are hitting some more bumps keep at it. You have proven to yourself that you can do it. That is the biggest thing. Keep persevering and righting your course and you will build on these first few successes! Look forward to hearing about the next round of great deals!
    Amanda Fox
    Replied over 6 years ago
    I really, really appreciate it Shaun! It is hard to remember those things when you’re back in the thick of it, I really need to hear that advice. What’s the latest with your business?
    Replied over 6 years ago
    Having a hard time finding good deals. Seems to be common problem. 🙂
    Amanda Fox
    Replied over 6 years ago
    Ugghh, hate it! It only makes us stronger, right? At least that’s what I keep telling myself. What are you finding to be helpful?? Tax delinquent letters have started to be pretty good on our end. And we’re in the process of launching a new program where we offer an incentive paid once we close on a deal to homeowners living on street light or stop sign corners to place our sign in their yard. That’s our latest, anyway.
    Replied over 6 years ago
    Congrats on the move! Great post!
    Amanda Fox
    Replied over 6 years ago
    Thanks Jimmy! What’s the latest on your end??
    Replied over 6 years ago
    Copying other websites is a dangerous game. The U.S. Copyright office states “you cannot claim copyright to another’s work, no matter how much you change it, unless you have the owner’s consent.” [see I’ve had several works of mine copied illegally, including in a book (the publisher ended up sending me a check after I pointed it out), and been sued once for a copyright issue as well. Copying the work of others is a real no-no, and in most cases considered plagiarism. Instead, take those 6-7 pages to get *ideas* (ideas cannot be copyrighted). Then, write everything from scratch. You can still get into trouble that way, but it is much, much less likely.
    Amanda Fox
    Replied over 6 years ago
    Brandon revised that section of the article, hope it’s a much safer explanation/suggestion. Thanks for the heads up! Amanda
    Replied over 6 years ago
    Good work; I appreciate the effort you put in to updating the article.
    Amanda Fox
    Replied over 6 years ago
    Sounds like you’ve had a lot of issues with Copyrighting and I completely understand that you are super careful with that issue. If you read again from my article, I am by no means endorsing people to copy other people’s copyrighted (or un-copyrighted) work or words into there website or to copy any part of a website into their website. We use inspiration and gain insight all around us all the time, I tried to make it clear in my article that that is the intention. If people are more comfortable just reading good ideas from websites and writing their own words, than that’s great. It is really critical for anyone, for any number of reasons to create their own work and to not take someone’s hard work and call it their own. Thank you for reminding all of us about copyright issues, it was an education to read the information on the link!
    Amanda Fox
    Replied over 6 years ago
    Scott, thinking more about your comment and my reply. This actually was really helpful for me to read and I really appreciate your distinction between getting ideas vs. heavily editing. There is a fine line in “heavily editing”. And probably better and safer to just generally gain an understanding of what types of content one wants to include from sample websites and then completely write the information themselves. Thanks again, really appreciate it!!
    Amanda Fox
    Replied over 6 years ago
    Scott, thinking more about your comment and my reply. This actually was really helpful for me to read and I really appreciate your distinction between getting ideas vs. heavily editing. There is a fine line in “heavily editing”. And probably better and safer to just generally gain an understanding of what types of content one wants to include from sample websites and then completely write the information themselves. Thanks again, really appreciate it!!
    Amanda Han
    Replied over 6 years ago
    Great article! My suggestion also is get loans before you quit….this is a common mistake I see because once the W-2 is gone…so are he borrowing abilities for bank money =(.
    Amanda Fox
    Replied over 6 years ago
    Appreciate the advice so much! And so true! I think, also, people often think it will take much less time than it does to get the business going and so many never make it. It’s too risky in probably most situations to quit your job before you have a sustainable business. Amanda, how are things going in your business?
    Travis Daggett
    Replied over 6 years ago
    Great insight on marketing goals! Thanks!