A common goal for new and aspiring real estate investors is to eventually quit the 9 to 5 and go full-time. Many young investors dream of the day they storm into their boss’s office, declare their intentions to quit, and ride off into the sunset of the perfectly successful investing career. Late night infomercial gurus often romanticize and over-simplify this idea. Fortunately, most investors can see past the sales pitch to understand that real estate investing is hard work. One cannot haphazardly launch an investing career, abandon all forms of steady income, and expect to magically be successful.
One of the greatest attributes of the BiggerPockets team and community is the realistic and transparent approach that is taken with this very topic. Josh and Brandon often provide a word of warning to readers/podcast listeners that quitting a steady-paying job is serious business. I whole-heartedly agree! If quitting your day job is your ultimate goal, you must manage your emotions and take a practical approach toward achieving your liberation.
I quit my very good-paying corporate job two years ago. Since that day, I have never looked back. I hope you can have or have had the same experience. However, it’s essential to understand that becoming a full-time real estate investor requires a solid plan, an impermeable support network, and some serious guts. Don’t jump in and expect your adrenaline to take over. Transitioning to full-time entrepreneur takes time and patience. Below is an outline to get you started.
My advice for planning your exit is to work backwards. Start with where you want to be and backtrack to find out the practical steps you need to take to get there.
Have you thought about what your real estate business will look like? What strategies will you employ? How quickly will your business grow? How many deals will you do? Given your specific market(s), what will the number of deals mean to your bottom line? Given your bottom line, how much can you pay yourself before investing more in the business? Is this amount enough? If not, how many more deals will get you to where you need to be? What does a typical day look like for you? Does your workload change as your business grows?
The answers to these questions will help to craft your vision for your investing career. It’s impossible to know exactly how things will turn out, but you need to have a destination before you embark on your journey.
Now you’ve established what your business needs to look like before quitting your cushy job. So, what are the steps that will get you there?
For starters, focus on the quantitative attributes of your future business. What is the “breaking point” in number of deals you need to do to be able to support yourself full-time? How does that compare to your current business? What action can you take to fill that gap?
Also, consider the qualitative aspects of your business. It’s one thing to have the revenue you need to quit your job, but what about sustainability and quality of life? Do you need to ramp up employees and/or third-party contractors? Do you need to look into a more robust technology system? Do the answers to these questions impact your bottom line numbers from above?
Understanding the steps you need to take toward your quantitative and qualitative vision allows you to develop a very tangible action plan. This is the blueprint for your transition out of the corporate world.
Now comes the hard part — execution! Your plan will be utterly useless unless you are able to consistently execute the exact steps laid out in your plan. I’ve found the very best motivator is to focus on the “why.” Ask yourself exactly what it will mean to you if you are able to execute your plan and leave your day job.
Will you be happier? Will your partner be happier? Do you have the potential to make more than you ever could have at your corporate job? Will you be able to travel? Can you give back to your community?
Whenever you are feeling a lack of motivation to work through your action plan, come back to, “Why am I doing this in the first place?”
Many entrepreneurs find journaling to be a great way to reinforce their motivation. Personally, I take five minutes each morning and five minutes each evening to re-write the steps I am taking to grow my business. During my transition period, I would constantly journal to remind myself of exactly what I was seeking in going full-time.
It took me exactly eight months to transition out of my job as a strategy consultant. During this time, I focused on padding my savings and building my business for maximum revenue once I left. One of the best things I did was to provide three full months’ notice to my superiors! This may not be practical for you, but it gave me a great sense of relief knowing that I wasn’t leaving my employer “high and dry” without the opportunity to find a replacement. In addition, the three months’ notice provided me with a mentality of “no turning back now.” I was working my plan, and I needed a solid cutoff date to get me to the finish line.
The day I gave notice, the best part about the discussion with my boss was answering the question: “May I ask what firm you are going to?”
I could tell my boss was going to attempt to keep me around. Maybe they could match my current offer and convince me to stay? I felt so much joy answering with, “I’m leaving to pursue my passion for investing in real estate.” There was no competing firm. My boss understood that there was little he could do to convince me to stay.
There is no doubt: Life as a full-time entrepreneur is a lot tougher than working a steady job. You — and you alone — are completely responsible for the revenues you generate and the pay you can take home to your family. That being said, my quality of life has increased exponentially. I wake up every day with a burning passion to learn, make deals, and grow my business.
It’s certainly possible to make a full-time living with real estate investing. BiggerPockets is filled with real-life examples! If you are interested in making this transition, please go about it responsibly and with a well-thought out plan. Seek help from those who have already done it. You can greatly mitigate your overall risk by understanding what it is you are after and the tangible steps that will get you there.
Create the vision, build the blueprint, execute!
Investors: Is your goal to quit your 9-5? How are you planning your exit?
Let’s talk in the comments section!