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Rookie Reply: Want to Be a Full-Time Investor? Learn These Skills!

Rookie Reply: Want to Be a Full-Time Investor? Learn These Skills!

19 min read
Real Estate Rookie Podcast

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This week is less of a Rookie Reply, and more of a “Rookie Ramble” as Ashley likes to call it, as Tony and Ashley ask each other questions about their road to full-time investor status. They talk about first jobs, best degrees for real estate investing, the industries they chose to go into after college, and the skills they wish they had learned earlier.

Both Tony and Ashley didn’t have the end goal of investing in real estate upon graduation, but they made smart choices in their W2 careers that allowed them to go full-time when the opportunity presented itself. If you’re young or even just starting out on this real estate journey, ask yourself, “what skills do I need to develop to succeed at this?”

If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Ashley:
This is Real Estate Rookie episode 126. My name is Ashley Kehr, and I am here with my co-host Tony Robinson for another rookie reply. Tony, what is going on today?

Tony:
What’s up, Ash? Today’s a good day. I actually didn’t share this with you yet, but my son, Sean, he’s in eighth grade and he ran for ASB president. And we found out yesterday afternoon that he won. So he is officially class president. So my wife, Sarah, she’s the best at making people feel special when things like this happen. So this morning she woke up and she found a local limousine company. So we’re going to pick up Sean in a limousine from school and take him and his friends out to get ice cream afterwards, like the presidential treatment once he gets out of school today.

Ashley:
Oh, my God. Are you going to have the little tiny American flags and stuff for him?

Tony:
We might need to. Stick them on the car or something like that.

Ashley:
Oh, my God. That is so awesome. What a unique experience for him.

Tony:
So we’re excited.

Ashley:
I remember seeing on social media too Sarah making the posters.

Tony:
The posters were so great. So for those of you that don’t follow me on Instagram, I posted some pictures, my wife and I did, and we took a bunch of popular means and we repurposed them to be about my son’s election. So all the teachers were cracking up about it. So yeah, it seemed to go over pretty well with the kids too.

Ashley:
God, I really got to step up my game. I mean, I take my kid to the tractor store to pick out a toy tractor. Oh, man. That’s awesome. I’m so glad he won. Oh, that’s so great.

Tony:
I appreciate that. I guess the only other thing, we’re about to list our first Joshua Tree flip. So this will be a turnkey Airbnb that we’re selling in Joshua Tree. I’m sure by the time this one airs, we’ll probably already have it listed, but I’m excited to kind of get into that business. And I think there’s a lot of opportunity for us there to use our resources and our expertise in that market, and kind of build a more turnkey product for investors that want to get started in short-term rentals but don’t quite want the headache of having to rehab a property.

Ashley:
That’s awesome. I can’t wait to see how fast and how well it sells. The last property you sold, I mean, that was, what? A hundred thousand more than what you bought it for a year before that? That’s awesome.

Tony:
Yeah, yeah.

Ashley:
I actually just closed, so last Friday, so four days ago, on my flip, my first flip, accidental flip. And so I picked up the check yesterday and it was exciting.

Tony:
Yeah. One of the things that people always not hate on, but one of the things that people always say when it comes to flips is, “Oh, flipping’s cool, but you have to pay a lot of taxes.” Now let me ask you, Ashley, when you got your check, did they immediately withhold the taxes from your check and say, “Hey, we’re keeping 40%”? Or do you as the investor have the opportunity to take the entire check, and then based on how you land at the end of the year with your entire business is when you pay the taxes on that flip?

Ashley:
Well, you can pay estimated quarterly taxes, but no money comes right out of it. You’ll pay that at the end of the year when you file your taxes, or make quarterly payments. But since my husband is a farmer, we don’t have to make estimated payments based off of our income. But as the real estate income grows, we’ll eventually have to make those quarterly. Well, probably this coming year, we’ll have to make those quarterly estimate payments based off of that income.

Tony:
Yeah, but the good thing too is that, and this is what I’m working with my CPA on is, if you get designated as a real estate professional, then the losses that you make from your rental properties can offset your active income. And things like flipping, things like wholesaling, those are considered active income, so if you do a good job of managing your write-offs due to appreciation and things like that from your rental properties, then your tax liability on your things like flipping and wholesaling can get dramatically reduced as well.

Ashley:
Yeah. And that’s a thing we can use too for the farm income too, be able to offset it against the farm income to our rental.

Tony:
Yeah. Now we’re not CPAs. Right? So go talk to your CPA, get that checked out first. But I hear so many people say that. They’re like, “Oh man, flipping’s cool, but you pay so much in taxes.” And it’s like, “Okay, there are ways to leverage your entire real estate business to legally and ethically reduce your tax liability.”

Ashley:
Yeah. But also you factor that in when you do the flip. You can run that as part of your numbers. “Okay, this is what I’m actually going to net after I pay taxes on it.” And that number still may be way better than the zero you had before you did the flip.

Tony:
Right. And if you’re working a W-2, you’re paying taxes anyway. Right?

Ashley:
Right, yeah.

Tony:
So it’s like, you should be used to that. You know?

Ashley:
Yeah. The difference there is that you’re paying self-employment tax doing the flipping, compared to if you have a W-2 job, the company you work for is paying that self-employment tax for you or the employee tax, whatever. Yeah, we’re definitely not CPAs. Actually, I don’t know if I’ve ever said this before, but well, I was an accountant, most of you know that, for like six months, because I hated it, after college and I quit. But I did take one part of the CPA exam. I can’t even tell you what part it was, but flunked it. Failed it. And that was even more of like… It is a really hard exam to take, supposedly, people say. So I took one part of it and I failed it. I don’t think I flunked it. I don’t remember exactly what the score was, but I did not pass. And I think that was even more motivation for me to quit and decide that accounting was not for me.

Tony:
It was just not for you.

Ashley:
Yeah, because I like to succeed.

Tony:
Yeah. I mean, but six months, you gave it your best shot. Let me ask you this, Ashley. What was the shortest time you ever spent at any job?

Ashley:
It was the only job I ever got fired from. It was when I was home from college, I started waitressing in a restaurant. So all through high school, I worked at a dive bar restaurant as a hostess and waitress. And it was just a tight-knit group of people and super casual, no expectations, whatever, just fun. Then I went and worked at more of a corporate kind of restaurant, I guess, not really a chain, but it wasn’t as fun and just very different, a lot more structured. And there was a two-week probation period. And at the end of the two weeks, they said to me that I did not smile enough and they were not going to hire me.

Tony:
That was just so funny because if we look at Ashley today, it’s like, you’re one of the smiliest people that I’ve ever met. So they missed out, their loss.

Ashley:
That’s how miserable I was at that job.

Tony:
Soul sucking. Right?

Ashley:
That’s what it was. Yeah. What about you? What about yours?

Tony:
The shortest amount of time I spent in a job, I was in high school and I got a job at a local grocery store as a bag boy. And I had worked before. I’d been working all through high school and I got this job as a second job. So I was working two jobs in high school. And I was there for, I think, four weeks or maybe even three weeks. And I left after one of my shifts, and I just never went back. I didn’t pick up the phone. They were calling me, saying, “Hey, you…” I didn’t even go pick up my last check. I was like, “You guys can keep it. I’m fine. I don’t ever want to go back.” It was one of the worst jobs I’ve ever had in my life. Not something I’m proud of, but hey, you got to do what you like.

Ashley:
Looking back now at the jobs that you’ve had, the jobs you enjoyed, the jobs you’ve hated. Do you think there were signs, there were clues, there was red flags that kind of made you, like looking back now you can realize you were made to be an entrepreneur?

Tony:
I think I was tainted from the beginning because I knew when I was 16 that I wanted to work for myself. So I always knew that, “Okay, this isn’t my long-term thing.” I was always a great employee, just because I have strong pride in my work ethic, but I think it was hard for me to be that loyal employee that would give everything to this company because I knew at the end of the day, I wasn’t building something for myself if I did that, I was building something for somebody else.

Ashley:
Yeah. I kind of noticed that for myself. Look, I didn’t know that I wanted to be an entrepreneur at all, but looking back and looking at the different type of work environments, I definitely would have a really hard time going back to an office job or having a boss. Just having the flexibility and spontaneity that I do now, I think it would be really hard. But even in high school, looking at how I worked at that one restaurant where it was just like a dive bar, it was very relaxed. Everybody worked hard and did a great job because they enjoyed working with each other, and there was no strict rules. It wasn’t corporate, it wasn’t like a franchise, whatever. And then going and working at a restaurant that was, and then I worked a couple of retail stores in the mall throughout college. And just looking at those, geez, I did not like corporate structure or structure at all.

Tony:
And you see that with a lot of entrepreneurs, right? They’ve got this strong will that’s hard to kind of keep reigned in.

Ashley:
And a big thing about accounting too, was sitting at the desk every day and doing pretty much the same tasks over and over again.

Tony:
Every single day.

Ashley:
Yes, there was different companies you were doing, so they had different expenses or whatever, but really it was the same thing over and over day, whether taxes or auditing, the same steps, processes, and I just can’t do the same thing every day.

Tony:
Ashley’s not saying this to make fun of all the accountants out there.

Ashley:
Oh, no.

Tony:
So if you’re an accountant, don’t take this to heart.

Ashley:
I’m saying in my personality as to how I am that I function better and I have a better work ethic when I am not sitting at a desk and doing the same thing over and over again, and I enjoy it a lot better. But no, I think if anybody was going to go to college, they knew they were going to be a real estate investor, but still wanted to go to college, I would say, “Go for accounting.” It, I think, gave me a huge advantage as to understanding financials, analyzing the deals. And then also just doing the bookkeeping, I think, and understanding profit and loss statement, a balance sheet, how to actually record a transaction, I think definitely helped me a lot. What about you, Tony? What would you say would be a huge advantage if you’re were going to, had to go to college for something?

Tony:
Man, that is a great question. For me as a real estate investor, if there was one thing that I would go back to school for, I don’t know. I have a few things that jump out to me, right? I think a communications degree, and this might sound weird. Right? But I think a communications degree might help a lot because I feel like a lot of being a successful real estate investor is your ability to communicate effectively, right? Whether that’s, you’re communicating with your banker, you’re communicating with a potential partner. You’re communicating with your tenants. You’re communicating with whoever. I think being able to make a strong presentation and articulate your thoughts in a very clear way can be super beneficial. And I think a lot of people struggle with that. So I think that’s one thing.

Ashley:
So like a copywriter?

Tony:
Maybe a copywriter. That might work as well.

Ashley:
So just to give you guys a little backstory real quick, and I didn’t even think you would say anything close to this when I asked you this question, but when we were in Las Vegas, me, him and his wife were sitting, we were just… Low key night. We had interviewed everybody, and we were just sitting having a drink. And Tony says, “Let’s do this question game.” So it’s like instead of 20 questions, it’s like a hundred questions, but it’s super deep thought things. And one of the questions was, what was it? Like if you could be…

Tony:
Like if you could have any ability.

Ashley:
Oh, if you could have any super power, what would it be? And I can’t remember what me and Sarah said, but it was like invisible or superhuman strength. I don’t know, something. And he goes, he says, “Copywriting.” Copywriting would be his superpower that he would have. Just a little insight into the real Tony Robinson.

Tony:
Into the real Tony Robinson. And I stand by that answer. I still stand by it.

Ashley:
That is such a good answer though, communication, going for that, because think about content creation, how valuable and what a tool that is even for real estate investors today. Think about how many opportunities and connections. And we actually have a episode coming up. I think it’s episode 118. Oh no, we already did it. You guys already listened to it, so go back if you didn’t listen to it already. Katie on episode 118, it’s a Saturday episode talking about social media and the benefits of that and having really good descriptions when you’re doing a post, and really getting across what you’re trying to say. So that is a good point. What was the other thing you were going to say before I rudely cut you off?

Tony:
No, no, no. We’re good. So the communication piece is good. I think, like you said, the financial aspects, whether that’s accounting or that’s even like economics or finance, I think anything numbers related is super beneficial. I think the last one that I was saying, this one’s kind of out of left field too, but I think an engineering degree would help a lot as well. And here’s why. I started off my undergrad as an engineering major, and one of the things they pressed into me during my undergrad is that college for engineers isn’t necessarily about giving you all of the technical knowledge that you’ll need to be a successful engineer because you get that on the job. What college is really about is teaching you to think critically and solve really difficult problems.
And I think that skillset, if you really hone that over four years, that’s going to serve you probably far and above any copywriting, analyst, financial, whatever, being able to see a problem, think about it in a logical way, systematically break it down and then go after correcting that problem. I think that’s a huge ability and skillset to have.

Ashley:
Tony, that is such a good point. And that’s really interesting too, because my brother was over for the football game the other night, and he’s a senior in high school. And he said that he wants to go to school for engineering. And all of us were like, “No, don’t go to college. It’s a waste. Work with Ashley or go do this with dad,” and all these things. But he said he wanted to go for engineering, so it’s interesting you say that. But problem solving is definitely a valuable skill and asset to have.

Tony:
Well, we’re halfway through the episode. Hopefully, I haven’t lost everybody. We haven’t gotten to the meat and potatoes, but I think we dropped some good gems along the way. Right?

Ashley:
I mean, that could have been our meat and potatoes that we just did.

Tony:
That’s true.

Ashley:
A Real Estate Rookie reply ramble.

Tony:
Well, I mean, should we cut it there or should we go into what we wanted to talk about? Or do you feel like we dropped enough knowledge today?

Ashley:
Is there anything else we wanted to finish off with this topic? Like, okay, here’s a question for you, to keep it going. If someone is not sure the path that… They’re a young person right now, or maybe they’re starting over in their life and they can do whatever they want. How do they decide what type of job or maybe they’re not ready to be a full-time investor yet. And not even just the learning how to become a problem solver, the job itself, but how do they figure out what job they would actually enjoy doing? Like how we talked about, I enjoyed a freer, looser environment compared to a corporate, structured environment, and I worked better in that.

Tony:
That’s a really good question, Ashley, and a deep one, because I think it hits a lot of, I wouldn’t say lies, but maybe misconceptions that people have about their working career. I think for me, the purpose of my W-2 job was to help me achieve my goal of becoming an entrepreneur. My goal of my W-2 job was never to let that be my source of passion in life. It was never to be my source of fulfillment in life. It was really there to help me achieve my goals of one day working for myself. So for me, I had a big focus in my W-2 job of how do I quickly grow the income that I’m receiving from my W-2? So I busted my ass. I switched companies. I continued to bust my ass. I got promotions, saved a lot of money. And it was that foundation that I was able to build financially from my W-2 that allowed me to kind of step full-time into real estate investing.
I think there are some people that, and understandably so, because I feel like society kind of really pushed this idea, but there are a lot of people that think that their W-2 job has to fulfill so many different parts of their life, right? It has to be their passion. Like their job should be the thing that gets them up out of bed every day. And they’re like, “Oh my God, I love what I’m doing.” But really, if you can say, “Maybe I don’t love this job, but I understand that by me stepping into this position, it’s going to help me get to something I love,” I think that’s where you can kind of muscle through a lot of things that happen.
So for me, I think it ultimately depends on what your goal is, right? If your goal is to buy a bunch of rentals, you’re probably going to need a decent amount of capital at least to get started. So can your W-2 job help you achieve that? Right? Like David Green always talks about when he was a cop, he was busting his ass as a cop, working all kinds of crazy overtime, paying cash for all these houses, and eventually had this snowball going and then he was able to step away. So it’s like, can you follow that same kind of path for yourself? Because I think so often people get caught up in trying to find a W-2 job that fulfills all of their passions, that they end up kind of underselling what they’re really capable of. I don’t know. Does that make sense? Maybe I’m rambling. I don’t know.

Ashley:
It does. So having a why and having a goal outside of your W-2 can drive you to survive your W-2, is having that thing to focus on as, “This is why I’m working the W-2. This is why I’m grinding, so that I can focus on,” and not even caring if you enjoy it or not, because you’re going to enjoy the end result. And the end result is going to be that you can step away because of your real estate investments before you can step away if you rely on your pension at age 65 or something like that. And having that why to focus on, that’s interesting because you hear it so much as to, “This is why you’re hustling and grinding at night or early mornings on your real estate business, because of your why,” but you don’t really hear people talk about, “Oh, you’re hustling and grinding at your day job because of your why.” So it’s kind of like those two things you have to balance them out and make them both be reasons that get you closer to your goal and your why.

Tony:
Yeah. Well, what are your thoughts on that, Ashley? What advice would you have for someone?

Ashley:
I guess for mine it would be… I think that’s a really good point. That’s something I really thought of, what you said as to knowing that you’re doing it for a reason and you’re getting through it. I do see a lot of people who change jobs often because they want to find a better job, something that has more flexibility maybe, or they can work from home, and they end up just bouncing from job to job every couple of years or every six months, thinking that the next job is going to be better, where probably they’re really just… That desire, that passion isn’t filled, and it’s probably not going to be filled until they find that thing they really desire and make it their own business or become an entrepreneur based off of that, that they’ll never actually be happy. And I think that kind of rolls into your point as to just stay with one job and suck it dry for as much as you can, and then go and live out your dream, whether that’s a real estate investor or whatever business.
But one thing to think about too is not only the type of person you are as an employee and what you enjoy, but which real estate strategy are you going to pick too? Like if you really hate your sales job of sitting on the phones all day calling people, maybe you don’t want to be a wholesaler then. So think about those things too, as you’re thinking about what real estate strategy is going to get you out of your W-2. Make sure you’re not making a job for yourself.
And that’s all what Robert Kiyosaki talks about. And he was just on the BiggerPockets OG Real Estate Podcast, if you guys want to go back and listen to that, but it’s, don’t create a job for yourself. You see a lot of independent contractors, I guess, where they create a job for them. Like the one I always think of is a chiropractor. So yeah, they start their own business. Yay. But they’re only making money if they’re working. That’s a job. They have to go there every day. They have to show up. So different things like that. Where if you’re building a business or you are an investor, you have people who are doing those tasks for you, and it can run without you. And that’s kind of the ultimate goal for me, at least, where I get to decide what I want to be involved in. And then there’s other people to pick up the slack when I decide last minute, “Hey, I’m not going to be available for a month. Take this off my plate.”

Tony:
I think the only other thing I’d add, Ashley, is, and I’m talking directly to the listeners right now is that there’s probably a lot of you who have a day job that you are not super passionate about. So my first challenge to you was, can you connect the financial incentives or financial benefits of your job to your ultimate goal of becoming a real estate investor? But my second challenge to you that are listening would be, can you find a piece of your job that you’re passionate about? Maybe it’s not the entire thing, right? Maybe there’s a lot of your day where you’re like, “Oh man, I just, I really don’t enjoy this piece.” But is there one piece of that job that you can really sink your teeth into?
And I can share my personal experience. Right? When I worked my W-2 jobs, I worked in warehousing and distribution. Right? I ran a bunch of big distribution centers across North America. Do I personally have a deep passion about moving boxes in and moving boxes out of distribution centers? No, but the part of the job that I found out that I really enjoyed was the people side, right? I had a big team of people and I saw people grow and mature and develop, and turn into leaders under my leadership. And I got a lot of joy out of that part of my job. So for those of you that are in that similar position, where maybe you don’t like moving the boxes in and out, can you find a different part of the job does touch your passions, that does peak your interest, that kind of keeps you engaged and motivated long enough to work that job to help you get to your ultimate goal of becoming a real estate investor?

Ashley:
Yeah. That’s such a great point. And think about like, just say that was your kind of, even your motivation as to, like to keep doing it, because you’d see these people succeed and move up in your company and change, and that would give you motivation to keep doing it and keep you inspired. So kind of looking for those things in it too, as to, is there something in that job that almost challenges you? So for example, in Tony’s situation, if he has an employee, watching him grow and say, “Okay, let me see if I can help this employee do it and move on up?” So, yeah. That’s awesome. Hey, well, I’m spent. Do you know what that’s from, what movie?

Tony:
Is it Tommy Boy? No?

Ashley:
No, Austin Powers. Yeah. I’m spent.

Tony:
I tried to watch Austin Powers with my son a couple of weeks ago, and three minutes in I was like, “Okay, this is not the right movie to watch with him, at least not yet.” So I had to turn it off.

Ashley:
Yeah, no, no, no. Oh, that’s funny. So have you ever seen it, though?

Tony:
Yeah, yeah. I’ve seen all the Austin Powers.

Ashley:
Oh, okay, okay.

Tony:
It’s been a while. It’s been a while.

Ashley:
Yeah. Now that you know Tommy Boy front and back, I got to find new movies to quote to keep you on your toes.

Tony:
Yeah.

Ashley:
Please send movie suggestions for me to train Tony on, @wealthfromrentals on Instagram. Thank you guys so much for joining us for the rookie reply ramble with Tony and Ashley. And we will be back on Wednesday with a guest and get to hear their story about real estate investing. Thank you guys so much for joining us. I’m Ashley @wealthfromrentals and he’s Tony @tonyjrobinson on Instagram. And we’ll see you guys next time.

 

 

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