Should I Quit My Job or Stay?

56 Replies

I've been considering quitting my job a lot lately, should I? I recently purchased my first 3-flat where I should be able to successfully house-hack. Mortgage is 2k and rental income should be about $2600 a month. I make 60k a year at my job and I know staying at my job will enable me to receive financing from banks easier. I used conventional for the first property so if I stick around for another year I can utilize the low-down payment FHA loan and be up two properties. I'm comfortable with in the financial situation that my job provides but, as the saying goes "opportunity is on the other side of fear".

I'm a Procurement Associate and I sit at a cubicle all day creating solicitations. I have my real estate license and I would love to go full-time in real estate as an agent and an investor. I have not done a deal yet as an agent besides my own deal but, I accredit that to not having enough time due to my 8am-5pm job schedule. The idea of waking up every morning and not chasing my dream is wearing me down mentally. I do not want to live average making 60k a year I want 60 million a year. I have money saved up to cover my expenses for about a year. In the book Set For Life, Scott speaks of how you should save up enough money so that you can make an attempt at a career/business with no salary limitations that you'll enjoy doing. I'm 25 years old and I understand that time is of the essence and if I'm going to tackle this journey then i need to begin now! My greatest reason for not leaving my job is that it'll be difficult for me to get financed without W-2 income.

So should I play it safe and stay at my job or step out on the limb and go full-time in real estate?

@Quamal Burton you have one property that makes $600 per month. You are not exactly killing it. Once your assets are making you $60K per year, then if you quit your job you would be exactly where you are now financially. Do you want to be middle class your whole life or wealthy? Wealthy people work long hours for years before they retire.

@Quamal Burton - This is my personal opinion, and I am sure there will be a wide range of opinions so take it for what it is, an opinion from a random person on the internet.

1) Early on in your investing career, it is way easier to get financing when you have a w2 job. If you want to build your portfolio this helps.

2) The average agent makes less than you do now at your w2 job. It is a very competitive business, and where we are in the cycle, there are tons of agents. Everyone knows a licensed agent. If you want to go for it, know your first year or two will be really hard work. But if you succeed there is a lot of upside.

3) Many folks feel we are closer to the top of the market than the bottom. For me, this is a time to be building a war chest, de-leverage and get ready for a down turn. 

4) If you don't enjoy your w2 job, while we are in a hotter economy, now could be a good time to changes jobs for higher pay. Also the new job, being simply that it is new could provide some excitement for you that can break up the rut and extend your w2 working for another year or two. This gives you time to add a few more properties.  

@Quamal personally I would stay. If you don’t like your job, then I’d recommend finding a new one, that hopefully pays you more. Find a job you enjoy, continue saving and set a timeline to go full time.

This is what I’m doing personally. I’m similar age to you (couple years younger) and have already bought a couple rentals. I’m giving myself 12 years tops to make this enough to go full time. It may take less time

@Anthony Dooley Thanks for the advice. Of course I do not want to be middle class my entire life, which is why I considered quitting my job for entrepreneurship (although I know it will not be easy). I do not want to be the employee who life passes him by because he worked a job he did not like for so many years and now at the age of 60 he is finally able to enjoy his fruits of labor.

@Andrew Kerr This was great advice. I never gave getting another job a thought. I just told myself that after this job I'd never work for anybody else again and become my own boss. I understand that becoming a successful agent will not be easy but, I "believe" I'd be willing to work at it being that I'm so passionate about real estate and enjoy it so much. I'm being an optimist opposed to a pessimist or, even a realist. Can you elaborate on what you mean when you say "building a war chest and de-leverage"?

@Caleb Heimsoth Thanks for the advice. I will definitely take this into consideration.

@Quamal Burton I'm not suggesting that you work a job that you hate until you are 60. What I'm saying is that you are 25 and you haven't been working very many years so far. You are not financially ready to quit your current job based on what I can tell. Find another job that you like better while you build a bigger portfolio of property.  If you want to get there faster, then working less is not the way to go. Work 2 or 3 jobs for a few years and save up some money to invest. 

@Quamal Burton - What I mean is getting ready for a potential decline in value. So after the next recession, when prices are lower I will be ready to buy. I want as much cash available to buy property at a discount. An example is, we are cutting back on extras in our personal life. We have a big multi week trip to Europe in the spring, but instead of using cash, I did some credit card churning and used existing points to pay for the flights and all the hotels. I put off buying a new car as to keep from having payments or using cash. I am trying to build cash as rapidly as I can, a war chest.

Then the de-leverage part is, I don't want to be over extended on credit. It is a good time to take profits if you can. Cut any losers in your portfolio, sell those challenging properties. A couple examples, I have three almost identical properties that have performed well in a college housing market, the price run up on them has been huge. I am selling two and using the proceeds to pay the cap gains and pay off the mortgage on the third. My cash flow is going to be almost the same on the one property once it is free and clear vs the three that were leveraged. I just finished a house hack/BRRRR combo for a new primary residence. My LTV is going to be about 65-70%. Since it is a primary residence, I could have easily gone up to 90%, I felt more comfortable with less debt servicing. Also, two years ago I would have felt comfortable running multiple projects or doing a project that could take 9-12 months, now I don't, I want to focus on projects where I have high value add and can be done quickly.

Keep in mind, this is all my opinion and personal preference. The market could go strong for several more years, and I hope it does. But, I also have made a ton of money from 2011 to 2017, so I am ok if I miss out a little bit on another year or two of increases.

I just had to make the same decision. It was the best decision of my life.

But you MUST have that reserve and I would suggest you getting a part time job like uber while you make the transition. Before you quit you might want to take 6 months or so to make as many contacts in the industry as possible. Join your local REIA. Hell if it doesn't go well you are young enough to recover.

Good Luck!

@Anthony Dooley Totally understand. I have a substantial amount of money saved up, which is what frustrates me even more that I feel stuck in the 9-5 grind.

@Andrew Kerr Got it! you have provided me great advice! In your 6 year run from 2011-2017 have you made most of your money from flips or buy and holds or a mix of both?

@Quamal Burton stop crying and get to work. There is no shortcut to wealth. The fastest way to get rich quick, is to get rich slow. A lot of people made good money for a while, and then the market changed. Guess what? The market will change.

I don't get what leaving is going to help you accomplish? If you're dream is to become a successful investor, then do it outside of your working hours. If it's to be a investor friendly agent.... then again you could do that outside of working hours..

It's a lot cooler to say oh I left my job to purse my dream of blah blah.... I get that. But it's far more realistic you're going to make it to your dream when you build it while you have the stability of your current job. I found I ran out of money far faster than I ran out of deals, I couldn't imagine what it'd be like with trying to establish a new career. 

Looking for a new job (same career field) might be a good option, but if your job now affords you time in front of a computer and isn't crazy... you could use that to browse MLS....

For the record, I tell you this as someone who found the time to invest while working full time and being a full time grad student (even learned and executed a 1031 AND invested out of state), then school got done and now I have a kid to raise... challenging yes, impossible hardly. If I can do it, so can you (if you want it badly enough).

@Matt K. Cool story. I’m already invested out of state and work full time and I’m about to add grad school to that as well.

Glad to know it can all be done

Originally posted by @Caleb Heimsoth :

Matt K. Cool story. I’m already invested out of state and work full time and I’m about to add grad school to that as well.

Glad to know it can all be done

 All I can say is grind it out, one deadline at a time and it'll be done before you know it. Also, you're likely to gain a lot of respect from peers/classmates and coworkers by doing school full time while working.... keep that in the back of your mind when you're up at 2am finishing a paper and have work in a few hours.

@Quamal Burton ,

To determine what's the best choice, you need to look at the big picture,  and where you want to go, and which one will most likely get you there with the lowest risk and highest likelihood of success.  

If you quit your job now, and do real estate full time, you're making $600/mo + savings/yr+ real estate commission, and I doubt any bank will offer to lend to you, as it's a lot uncertainty.  

 Why not study and get your real estate license now, on the side and on weekends, test the waters first before jumping in!     If I were you, and you're flexible, I'd stay at my job for at least another  2 years, buy another triplex, stay a year, and then buy another one.    You have so much leverage if it's owner occupied and you have stable income.   After that, why not find a job you're passionate about that's still a W2, maybe less money but more enjoyment?   I'd do that, until the rental income is close to your current job, and then take a leap of faith!   

Patience and sacrifice is the name of the game IMO.

Most indivules wishing to quit a good paying job and go into real estate full time fail miserably. 

The only porpoise of a job is to earn money to do the things you enjoy. Enjoying a job is very rare and highly overrated, making money should be the only purpose of a job.

In your case once your positive cash flow from your investments matches your job income you can think of quitting and giving up 50% of your income. Until then value what you have as tool to achieve a goal, nothing more/nothing less.

My opinion is much the same as the others. Keep your w2 job for at least 2 more years and get more income passively before you quit.  I made a 12 year plan for my family.  That being said my wife and I will work til 2027 but are slated to have 35 properties minimum as passive.  As well as us both working I do rehabs and handy man work for many other investors around so I can dump more Capitol into our portfolio.  We will be buying 3 properties every year for our portfolio and will have the first one paid off in 3 more years.  I am also in process of getting my real estate lisence to save money on purchases but also as another stream of income.  It will also allow us to transition out of the rat race easier and always have something to fall back on for income if needed.  Everyone has put forth many good ideas and opinions for a yes or no answer. If it were me I would find my freedom number and go from there in an answer that fits you.

Originally posted by @Quamal Burton :

I've been considering quitting my job a lot lately, should I? I recently purchased my first 3-flat where I should be able to successfully house-hack. Mortgage is 2k and rental income should be about $2600 a month. I make 60k a year at my job and I know staying at my job will enable me to receive financing from banks easier. I used conventional for the first property so if I stick around for another year I can utilize the low-down payment FHA loan and be up two properties. I'm comfortable with in the financial situation that my job provides but, as the saying goes "opportunity is on the other side of fear".

I'm a Procurement Associate and I sit at a cubicle all day creating solicitations. I have my real estate license and I would love to go full-time in real estate as an agent and an investor. I have not done a deal yet as an agent besides my own deal but, I accredit that to not having enough time due to my 8am-5pm job schedule. The idea of waking up every morning and not chasing my dream is wearing me down mentally. I do not want to live average making 60k a year I want 60 million a year. I have money saved up to cover my expenses for about a year. In the book Set For Life, Scott speaks of how you should save up enough money so that you can make an attempt at a career/business with no salary limitations that you'll enjoy doing. I'm 25 years old and I understand that time is of the essence and if I'm going to tackle this journey then i need to begin now! My greatest reason for not leaving my job is that it'll be difficult for me to get financed without W-2 income.

So should I play it safe and stay at my job or step out on the limb and go full-time in real estate?

Quit. 

Focus on making 60k a year from your properties. Who knows how long that may take, really depends on how your investing but once its done then quit and invest those full time hours into your own business!

@Quamal Burton I have not read the book Set For Life, but if the message is to save up one years expenses and quit your job on $600 cash flow, then the book is giving dangerous advice. 

There is no reason you can't build up your realtor business as a side hustle. You have not closed a single deal, so obviously you are not trying very hard. Saying that your 9-5 is holding you back is an excuse. Realtors work nights and weekends and you should be too. 

You say that you have a years worth of expenses saved and refer to that as "substantial" amount of money. Sorry but one years worth of living expenses is hardly substantial. 

You refer to living off $600 cash flow. Wait until the furnace goes bad and the $4000 eats up six months worth of profit. You need to get a track record running your property before you start spending the meager profit.

Keep the job for 3 more years. Save 75% of your income for down payments. Buy two more properties. Build up your realtor business as a side hustle. At the end of three years, you should be able to transition to be a realtor. That is my advice, but every man must choose their own path.

@Quamal Burton

Quamal - I left my investment banking job at 27 and at 28 have built a business by which I am financially independent.

It's time to have an honest conversation with yourself in the mirror and ask:

1) Do I have the hustle it takes to wake up at 6 AM, work until 10 PM, and not expect a paycheck?

2) Can I realistically support myself for a year without income and two years with minimal income?

A few side thoughts:

1) You have zero downside leaving stability at 25 to chase a dream - worst case, you fall flat on your face and end up back in a 9-5.

2) I've never met anyone who told me they regretted leaving a 9-5 in their 20s.

3) Nobody takes you seriously unless you're doing it full time -- I've never met a successful realtor who only works weekends.

4) 99.9% of entrepreneurs don't get rich. If you're in it for the money, stay at your job.

@Quamal Burton   I think my answer would change given more details but I think it would a great idea to quit your job now as you have plenty of time to go back to another job that gives you more fulfillment if you fail, so what do you have to lose?  The more you get paid the harder I personally feel it is to walk away from your job, which can somewhat be a trap of its own.  If you decide to pursue a career as a real estate agent I would also set aside a budget for your marketing to get clients as marketing is going to be the lifeblood of your business to get clients starting out.  Also when you say you have money saved up to cover your expenses have you actually spreadsheeted out how much you actually spend in an average month or is this just based off an estimate or a calculation.  I think a lot of people are surprised how much faster their funds actually go when they quit their job because they forget about the expenses that may not be monthly or the little pleasures you have to spend money on here and there.  I'm not trying to knock Scott's book as I think it's a good book that provides a positive mindset but I have read a lot better books that have provide a lot more mindset on the how to and I generally would want to take advice from somebody that is much closer to that 60 million a year than versus maybe 3-5k a year.  From my personal experience it will only get harder to quit your job as healthcare gets more expensive, you have other mouths to feed, your parents need your help as they age and so forth so now is as good as a time of many.  At a worst case scenario I would suggest a change in careers if you do not like your job and/or start real estate as a part time agent.  It is definitely possible to succeed as a part time agent.  I had three young kids all not even in preschool when I started so I just had to do it whenever I could, but the great thing about it is most people want to see homes after work or on weekends so you can work around your schedule.

I greatly appreciate all of you guys advice! The diversity of these answers are a gift and a curse. Gift because I see it from so manu perspectives and a curse because I'm still indecisive about whay to do. Also, a more in depth analysis of my situation may be necessary for you guys to accurately assess my situation. I have over 6 figures saved up and not only do I already have my real estate license but, I also havea CDL drivers license, so if things fall completely apart in real estate I do have other avenues open. I by no means disagree with staying at my job and slowly chipping away at financial independence and having the ability to constantly get bank financing but, the idea of waking up at 6am and spending nine hours plus a day at a place I do no wish to be is scary.

Originally posted by @Quamal Burton :

I greatly appreciate all of you guys advice! The diversity of these answers are a gift and a curse. Gift because I see it from so manu perspectives and a curse because I'm still indecisive about whay to do. Also, a more in depth analysis of my situation may be necessary for you guys to accurately assess my situation. I have over 6 figures saved up and not only do I already have my real estate license but, I also havea CDL drivers license, so if things fall completely apart in real estate I do have other avenues open. I by no means disagree with staying at my job and slowly chipping away at financial independence and having the ability to constantly get bank financing but, the idea of waking up at 6am and spending nine hours plus a day at a place I do no wish to be is scary.

 So why not build up the pipeline to replace the current job, what's the point of building it w/ no income coming in? Then when you start missing out on deals because of the job.... quit, but right now it doesn't seem like that's the case. 

@Quamal Burton think about your finances in terms of generating enough revenue to cover all of your expenses. If you don't have many liabilities/expenses and you can get by while you grow your real estate business then you might consider leaving your w-2 job. Be sure to think through how you will finance your next deal if you don't have a w-2 job to qualify for a loan. Once you figure those items out then you should be able to focus 100% on real estate and build your business exponentially. I wish you great success and happiness. 

I think that it's all about reducing your risk. The fact of the matter is that it sounds like Quamal is unable to scale his income at his current job. My advice in Set for Life is not to quit a job with no plan and live off a tiny amount of cash flow while figuring it out and dwindling your reserves. It is to amass a stockpile of liquidity (*Financial Runway*) that creates options. If Quamal makes $60K per year at his job and he quits without a plan in place he may receive no income. That's not very smart, unless he perceives an opportunity that he is willing and able to pursue. Are we smarter than Quamal at gauging what a good opportunity is for Quamal?

Quamal - the question is how do you continue to put yourself in a position where you are increasingly able to take advantage of opportunity? Don't randomly quit your job without a plan. That doesn't seem like a good idea to me. Instead, keep learning, networking, and accumulating assets systematically. Keep your eye open for opportunities and explore them. As you do this, more and more opportunities will present themselves to you on the income front. The fact that you have a year of financial runway has got you thinking about possibilities. That's great. Keep expanding those possibilities until you see an opportunity that you need to grab and makes sense for where you want to go. Understand the downsides and risks of leaving your job and weigh them against the possibilities you perceive in something new. 

I was in a similar position. I was making a little over $50K per year at the end of my first year at a Fortune 500 company. I left the job for a lower level of Base Pay and fewer benefits at a startup company called BiggerPockets. I spent about $2,000 per month, and had about $25,000 saved up. Sure, there was a risk in changing careers and trying something new, but I didn't completely give up my income from wages. I eased in. Instead, I took a job that was part wage, part sales. The fact that I had some savings and was willing to take a bit of a chance helped me propel my career. 

Some people go more aggressively than I and start their own businesses. And they will become wealthy far faster than I will, or they may lose their investment, spend some of their reserves, and have to rebuild. That's fine. There's a tradeoff for risk/reward, and that's up to the individual. The point of Set for Life is that as you accumulate assets and develop passive income, the ability to reduce your base pay and be increasingly rewarded for performance, OR be completely rewarded for performance alone (entrepreneurship or 100% commission work like being an agent) cease to seem as risky and instead seem more like the obviously correct path. Few people with tens of thousands of dollars in annual cash flow and years of runway in liquidity would work a boring job for $60K per year.

That assessment of risk/reward is different for each individual, and it's up to that individual to assess their situation and decide if the risk of stagnating in a dead-end career is larger than the risk of running out of income and having to dip into their investments or reserves sooner than planned. This is a GOOD problem. Quamal - keep giving yourself good problems like the problem of having a lot of ambition, plenty of cash, and more and more passive cash flow, if you can! 

Quamal seems convinced that there is no upside to his current career. And, he has amassed a good amount of savings. Why shouldn't he begin looking for opportunities to scale his income, if he can? Of course, if I was to change careers and wanted to invest in real estate, I'd get on the phone with a lender before making any career moves, and be QUITE clear about what types of income and what job opportunities will mean in terms of your ability to get a loan. The lender might tell you that it would be wise to purchase property before the transition. 

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