This post is purely opinion based although I suppose some may have experience with this. I work for a company that is employee owned and have stock that I can't touch until I leave. If I were to leave at the end of the year this year, after taxes, I would have about 100k to invest.
My question is this - should I get a new job so I can keep a steady income while gaining access to the stock $ for investing or should I take some of that money and live off of it for a year while focusing all my attention on real estate? In my area, that would be the difference of either buying 2 properties at a time or 3 at a time (if I were to keep a day job.)
It is highly likely I will not replace my monthly income in just one year of real estate investment so likely I'll have to go back into the job market. But what's better/worse - taking a job immediately or getting one after a year of very focused intent on growing my portfolio and likely other ways to make and invest active income?
I'm interested in thoughts, opinions, experiences.
I vote for invest while working, unless you have some non-business life passion you want to pursue during said sabbatical. You'll be much more able to qualify for loans if you have W2 income. It would be a bit of a different situation if you had a few properties already, knew the business, had a business plan, and were planning to scale.
Mainly: stop waiting to start in real estate and start now.
Hi @Eric Lunsford , how do you feel with your current occupation whether you've been paid fairly and also if you like the job? Your intention is to get $100K as capital. Try to reflect and imagine if you're leaving, get a new job, how is your feeling. If you're feeling positive about it, then you can try to polish up your resume and goes to interviews to test the market. Who knows you will get lots of job offers and can get more $$ with new company and can get your $100K capital from the old company, then you will get a win-win situation. You can always bail out and say "No" when you're offered after passing interview, so it's a consideration to try. Btw, it is wise to get a replacement of your primary job first. Real Estate Investment is full of surprised and you need enough capital to handle vacancies, repairs, etc. Also the cashflow won't much unless you have accumulated lot of rental income to cover your full time job income. In short, work full time, save any spare income for down payment, buy rental investment, get a Property Manager to manage it, and repeat the process to build your RE Empire.
@Eric Lunsford My opinion is that you will need some type of income to qualify you for your loans. I have had some capital to work with for the past few years as down payments but without my job would not have been able to leverage it to get the mortgages.
My job is truly an ok job for my area and for the level of work required but I only make about $40,000 a year. With no debt I have been able to purchase several small multi families where the rental income based upon the leases has added to my income. I believe this varies from lender to lender if they will allow this right from the start.
Using the same local bank I have been able to continue using the income from the leases from the buildings I’m buying towards new buildings even though it has not yet appeared on my taxes as I have not owned it long enough yet. So far this bank has allowed me to do this with 3 buildings this year.
Small multi family properties will cash flow better than single family houses if you can go that route and it’s not too expensive. Or a duplex. If you enjoy what you’re doing can you borrow against your stock options or find a similar job? Best of luck!
I have a hard money lender that will lend to me without a job/steady income at around 5% for 30 amortized loan. This would be the option I'd go when I refinance cash out. That said, I understand not having the W2 significantly decreases my options in getting loans and being creative with investments. I'm getting to a place where I don't enjoy my job and would like time to spend with my young family and focus on creating more active and passive income. My job takes roughly 50-55 hours away from that a week.