Starting out, spouse with high income/safety net

Member since 2019 · 8 posts · 6 votes

So I have a job I don’t love. Want all of the things that real estate investing would offer in my life and most importantly want to be my own boss. I know I might work harder but at the end of the day it will be on my own terms and will go towards building a better future for my family.

We are already a fortunately high net worth family. however, that is from my spouses W2 income, so at this stage we don’t really have anything tangible to “leave behind” and we want to try to build generational wealth for our child.

Where would you start in this case? Obviously things like house hacking aren't even an option because we have a nice SFH with a family. We have enough in our account and enough of an equity in our home where we could really start with any type of investment so that's where it's difficult to choose where to go.

I think we just need to get that first investment done to get our feet wet and really get the ball rolling but wondering that with the fortunate situation I’m in with a great safety net already, is there a “best” way to start?

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Chris SeveneyBusiness Member

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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

Quote from @Nikesh Patel:

First place to start is to get your spouse on board. If they are not on board then that is a showstopper. I left my W2 several years ago to go into real estate full time. here is what I did:

1. I was doing real estate while I was working my W2 job. Why? Because being an entrepreneur is not what it is all cut out to be, it is a lot of stress and different headaches from the W2.

2. I had spoken to my wife and come up with the "magic number" - which was how much money do we need set aside to make this work.

3. I continuously updated her on where we stood and when I thought I would get to that number.

4. Once I got to that number I made the leap. I had already had the entity etc. setup from my prior deals etc., but things like changing it to S corp to collect a salary etc. are the small things that need to be brought up.

Now figuring out what aspect of real estate do you want to invest in, that depends on you, but also recognize starting in real estate right now is like trying to sell snow blowers in florida. It is going to be very hard for someone starting out to make money and it will take an incredible amount of time or effort. For me the TV never went on and I was spending 2-4 hours per night working on the side hustle. Did it payoff? I think so.

Hope this helps

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y
Quote from @Nikesh Patel:

So I have a job I don’t love. Want all of the things that real estate investing would offer in my life and most importantly want to be my own boss. I know I might work harder but at the end of the day it will be on my own terms and will go towards building a better future for my family.
We are already a fortunately high net worth family. however, that is from my spouses W2 income, so at this stage we don’t really have anything tangible to “leave behind” and we want to try to build generational wealth for our child.

Where would you start in this case? Obviously things like house hacking aren't even an option because we have a nice SFH with a family. We have enough in our account and enough of an equity in our home where we could really start with any type of investment so that's where it's difficult to choose where to go.
I think we just need to get that first investment done to get our feet wet and really get the ball rolling but wondering that with the fortunate situation I’m in with a great safety net already, is there a “best” way to start?

First place to start is to get your spouse on board. If they are not on board then that is a showstopper. I left my W2 several years ago to go into real estate full time. here is what I did:
1. I was doing real estate while I was working my W2 job. Why? Because being an entrepreneur is not what it is all cut out to be, it is a lot of stress and different headaches from the W2.
2. I had spoken to my wife and come up with the "magic number" - which was how much money do we need set aside to make this work.
3. I continuously updated her on where we stood and when I thought I would get to that number.
4. Once I got to that number I made the leap. I had already had the entity etc. setup from my prior deals etc., but things like changing it to S corp to collect a salary etc. are the small things that need to be brought up.
Now figuring out what aspect of real estate do you want to invest in, that depends on you, but also recognize starting in real estate right now is like trying to sell snow blowers in florida. It is going to be very hard for someone starting out to make money and it will take an incredible amount of time or effort. For me the TV never went on and I was spending 2-4 hours per night working on the side hustle. Did it payoff? I think so.
Hope this helps
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Samuel DioufBusiness Member
Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
2y
I would just dive in. Figure out the goal your trying to achieve, pick a market, and start buying deals. You will become more and more confident through experience.
There are some great appreciation focused opportunities in Columbus, Ohio!
[email protected]614-662-1652
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Nikesh Patel
OP
Member since 2019 · 8 posts · 6 votes
2y
Quote from @Samuel Diouf:

I would just dive in. Figure out the goal your trying to achieve, pick a market, and start buying deals. You will become more and more confident through experience.
There are some great appreciation focused opportunities in Columbus, Ohio!
Hi! I’d love to connect with you further on these deals!
0 Reply
Nikesh Patel
OP
Member since 2019 · 8 posts · 6 votes
2y
Quote from @Chris Seveney:

Quote from @Nikesh Patel:

So I have a job I don’t love. Want all of the things that real estate investing would offer in my life and most importantly want to be my own boss. I know I might work harder but at the end of the day it will be on my own terms and will go towards building a better future for my family.
We are already a fortunately high net worth family. however, that is from my spouses W2 income, so at this stage we don’t really have anything tangible to “leave behind” and we want to try to build generational wealth for our child.

Where would you start in this case? Obviously things like house hacking aren't even an option because we have a nice SFH with a family. We have enough in our account and enough of an equity in our home where we could really start with any type of investment so that's where it's difficult to choose where to go.
I think we just need to get that first investment done to get our feet wet and really get the ball rolling but wondering that with the fortunate situation I’m in with a great safety net already, is there a “best” way to start?

First place to start is to get your spouse on board. If they are not on board then that is a showstopper. I left my W2 several years ago to go into real estate full time. here is what I did:
1. I was doing real estate while I was working my W2 job. Why? Because being an entrepreneur is not what it is all cut out to be, it is a lot of stress and different headaches from the W2.
2. I had spoken to my wife and come up with the "magic number" - which was how much money do we need set aside to make this work.
3. I continuously updated her on where we stood and when I thought I would get to that number.
4. Once I got to that number I made the leap. I had already had the entity etc. setup from my prior deals etc., but things like changing it to S corp to collect a salary etc. are the small things that need to be brought up.
Now figuring out what aspect of real estate do you want to invest in, that depends on you, but also recognize starting in real estate right now is like trying to sell snow blowers in florida. It is going to be very hard for someone starting out to make money and it will take an incredible amount of time or effort. For me the TV never went on and I was spending 2-4 hours per night working on the side hustle. Did it payoff? I think so.
Hope this helps

Thank you! Yes spouse is absolutely on board, actually encouraging it as if I can get the REPS I am after, we’d actually save money even despite me quitting my job.
I’m hoping that the opportunities that come from having a higher chunk in savings already ready to deploy might make it slightly less difficult to get started vs needing to start from nothing (I may be wrong here).
0 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
2y
@Nikesh Patel
welcome. please recognize that it is very, very difficult to achieve cash flow at this time UNLESS you employ a hands-on, time intensive, creative strategy, OR a combination of such strategies. if you buy vanilla long term rentals and hold them for 50 years, you will do great. but those first few years are going to be a time of INVESTMENT - not a time of 'cash flow.'
https://www.biggerpockets.com/forums/12/topics/1171104-the-m...
2 Reply
Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
2y
Quote from @Nikesh Patel:

So I have a job I don’t love. Want all of the things that real estate investing would offer in my life and most importantly want to be my own boss. I know I might work harder but at the end of the day it will be on my own terms and will go towards building a better future for my family.
We are already a fortunately high net worth family. however, that is from my spouses W2 income, so at this stage we don’t really have anything tangible to “leave behind” and we want to try to build generational wealth for our child.

Where would you start in this case? Obviously things like house hacking aren't even an option because we have a nice SFH with a family. We have enough in our account and enough of an equity in our home where we could really start with any type of investment so that's where it's difficult to choose where to go.
I think we just need to get that first investment done to get our feet wet and really get the ball rolling but wondering that with the fortunate situation I’m in with a great safety net already, is there a “best” way to start?

You should buy an investment property in North Carolina and manage it as an Airbnb
[email protected]614-541-8475 Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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Jena Vail
Member since 2024 · 21 posts · 16 votes
2y
You are in a fantastic position! You have a steady income from w2 and cash. There is always a deal somewhere and if you have professionals helping you (mortgage broker, realtor, cpa, etc) lean on their knowledge. You might consider first starting with a good mortgage broker to see where you stand and what you qualify for. That will probably steer you in a direction 🙂

1 Reply
Nikesh Patel
OP
Member since 2019 · 8 posts · 6 votes
2y
Quote from @Nicholas L.:

@Nikesh Patel
welcome. please recognize that it is very, very difficult to achieve cash flow at this time UNLESS you employ a hands-on, time intensive, creative strategy, OR a combination of such strategies. if you buy vanilla long term rentals and hold them for 50 years, you will do great. but those first few years are going to be a time of INVESTMENT - not a time of 'cash flow.'
https://www.biggerpockets.com/forums/12/topics/1171104-the-m...
Thank you for the advice. Yes cash flow is not what I am after. I think the tax benefits combined with building equity is the goal, cash flow is not a major issue thankfully with our household w2 income. Safe long term rentals is the goal
0 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
2y
Most real estate is long term, not short term replacement of income. Flips might be the exception, but they are much higher risk.
I'd start while you are still working. Long term rentals don't require full time work. Decide what you want to do and they type of homes and locations of where you want to invest and then start running the numbers.
1 Reply
Erick Hunt
Contractor · Charlotte, NC · Member since 2012 · 30 posts · 12 votes
2y
Quote from @Nikesh Patel:

So I have a job I don’t love. Want all of the things that real estate investing would offer in my life and most importantly want to be my own boss. I know I might work harder but at the end of the day it will be on my own terms and will go towards building a better future for my family.
We are already a fortunately high net worth family. however, that is from my spouses W2 income, so at this stage we don’t really have anything tangible to “leave behind” and we want to try to build generational wealth for our child.

Where would you start in this case? Obviously things like house hacking aren't even an option because we have a nice SFH with a family. We have enough in our account and enough of an equity in our home where we could really start with any type of investment so that's where it's difficult to choose where to go.
I think we just need to get that first investment done to get our feet wet and really get the ball rolling but wondering that with the fortunate situation I’m in with a great safety net already, is there a “best” way to start?

@Nikesh Patel if I may add my 2 cents....as with any strategy in Real Estate it all comes with pros and cons. I say you should weigh those options for yourself based on research. As was mentioned earlier, it is extremely difficult to find cash flow, especially in our market (charlotte metro). Of course the less leverage you use, that cash flow increases, then your liquidity is much lower as well. For me, my strategy has always been a mix of flips and rentals but more flips (80/20). Mainly because rentals for me are "long term slow money" and I use the chunks of cash from flips to buy and/or pay down the rental balances (increased cash flow, lower debt, etc). I also try my best to buy rentals with some form of creative financing but again, its a slower play and depends on the market at that time. Let me preface what I am about to say next by saying I am a fix and flipper by heart. That's how I started. Id suggest doing a fix and flip first then buy a rental. I say that because it is something you can get in and out of (if done correctly) within 6 months. You'll get a "win" under your belt. Made a profit, use that profit on a rental. Your then situation is more capital than you started with. Rinse and repeat.
2 Reply
Raj Manickam
charlotte, NC · Member since 2024 · 1 post · 2 votes
2y
Quote from @Account Closed:

Quote from @Nikesh Patel:

So I have a job I don’t love. Want all of the things that real estate investing would offer in my life and most importantly want to be my own boss. I know I might work harder but at the end of the day it will be on my own terms and will go towards building a better future for my family.
We are already a fortunately high net worth family. however, that is from my spouses W2 income, so at this stage we don’t really have anything tangible to “leave behind” and we want to try to build generational wealth for our child.

Where would you start in this case? Obviously things like house hacking aren't even an option because we have a nice SFH with a family. We have enough in our account and enough of an equity in our home where we could really start with any type of investment so that's where it's difficult to choose where to go.
I think we just need to get that first investment done to get our feet wet and really get the ball rolling but wondering that with the fortunate situation I’m in with a great safety net already, is there a “best” way to start?

"Best way" is in the eye of the beholder.

I chose the creative finance path because I started out as a loan officer bailing out pre-foreclosures, which you could do back in the day.

Because I understood what banks could and couldn't do & what banks would and wouldn't do, regarding pre-foreclosures, I was a step ahead and able to do some pretty amazing things. I made a lot of money because of "specialized knowledge".

Like @Chris Seveney we threw out our TV 45 years ago and never looked back. Did it make a difference, yep. Those hours went into learning the business. My wife quit her W2 and raised our family and helped me. Best things we ever did.

@Account Closed Can you please explain what is creative finance path? How does it work? Is it different from seller finance? Thank you
2 Reply
Peter W.
Member since 2020 · 351 posts · 329 votes
2y
What I did was buy a single family home in the worst neighborhood you would feel comfortable moving your wife and kids to within 15 minutes of your home. Make sure it needs some very light work. And then do everything yourself: maintenance, advertising, showing, developing your lease etc. Get it rented and figure out what went right and what went wrong.
Based on that first experience figure out what strategies you want to employ in the future to increase your returns/decrease your work load. This is likely based on your skill set. As Ken said some people are built for creative financing, some are built for rehabs and some are built for buying turnkey properties and handing it off to a property manager. Also figure out whether the work involved is worth the expected returns.
I found that getting over to do work on a house I didn’t live in to be far more challenging than anticipated (so I won’t be attempting any flips in the near future). And that rather than trying to purchase one property a year I am probably better off investing one every 2-3 years and keeping a higher percentage of my net worth in the stock market.
0 Reply
Taz Zettergren
Real Estate Agent · Memphis, TN · Member since 2019 · 365 posts · 264 votes
2y
@Nikesh Patel welcome to the forums. What a great position to be in with that safety net of your spouse. If it's feasible I always recommend to start investing locally and sourcing the deals, contractors and if interested manage yourself. In order to find deals it starts with the network so local REA meet ups, wholesalers and investor friendly agents. Ideally buying properties with cash, or hard money if the price point is higher than what you have available. At that point you could either flip or hold the units as rentals depending on your goals.
Not everyone can do this full time because they don't have the time nor want to spend the effort doing all the work. If you're wanting to do it full time it would be a great option or if you wanted to do it passively there are several turnkey providers in the southern/middle part of the country where the price points are easier and the laws are more landlord friendly.
The options area limitless you can spin this anyway you'd like but again if feasible I'd always advise doing a deal locally to you before quitting your job because it is a lot of work at the end of the day that will take a lot of resolve so it might not want to be something you do yourself. Best of luck on the journey!
1 Reply
Freddy AlbanBusiness Member
Real Estate Broker · Charlotte, NC · Member since 2020 · 74 posts · 33 votes
2y
Hey Nikesh,

I’m really excited to hear you're thinking about stepping into real estate. It’s a journey full of learning curves, but that’s part of the fun. If you’re pondering where to start, consider what excites you most about real estate. Is it the thrill of developing new properties or perhaps the process of flipping and revitalizing an olderHey Nikesh,

I’m really excited to hear you're thinking about stepping into real estate. It’s a journey full of learning curves, but that’s part of the fun. If you’re pondering where to start, consider what excites you most about real estate. Is it the thrill of developing new properties or perhaps the process of flipping and revitalizing an older one?

I’ve seen many folks with the same eagerness and questions about their first steps. A simple yet effective approach is to aim for one property at a time. Even a modest first investment can be a solid foundation for future endeavors. And with Charlotte’s current market trends, you’re in a promising spot.

Networking can make a big difference, too. Charlotte is bustling with real estate events where you can connect with individuals who’ve been in your shoes. It’s a fantastic way to gain insights and meet a variety of people involved in all aspects of real estate.

Feel free to reach out if you ever want to talk or have any questions. Real estate is as much about the journey and the people you meet along the way as it is about the investments. I’m looking forward to seeing where your interest takes you! one?

I’ve seen many folks with the same eagerness and questions about their first steps. A simple yet effective approach is to aim for one property at a time. Even a modest first investment can be a solid foundation for future endeavors. And with Charlotte’s current market trends, you’re in a promising spot.

Networking can make a big difference, too. Charlotte is bustling with real estate events where you can connect with individuals who’ve been in your shoes. It’s a fantastic way to gain insights and meet a variety of people involved in all aspects of real estate.

Feel free to reach out if you ever want to talk or have any questions. Real estate is as much about the journey and the people you meet along the way as it is about the investments. I’m looking forward to seeing where your interest takes you!
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Justin Roland
Lender · Charlotte, NC · Member since 2018 · 25 posts · 22 votes
2y
@Nikesh Patel
Cash flowing on a long term rental is very hard to do in this rate environment unless you find an absolute deal. I think you should look into a short term rental in the NC mountains or NC or SC beaches. I have 2 STRs in Hilton Head and they are great from a cash flow perspective and appreciation
We manage them ourselves and it only requires about an hour a week total. If you want more info or want to chat feel free to reach out

1 Reply
Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes
2y
@Nikesh Patel I quit my W-2 to go full time in real estate the first of this year. I stayed on at work part time through the 1st of April and now am on a per diem basis in a different role with the company. This has allowed me to keep moving my retirement account towards full vesting age as I’m not quite there yet.
However, despite having some liquidity and an abundance of ambition I am finding it extremely difficult to find any new deals worth pursuing. I’m currently following new leads towards other real estate opportunities aside from my usual multi family buy and hold position because the last few buildings I’ve seen have been terribly price inflated and so disgusting they should have been condemned.
If I were you I would sit down with a notebook and outline 1, 3, 5, and 10 year real estate goals and get very specific about what type of property you want to pursue and how many deals you want each year etc etc. Dream big. Then reverse engineer.
It’s all good and well to advise you to do a fix and flip but if you’re not handy yourself or haven’t started building your team yet then you have some basic planning to do first.
I’m not suggesting you get caught in analysis paralysis but studies have shown repeatedly that those that set goals see an exponentially higher level of success than those that don’t. I believe this also applies to then continuing on and creating a solid plan of how to get there. Yes this plan can change but most people don’t try to build a building without a blueprint so why try to build your real estate legacy without one?
0 Reply
Leonardo Chandler
Member since 2024 · 17 posts · 7 votes
2y
In your case, with wealth and a stable home, there are several avenues you can consider to start investing:

Property Investment: You already have an SFH, which can be a great starting point for property investment. Consider purchasing additional investment properties such as rental homes, commercial properties, or even shares in real estate through investment trusts.

Consider investing in stocks, bonds, or mutual funds through a broker or online investing platform. This can be a good way to diversify your portfolio and benefit from the market.
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