Impossible to invest while working FT?

20 Replies

I wanted to ask if anyone here can share there experience in wanting to invest in real estate, specfically fipping homes or buy and holding, while working full time? I am currently working full-time and am interested in investing in real estate but my time is some what limited. Has any faced this situation? And if so how did you manage your time with work and family?

You will need a passive investment while working FT, ruling out all DIY activities.

Fix-n-Flip requires a lot of management time, so IMO I would look for a Turnkey rental where your personal time can be much less.  With good cash flow, you could then be ready for other TKs over time.  Your end-game is to wash one TK at a time into Flips (if that's your preference).

@Daniel Ramirez I currently have a full time W2 job, married with 2 kids and do my own rehabs.  It is no way easy to do, but it can be done and it is really rewarding both financially and personally.

My kids are 13 and 11 and I do homework with them and help them prep for tests.  This takes planning, but can be done.  Their homework load is not that bad at this point.  

My W2 work runs a minimum of 40 hours per week, but much of my work can be done via email and smart phone.  

The rehab work is done on nights that kids homework/test schedule will allow.  As a matter of fact I will be heading to one of my properties tonight to put in a few hours of work installing kitchen cabinets. I pull my kids in on some weekends to help me with demo or painting.  I think getting kids out from behind screens and making things is important in this age of Youtube and Netflix.  

I do not watch TV, even during dinner... I have no idea what is going with the Walking Dead or Game of Thrones.  

Rehab time on a calendar timeline takes much longer, so holding costs are higher.  However, trying to find good, consistent and honest contractors that are affordable is not easy in the SF Bay Area economy.  So I forecast a budget using licensed contractors and back out potential extended holding costs of doing the work myself and compare overall potential dollars spent and decide if it makes sense to do the work myself.  I buy my materials during my lunch breaks so I am ready for a night or weekends worth of work.

During my drive to the site and back, I drive for dollars looking at neighborhoods around my property.  I don't have tons of cash to buy multiple buildings at one time, so learning neighborhoods is free and it does not take that much more time then driving directly home.

Many people would say I am crazy for doing work that I could pay somebody $15/hour to do.  However, the reality in my market is that if I get a contractor it is much more than $15/hour.  The guy I could pay this low of a rate is either undocumented or some retired guy who does not move very quickly.  In both of these situations you run the risk of workers comp lawsuit or worse.  I would much rather stay safe and pull the permits myself and do the work.  

Am I missing out on anything in life in exchange for this crazy schedule?  I still took my daughter to her Halloween dance last Friday and took my 11 year old son out for a 18 hole round of golf on Sunday.  I had breakfast and dinner with the family every day and I still had time to level a kitchen floor, install wainscot in the kitchen, install 2 lower cabinets in the kitchen and cut back some bushes.

It can totally be done, but you have to plan and stay focused!

Good luck!

-Arlen

@Arlen Chou , love the quote in your signature. I recently bought a couple single families at auction and I'm planning to do a lot of the work myself as well. Nice to read about those out there doing it and making it work.

I work a full time job and just bought my first investment property.  It needs a lot of work, some of which I can do myself such as replacing light fixtures, doorbells, and other small items.  I'm having the roof replaced, and am contracting out painting the entire property.  I also had overgrown trees cut back through a tree service.  I've only had the property for a little over a week and am excited about getting everything ready to rent it.  It absolutely can be done while you work a full time job, even though you may not be able to do it all yourself.  The first thing I did was install a keyless deadbolt.  I can program a temporary pass code for anyone that needs access to work on it while I am not available to come and let them in.

@Daniel Ramirez , you can do it, but it takes dedication.  I currently own around 30 doors.  A dozen of those are managed by a local realtor and are all in an apartment complex.  I manage the rest myself.  I also do at least half of the rehab on new houses I buy to rent.  When you buy a house look carefully at both what you can do yourself and what you cannot do.  You can learn many things on you tube.  See if you have friends who can do or show you how to do parts of your fix up.  Plan what you will do in advance.  Make a list of all the materials (this is hard but you will get better at it) and buy them on your way home from work.  Do work in bite sized chunks.  "Paint the first coat on this room tonight, and strip out old carpet, then paint second coat."  Learn when to say this is good enough, it doesn't have to be perfect.

    You will find you can do it.  If you have a lot more money than time, then explore turnkey purchases, but if you are working on a tight budget then I have found much better prices by buying houses that need some work.  You will learn so much more by doing as much as you can yourself the first time or 2.  Know when to yell uncle and hire some things done you are struggling with.  Try to watch them do it, and ask questions, you will learn a lot.  The same advice will apply to finding renters.  Get a list of questions and qualifications.  Find out how other landlords do it.  Get their application forms and copies of their leases.  You can always hit up folks on BP to ask questions of.  Good luck.

Thank you all for all the feedback. Great to hear that it is doable.  @jbeard I've read little about turnkeys, my understanding of them are "ready to rent" properties and on some occasions there are already tenants in the property. but how profitable can this be?

@arlenchou and Jerry W wow great imaginable plan. I've become a good handy man through the years seeing my relatives work around the house. And not to mention I do most of my car maintenance. So I don't mind getting my hands dirty and using a bit of elbow grease. This stategy sounds like something I would be able to do to save some money on fixing a home.  Thank you gentlemen for your feedback.

@helen and brie thank you for your feedback. 

Go with some buy & holds. To get into a property cheap enough to be able to exit with a healthy profit you will need market exposure and connections that can really only be achieved by someone in the game full time.

It can be done. You need to understand what you will be taking on by attempting this, but it can be done. There are many days where my day starts at 5am and I don't get home until after 10pm; where the in between time is non-stop, chaotic, and a constant balancing act between your passion (investing) and your W2 job. If you NEED your W2 job to keep the lights on at home and food on the table, then you always need to make sure you're not slacking at work to facilitate your passion. Most W2 employers don't take too kindly to pay you to do something besides what they are paying you to do. That being said, you would be amazed at what you can get done before work, during lunch, during breaks, and after work if you are motivated and efficient. 

Daniel...glad you are thinking along these lines.  As you can see, anything is possible if you put your mind to it!  And given you have a W-2 job you have a powerful ally in your corner: the ability to finance investment real estate with traditional/conventional financing.  I'm from San Diego, CA and I invest in Indianapolis...we have turnkey properties all the time that are quite profitable.  Here are some numbers from a REAL deal we have....37k purchase price, 20% down payment ($7400), rents for $600/mo...accounting for closing costs, property management, insurance and your mortgage payment this property generates 30% cash-on-cash return annually.  Show me another investment that can do that!!  Best of luck to you sir!  

Originally posted by @Arlen Chou :

@Daniel Ramirez I currently have a full time W2 job, married with 2 kids and do my own rehabs.  It is no way easy to do, but it can be done and it is really rewarding both financially and personally.

My kids are 13 and 11 and I do homework with them and help them prep for tests.  This takes planning, but can be done.  Their homework load is not that bad at this point.  

My W2 work runs a minimum of 40 hours per week, but much of my work can be done via email and smart phone.  

The rehab work is done on nights that kids homework/test schedule will allow.  As a matter of fact I will be heading to one of my properties tonight to put in a few hours of work installing kitchen cabinets. I pull my kids in on some weekends to help me with demo or painting.  I think getting kids out from behind screens and making things is important in this age of Youtube and Netflix.  

I do not watch TV, even during dinner... I have no idea what is going with the Walking Dead or Game of Thrones.  

Rehab time on a calendar timeline takes much longer, so holding costs are higher.  However, trying to find good, consistent and honest contractors that are affordable is not easy in the SF Bay Area economy.  So I forecast a budget using licensed contractors and back out potential extended holding costs of doing the work myself and compare overall potential dollars spent and decide if it makes sense to do the work myself.  I buy my materials during my lunch breaks so I am ready for a night or weekends worth of work.

During my drive to the site and back, I drive for dollars looking at neighborhoods around my property.  I don't have tons of cash to buy multiple buildings at one time, so learning neighborhoods is free and it does not take that much more time then driving directly home.

Many people would say I am crazy for doing work that I could pay somebody $15/hour to do.  However, the reality in my market is that if I get a contractor it is much more than $15/hour.  The guy I could pay this low of a rate is either undocumented or some retired guy who does not move very quickly.  In both of these situations you run the risk of workers comp lawsuit or worse.  I would much rather stay safe and pull the permits myself and do the work.  

Am I missing out on anything in life in exchange for this crazy schedule?  I still took my daughter to her Halloween dance last Friday and took my 11 year old son out for a 18 hole round of golf on Sunday.  I had breakfast and dinner with the family every day and I still had time to level a kitchen floor, install wainscot in the kitchen, install 2 lower cabinets in the kitchen and cut back some bushes.

It can totally be done, but you have to plan and stay focused!

Good luck!

-Arlen

Great multitasking!

Hi Daniel, I work FT and manage 2 SFR about 150 miles from where I live. It can be done. Even with limited time you'll surprise yourself where you find an extra 10 mins here or there to get things done. Im doing BRRR theory (Buy, rehab, refi, rent, repeat) and it's been a great learning experience so far. Although I'm a little bit handy and could do some of the work on weekends my plan is to be a Businessman not a Handyman (heard that on a BP podcast and liked it so Im stealing it!) so I am contracting all work and will roll that into the refi. A real estate agent friend of mine used to say "anybody can do anything if given the proper motivation". Good luck.

@Daniel Ramirez I'll add my voice to those saying it's possible.  In my case, I buy, heavy rehab, and hold for rent while working a full time tech job.  A couple observations about how I balance:

1. I really enjoy my job and don't plan to quit anytime soon, regardless of REI income. It's hard (impossible?) to do well on your W2 job if you'd rather be somewhere else.

2. On our current (large) rehab, I got high speed internet installed on the property right after purchasing it and setup a desk and chair as an onsite office.  That way, I can occasionally do my W2 work from the property when I need to be there at some point in the day.

3. I love doing the physical work (kitchens, trim, flooring, etc), but I simply can't manage any more.  With two young kids, I simply have to pay others do all the work.

4. As much as I enjoy the individual pieces of life (real estate, W2, family, personal), there are times I don't enjoy life holistically.  It's almost always because we're in the first 2 months of a purchase and rehab - it stresses my W2 job, my family, and me personally, and is something I'm trying to improve.  I wouldn't continue doing this if my W2, family, and myself wasn't able to flex a bit to make it all happen.

5. There are days when I think, "I could do so much more, so much better, if I just did this full time." There are more days when I'm very thankful to have both W2 and REI irons in the fire. I want to have two legs to stand on.

6. At some point, you have to make a choice.  Maybe that's around the 6 property / 15 unit mark.  Up until that point, the learnings you get by doing as much of the analysis, buying, rehabbing, and managing yourself is priceless.  Knowledge lasts forever and broad experience opens doors you don't yet know exist.

Good luck!

Daniel,  It is totally Possible.

I partnered up with a co worker. we both wanted to look into real estate investing Buy and holds.  we started buying hud properties as investors.   As an investor you get what's left after the owner occupants. usually the ones that need more extensive rehabbing.  We do most of our own work.  with the exception of HVAC, Major Plumbing, roofing, major electrical. WE know when to call in somebody.

Our philosophy has been , good roof, good floor, We can handle about anything else. If we can get a good 1/2 day in that's a great day. Our rehabs took a little longer in the beginning, Now we can get them mostly done in 30 to 45 days. we have done about 50 Houses now (SFR). We are currently holding I think 44 today. Our coverage span is about 200 miles, and we work on the farther ones on weekends. We have been doing this about 10 years now.

The rest of the story,  our w2 job provides:

The Good:

Health Insurance,  (im in my mid-late 50's)

paychecks, more money to invest, and pays my bills.  

Paid vacations.

The banks love the fact that we don't need the money from the rentals we reinvest about everything to pay off sooner.

 No employees, no workers comps, no one else tearing up my trucks and no one stealing or pawning my tools.   

The bad:

meeting city officials after hours and utility company's is very hard to do. usually involves a vacation day from work. 

extended holding costs just takes longer to finish the rehab.

End up hiring more contractors to finish some things  I could have done myself.

The hardest thing I have to do is keep reminding myself it's a rental. it doesn't have to be perfect. If it's a flip, that's a different story, nicer floors, ceiling fans, window treatments, etc. 

Flipping, not so much unless you have a crew working under you who actually does all the work, but that's usually further down the timeline. Buy and holds, on the other hand, are very doable while working full-time and with a family and such. I guarantee you I don't put more than 1 hour worth of thought on all my properties a YEAR. It's all about how willing you are to let other people manage your properties and such. And the most important part is the quality of the team.

But yes, very doable!

@Daniel Ramirez I can not speak to flipping, as that is not what I do. Yes you can. I have a full time job, and I am a buy & hold investor of 2-unit rentals (duplexes).  My units are new construction, which take a bit more of my effort, but do use a GC for all of my builds.  At present, I can only do one at a time.

As for the comments about not being able to do DIY stuff while fully employed, I dont agree.  On my new construction projects, I personally do all the painting, flooring and tile work, and phone/internet/cable wiring.  I do these in the evenings and weekend, and that helps me build equity.  

If your a total DIY landlord (as I am), you can make repairs and such in the evenings and weekends.  For major jobs, I do occasionally find a contractor to do the work.

great to hear about the different stories and stresses that everyone openly talks about. as a bystander investor, reading through these help me agree with myself that having a W2 full-time makes sense while i spend hours and hours of my waking time convincing myself to go and do it.

Originally posted by @Brie Schmidt :

I did it, I had 8 units before I left my job.  It wasn't easy, but you figure out a way.  And nothing will help you grow faster than a good paying W-2 job

 I agree on this one.

You need w2 income when getting started.

If your strategy is buy and hold, the best terms come from the first ten mortgages you can get and those will be conventional 30 yr fixed. They will want stable w2 income to come with the growing passive income you accumulate as you buy each one. Once you reach 10 cash flowing properties, depending on your income needs, you might start to be able to talk about making it a full time thing. But to get going you need to keep your job.