Dropping out to become an investor

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Dropping out to become an investor

Kenneth Noronha
Hamilton, Ontario · Member since 2016 · 33 posts · 7 votes

Hi BP,

I wanted to get your opinion on something that's been bugging me for a while now. First off, I'm 18 (turning 19 in a month) and I'm in my first year at McMaster in Hamilton in the engineering program. At the beginning of university I discovered RE investing and biggerpockets as well. I got very interested in the thought of creating a business on something that has been proven before and I now find it more interesting than ever.

What I wanted to do is possibly pursue RE a few years after getting a job as an automotive engineer after getting a master's degree since I love cars. I also thought it would take years to book learn the business and I thought I had to have that in order to succeed. While I still think this is true, I realized that you need a lot of time and real life experience to succeed in the business as well. As the year went on I also realized that automotive engineering isn't what I thought it would be.

My current position is that I want to drop out of school and pursue RE investing full time and do whatever it takes to succeed because that's my only option and goal. School work and clubs currently drag me down in terms of time and keep me from learning much about RE every day and it annoys me because I just want to get going and keep learning. While I get good grades, I just feel like studying for this degree is going to be useless to me because I want to build my own business and hate the idea of working for someone else for my whole life in the field I would like to be in. I have a plan on what I'm going to do as soon as summer starts, but I just wanted to get your opinion.

Sorry for the long post! 

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Michael Boyer
Investor · Juneau, AK · Member since 2015 · 980 posts · 741 votes
9y

Good news... Time is on your side as the Rolling Stones would say. 

And at 18, you don't have to have it all figured out yet. It is an ideal time to make these types of decisions on your future directions.

I know in the states, one issue small/beginning investors run into without a day job or stream of income is financing ( a nice way of saying banks may not loan to the unemployed unless they have some steady stream of income or collateral). This may or may not be an obstacle for you.

In the meantime, you can get some experience...With summer coming up, see if you can land a job with a property management company or with student housing--even just maintenance or doing routine paperwork. 

Then come fall, you may want to look at other majors before dropping out (like business, accounting, or finance--what I think they call "Commerce" in Canada)... maybe even try and set up an internship with a larger REIT or local real estate development firm. Maybe get into it (real estate) some before leaving school.

Plus, you can always do both. I was always secretly impressed with the college students that were simultaneously renting out rooms or units in a multiplex to other students (either working for the property manager or actually owning the place, having bought it creatively alone or with family).

Maybe keep studying and searching for your first rental property close to campus! 

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  • Michael Boyer
    Investor · Juneau, AK · Member since 2015 · 980 posts · 741 votes
    9y

    Good news... Time is on your side as the Rolling Stones would say. 

    And at 18, you don't have to have it all figured out yet. It is an ideal time to make these types of decisions on your future directions.

    I know in the states, one issue small/beginning investors run into without a day job or stream of income is financing ( a nice way of saying banks may not loan to the unemployed unless they have some steady stream of income or collateral). This may or may not be an obstacle for you.

    In the meantime, you can get some experience...With summer coming up, see if you can land a job with a property management company or with student housing--even just maintenance or doing routine paperwork. 

    Then come fall, you may want to look at other majors before dropping out (like business, accounting, or finance--what I think they call "Commerce" in Canada)... maybe even try and set up an internship with a larger REIT or local real estate development firm. Maybe get into it (real estate) some before leaving school.

    Plus, you can always do both. I was always secretly impressed with the college students that were simultaneously renting out rooms or units in a multiplex to other students (either working for the property manager or actually owning the place, having bought it creatively alone or with family).

    Maybe keep studying and searching for your first rental property close to campus! 

    3Reply
  • Benjamin Seibert
    Investor · Frederick, MD · Member since 2016 · 352 posts · 194 votes
    9y

    I agree with @Michael Boyer there is no rush to make a decision immediately. I am a senior at UMD graduating with a CEE degree. I first started getting interested in Real Estate a little over a year ago. For about 8 months, I had the idea that real estate was all I wanted to do. However, now I am seeing that I like the field I am going into and it isn't bad idea to work as an engineer for a few years. I will be as frugal as possible to save up money and start building a real estate investment portfolio, while earning a quality income. If in a few years I don't have enough time to devote to real estate and am financially independent, then I will make the decision to pursue real estate full time. For now, I plan on it being a part-time venture ~20ish hrs a week. 

    I would recommend giving it another semester/year before pulling the trigger on dropping out. Although it may be a good idea, it is extremely difficult to go back to college after dropping out if the business venture doesn't pan out. 

    0Reply
  • Jake Thomas
    Residential Real Estate Agent · Grand Rapids, MI · Member since 2013 · 803 posts · 689 votes
    9y

    You're young which is great. If it were me I would do both. Many young aspiring investors quit everything to go full-time investing buts its not that easy. I am not saying you can't do it but at the end of the day you need money to invest and without a good paying job money is hard to earn in the beginning stages. Sure, a lot of people wholesale and make a living but not many turn that into a real career. I double dipped with my job and investing and now I have transitioned careers to become a Realtor but I still need to earn an income to invest. Engineers make a great income and you will for sure accelerate your investing once you start you career. But for now I would stay in school and do investing on the side to become an expert by the time you actually start having the income to invest with. 

    Either way good luck!

    0Reply
  • Harjeet BhattiPro Member
    Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
    9y

    You are very young, Its my opinion you should finish your degree first and part time you can concentrate on you RE also. You are taking right steps for  your future just time management everything, it will take you to the right path. 

    1Reply
  • Kiersten Vance
    Real Estate Agent · Redlands, CA · Member since 2016 · 253 posts · 115 votes
    9y

    Hi @Kenneth Noronha

    My advice is do not drop out of college. You need to get a degree in something so that when the market crashes you have something to fall back on if your investments haven't gone well. You are 18, so mostly like can't get a loan from a bank or private investor because you have little to no experience. Unless you have access to funds, you will need a job and good credit score to qualify.  If you do not like automotive engineering, can you switch majors to something you do enjoy? Maybe something to do with business or real estate itself? You will become a much more valuable business partner and investor once you have gained some life experience. You can continue to learn about RE through college, maybe even purchase your first property during college, but do not drop out. 

    1Reply
  • Mike Oliveira
    Rental Property Investor · hamilton, Ontario · Member since 2015 · 66 posts · 15 votes
    9y

    @Kenneth Noronha I am by no means a big time investor yet but I feel what your going through. I was in electrical engineering for a year and as it went it on I realized more and more it was not what I wanted. I couldn't focus on it because I was not interested in it, and I would continue reading on real estate. I then dropped out and decided to look for a high paying job anywhere I could,while working at my other job to save the funds for investing. I am still working 2 jobs and saving for more properties and will leave my workplace when I have more income coming in from more properties to do investing full time. I feel that if your passion is real estate like it is mine then don't let anything get in your way from doing it. I do also agree on the suggestions for switching into a more business like program like economics or whatever it is. Switch into a more relatable program or drop out and start working to save money invest. Even with my 2 jobs my free time is spent on anything to do with real estate- also don't forget the amount of money you will spend on your program now when you really don't want to pursue that career.

    0Reply
  • Kenneth Noronha
    OP
    Hamilton, Ontario · Member since 2016 · 33 posts · 7 votes
    9y

    Thanks for the response guys! I'm definitely going to wait until the end of the semester and see if I still feel the same way. I simply don't want to put so much work into something I find I'll be less and less passionate about. While I would work hard, it would just seem more or less pointless since if I get a degree, I'm only planning to work for maybe up to 5 years. I'm also lucky to have my parents pay for my education, but I feel they need the money too especially since retirement is coming up very soon.

    @Mike Oliveira I'd definitely love to talk to you about your experience dropping out to pursue real estate. I actually had a plan on trying to find two jobs just to get a little bit of income.

    0Reply
  • Carl C.
    Investor · New York City, NY · Member since 2014 · 289 posts · 374 votes
    9y

    I would echo others comments. There is no need to rush and drop out of school yet. You have a lot of options and a college degree is rarely a bad idea as long as you aren't going into major debt for it. Having a degree will help you find a solid W2 job that will help finance your real estate goals. I would first consider changing majors before leaving school. I did this myself and it was eye opening. In the meantime why not find part time jobs that will help you gain skills needed for whatever interests you about investing. Right after college I worked for an investor turning his apartments as they became vacant. Valuable experience that I wish I had started sooner. Good luck!

    0Reply
  • Sam R.
    Investor · Bothell, WA · Member since 2015 · 88 posts · 55 votes
    9y

    I was able to get my start in RE on the side while I was working an engineering job during the day. Having the engineering salary definitely helped in getting loan approvals at first. If you were in high school, I would say definitely drop out as high school is a waste of time. A good college degree is actually worth the time.

    Being a student also gives you some unique opportunities. As others suggest, you can rent out rooms or units to other students. 

    0Reply
  • Elbert D.
    Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
    9y
    Kenneth Noronha those are definitely some grown man decisions haha. But seriously. Coming from someone who questioned the education system several times during undergraduate and was pursing a computer science degree. I'll say wait one more semester. And if you truthfully feel like your wasting time and money(4-6 years of undergraduate plus the money for tuition, books, etc) then go ahead and drop out. Only you can make that decision but always have a plan in place. You could still teach yourself engineering if you have a passion for it. You can be anything you want to be in this world!!! It just takes hard work and commitment. Don't be afraid of risk. But don't expect it to be easy at all. Embrace the process. Keep learning everyday. Real estate can be a passion of yours as well as engineering. You only fail when you quit something. Everything else is the learning experience. Failure is the sweat of success!
    3Reply
  • Steve B.
    Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
    9y
    If you drop out and don't finish your engineering degree I can almost promise you that you will regret it. It's irrelevant that you don't want to work for the man, the engineering degree is intrinsically valuable. You have plenty of time to get rich after graduation, don't assume the grass will be greener with RE investing.
    1Reply
  • Eli Molloy
    Civil Engineer · Missoula, MT · Member since 2015 · 46 posts · 21 votes
    9y

    +1 for finishing school. You get more than a degree out of college.  Skills learned in engineering are actually pretty valuable in RE investing. But, you could always consider switching to a degree that is directly connected to RE. 

    1Reply
  • Account Closed
    Parlin, NJ · Member since 2015 · 24 posts · 10 votes
    9y

    Maybe try giving school a break for now, you can always go back to pursue your degree. If I were you, I'd get my real estate license, learn as much as I could about whichever market I wanted to enter and start saving heavy to later use for a down payment. Regardless, you're young, focused and it seems like you're on the right track. Best of luck to you.

    1Reply
  • Kenneth Noronha
    OP
    Hamilton, Ontario · Member since 2016 · 33 posts · 7 votes
    9y

    @Eli Molloy @Steve B. Thanks for the responses. What skills gained from your engineering degrees have you used in your real estate investing careers (not trying to bash, I just want to know)? Also, Steve, I'm definitely not saying or thinking the grass will be greener with RE. The thing is I can spend more time learning real estate since I'm lacking on time in university; I'm on a university team called Eco Car which sucks up a lot of time. Being on the team would be extremely beneficial for an engineering student.

    The other problem I have is that I feel like I'm going to lose the passion and drive for real estate from inaction. To be honest I have very little money and a summer job would simply not pay enough even if I wanted to try and get a property this year. Trying to work part time during school days is virtually impossible without having grades slip. Call me crazy and call me stupid, but my thought is if others can do it why can't I? (podcast 180 is a good example, although I'm not expecting those results necessarily.

    Thanks to the others who responded. It's good to get different points of view and I will take your thoughts into consideration.

    0Reply
  • Jamison Colston
    Chattanooga, TN · Member since 2014 · 24 posts · 3 votes
    9y
    Go for it man. I can share my story to maybe help give some insight. When I graduated high school, I never had any plans to go to college. I already owned a detailing business pulling in almost 6 figures and my father had a couple of properties in which were already being rented out. Basically, after I graduated and found out about bigger pockets and of course with help from my father, I bought my first duplex. House hacked it and went from there. Aside from the small complications, it really was THAT simple. Now I'm 24, still learning, but pulling in ridiculous bank. I say this because, as mentioned up top, you're young and you want to take advantage of it while it's here. I had/have time to mess up and learn and adjust with little penalty. Oh and I'm also In college for a double major in civil engineering and philosophy(I love philosophy and want to publish in the field and I love applied physics). From a family of entrepreneurs I'm the first to go to college. Lol. Good luck man!
    1Reply
  • Steve B.
    Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    @Kenneth Noronha if you are in your first year then i'm not as adamant about staying in college as you aren't too invested.  Also my opinion would be different if your major was Albanian History rather than Engineering.

    Having said that I would recommend you get your real estate license while in school and work part time in Real Estate.  Take a lighter course-load if necessary.  You will find the studying required in passing your RE Exam is like adding another course in school at worse.  You should find out if your ostensible passion for real estate survives past actually working in real restate for any amount of time, especially in consideration of you starting with little or no money to invest.  Currently your enthusiasm for Real Estate is illusory, I wouldn't make any big decisions until that interest is actually fleshed out in practice.  

    As far as some the non-vocational advantages of getting your engineering degree it is the ability to design and implement effective and organised process and logically find solutions to challenging problems.  This  is in addition to all the math and other practical skills which will help you throughout your life.

    0Reply
  • Eli Molloy
    Civil Engineer · Missoula, MT · Member since 2015 · 46 posts · 21 votes
    9y

    @Kenneth Noronha The biggest cross over from engineer are the project management skills.  Estimating, scheduling, and most importantly people skills.  General construction and mechanical knowledge comes in handy as well.

    0Reply
  • William Walker
    Investor · Wilmington, NC · Member since 2016 · 211 posts · 262 votes
    9y

    Change your degree to something you're passionate about that will aid you in RE.  It would be more debatable if going to school was putting you in a crippling debt, but it's not. 

    0Reply
  • Joseph Hennis
    Fairfield, CA · Member since 2017 · 98 posts · 84 votes
    9y

    I did the opposite. Instead of dropping out and doing real estate, I dropped in! I bought my SFR first rental and went back to school at the same time. As it grew, I got a HELOC on that property and bought 4 more (2 more SFRs and 2 duplexes). That all was while going to school at UC Davis as a computer engineer. I was so busy with school work, a wife and 2 kids, that I was sleeping (or not!) in Kemper hall (senior design was insane).

    I finished my degree this summer and am now working, making good money which I am using to further invest in RE.

    Look, you need the back up income in case something goes wrong. It also gives you starter funds, and finishing your degree will give you credibility. Show us what you are made of, finish that degree!

    Also, don't be afraid to throw in some business classes... I took 2 economics classes, 2 accounting classes, 2 business classes, 3 real estate classes, and 1 property management class at my community college before transferring to the 4 yr college. Those classes were fun, and super easy after taking all my tough math, physics, and engineering courses. Nice padding for the GPA too.

    2Reply
  • Joseph Hennis
    Fairfield, CA · Member since 2017 · 98 posts · 84 votes
    9y

    I wish I could edit.... Also, having an income helps you get LOANS. Very important.

    0Reply
  • Joseph Hennis
    Fairfield, CA · Member since 2017 · 98 posts · 84 votes
    9y

    Oh and the real estate license. Did that while in school too. Sold a few houses which helped with funds to sell myself my first property. I would recommend that too.

    0Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    It is up to you, but you are stacking the odds against yourself by applying time and financial pressure.  If I were you , I would do both at the same time by staying in school and also investing.  There is a clear moment when the jump is right but burning the candle at both ends was one of the best decisions I could have made until it was very clear to go full time.

    1Reply
  • Evan Bell
    Real Estate Agent · San Diego, CA · Member since 2015 · 293 posts · 109 votes
    9y
    I say get your RE license and start selling some houses to bring in money. Then I say make a deal with your parents - you said they are paying for your school and are also nearing retirement - approach them as business partners for your first few properties. Have them help you finance these properties with the money they WOULD be putting towards your schooling and then make them 50/50 partners. This deal would help you secure a few properties, as well as help them add some cash to their retirement plan.
    0Reply
  • Mark Fedorov
    Allentown, PA · Member since 2014 · 264 posts · 120 votes
    9y

    Stay in school. 

    I have a Mech E Degree and it is invaluable in the RE business. Engineering degrees teach you how to learn new things and how to figure out processes. I can stand there with ANY contractor and know if he is BSing me, I also have enough training that I can dive into books and articles and see how things work.

    I think the big question for you is that is your degree path not what you want or is RE the best option that you know about now? 

    Just because you have a degree in Automotive engineering does not mean you will (or have to) get a job in that field. Many people who do automotive work have other degrees, many people with automotive degrees do other things. Now may be a good time to talk to you advisor and the career planning office. Have the conversation with them about your indecisiveness about your degree. If you are a freshman, you probably do not have a lot of electives yet to take courses in other fields, but you should try to fit them in, or ask if you can audit a class in Business, Real Estate, Accounting or different engineering fields,

    Engineering is tough, I questioned my dedication to it many times over those 4 years, but it was a great 1st step to a career... and you have to realize that it is only your first step.

    2Reply
  • Iverem Rose
    Brooklyn, NY · Member since 2016 · 152 posts · 44 votes
    9y

    @Kenneth Noronha I'd try to change my major to something related to business  and see how you feel before dropping out. Maybe by switching, you will be able to free up some time for yourself to continue learning about real estate.  If you do decide to drop out, make sure you have a plan in place because real estate investing is a tough business and there will be as many downs and as there are ups when you first start out. Seek out and ingratiate yourself to local experienced investors in your area. Offer to take them out to lunch and provide a service that fills a void in their business. Your willingness to help them will in turn make them more receptive to serve as a mentor to you and show you the ropes.

    0Reply
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