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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  • Elizabeth Wilson
    Real Estate Investor · Memphis, TN · Member since 2016 · 940 posts · 695 votes
    9y

    @Kenneth Noronha -  Great advice here.  Honestly, you can't go wrong with any of these options.  

    My husband and I both graduated last spring (finance and MBA degrees, respectfully) while working full-time flipping houses and running a food business.   So it can be done!  (and we did it in 2 years!)

    Here is my 5 cents:

    1. Graduate.  While you may find it a waste of time like we did, most jobs/people require at least a bachelor's degree.  No better time to do it than now and you won't know if you'll need it later.

    2. Work for a REI while in school. Invaluable for contacts, knowledge and money.

    3. Become a real estate agent.  Many colleges now give credit for certifications like that.  (My husband was able to get out of all of his electives by having "experiential learning credit" - something to check out!)

    4.  Not sure if CLEP exists in Canada but test out of as many basic, gen ed classes as you can.  No reason to waste a semester in those.  If you are interested in a subject, buy a book.

    5. Use this time to network as often as you can at any event you can.  

    Best of luck!

    1Reply
  • Chris Azer
    Mississauga, Ontario · Member since 2016 · 16 posts · 3 votes
    9y

    Kennith, 

    Im in the same boat as you in a sense. Im currently working a full time job in I.T. I live in Toronto not too far from you. I can see that you are very eager to jump into REI. I realized about last year that all I wanted to do was invest in real estate as well. I have no interest in working a job for a boss who can tell me when and what i can and cant do. Im dont think working this job is best for my goal of becoming a successful full time investor. I took a course and signed up for a really expensive mentor-ship program(A scam GURU course - did still learn a lot but not worth the price tag imo). A year later and i haven't made any real money yet but I have learned a lot!

    Just curious, are you planning on learning how to invest in Canadian RE or in the USA?

    Also If you want to connect I would love to learn more about your plans. Maybe go for a coffee and talk investing? Im looking for like minded motivated people to team up with. 

    0Reply
  • Jay LohnBusiness Member
    Real Estate Agent & Investor · Champlin, MN · Member since 2014 · 179 posts · 43 votes
    9y

    @Kenneth Noronha

    My two cents on a couple things.

    1. Although college is WAY more expensive now than we I graduated, a college degree is a cornerstone for learning and will open up opportunities for the rest of your life, besides only 1/3 of students that drop out and return to college end up completing their degree.  It will be very hard to startup again if you drop out now.

    2. Only 60% of graduates use their degree in the field they graduated from, so rather than going into specific engineering degree that you might find out later that you don't like go towards a business management degree.  EVERYTHING is a business whether you work at church, non-profit, real estate investing the principals behind a business degree will apply to all and you can use your degree in multiple fields.  

    3. It is not a news flash but you have to have money to play in the world of real estate investing, I know you can do creative financing but the majority of deals require some capital to play.  Your earning potential with a degree vs. high school diploma go up exponentially.  You can keep sharpening your business skills why working in a variety of fields, keeping saving to get into more deals, keep building your portfolio, while having some stability of steady pay until you get to the point where your portfolio is large enough that you can quit your day job and invest full-time.

    Just one guys opinion who has been an entrepreneur for years in multiple different business & industries and have seen partners in the past jump over too quick from their day job into the new business only to get burnt.  The good thing is you have youth on your side, plenty of time to take your lumps and not get hurt too bad.

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  • Albi Kociu
    North Jersey · Member since 2015 · 13 posts · 5 votes
    9y

    Ok, I'm going to take the other side here. 

    A college degree is absolutely useless when you have the mindset that you do. It is especially useless if you're taking on student debt. I obviously don't know you at all, but from the way you write, I can tell that you've got a good head on your shoulders. You've clearly put some thought into this and what I would say is, take everyone's advice with a grain of salt. At the end of the day, everyone has their own biases and own life experiences that are factoring into their replies here. 

    With that being said, I got my college degree 8 years ago because it was just the thing to do. Anything else would've been absolutely unacceptable to my parents. I didn't even consider entrepreneurship and not working for someone else as possibilities, even though that's what I had been wanting all along. I can tell you that every job I've held since college has been soul-crushing and not related to my degree at all.

    Speaking of degrees, I noticed you said engineering wasn't what you thought it would be. That's the case for every major that you can pick, and that's the big problem with college. Asking kids who are in their late teens to pick what they're going to do for the rest of their lives is ludicrous. No one has any idea what that job looks like on a daily basis ... and especially what that job looks like 10 years from now. Technology is advancing so rapidly that there is no way colleges can keep up. They are ancient institutions and haven't evolved since they began. Now you see some schools offering online classes for free (which is diluting their brand, because it is now less prestigious to have a degree from a big time school when I can just take those courses online for free). 

    A college degree matters less and less every day. In 10 years, it probably won't matter at all. I say that keeping in mind what you wrote in your original post - that you have that yearning to put in the WORK and learn RE investing. If you have that entrepreneurial drive and hunger, you will be just fine learning on your own. I was nowhere near your mindset 8 years ago.

    Another thing to keep in mind is that your mind will change over time. You can really like RE investing now, but when Virtual Reality comes around, maybe you really get into creating VR games. You have to realize that interests change over time. And that's completely ok. 

    Getting a degree in something "general" is a COMPLETE waste of time. You learn nothing that you're going to use in the real world. Unless you're going to be a doctor or lawyer or something specific that requires a degree (and it doesn't sound like you are), I'd say drop out. BUT, you have to understand that you need to be practical at the same time. You need to make money (unless you're going to live at home and your parents are going to support your entrepreneurial ambitions). As long as you're willing to put in the WORK, you don't really need college. 

    /rant

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  • Kyle Cuppy
    Minneapolis, MN · Member since 2017 · 16 posts · 4 votes
    9y

    I would say get your degree and work full time and have RE as a side gig until it produces enough income for you to quit your job. That is what I am doing and I am 27 years old working in banking and stashing cash while I wait for the right opportunity. I am a believer in having options vs only one route.

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

    Thanks for all your points of view, this is really helpful guys. My only fear is making a rash decision to drop only to find that I don't like real estate very much. Though to be honest I've never felt this much excitement or passion for something this big before. @Albi Kociu right now I feel and think the same thoughts in your post. Thank you so much! 

    0Reply
  • Florence Lee
    Toronto, Ontario · Member since 2016 · 30 posts · 23 votes
    9y

    Use the next semester to take some business courses such as Finance and Marketing see how you feel about switching your major to Business. I'm completing my executive MBA right now and see value in the logic, math and project management skills my engineering classmates bring to the table.

    A Business/Commerce degree is very valuable as it helps you speak the language of business, helps you crunch numbers and evaluate the value of investments, learn how to develop a marketing strategy, organizational behavior to understand what makes people tick plus manage teams/relationships such as contractor and other investors, and so on.

    It's worth completing a degree as it's the minimum bar for most jobs, and banks have strict lending guidelines and it is difficult to borrow without a job at least until you've established yourself. I was at a meetup tonight and many investors have their own businesses mentioned it's very challenging to expand their portfolio without a steady paycheque. One even shared it was a mistake to quit her job before getting a mortgage.

    I believe there are meetups in Hamilton too which will be a great resource for learning and gauge your interest.

    Good luck and let us know how it goes!

    1Reply
  • Luc Boiron
    Specialist · Toronto, Ontario · Member since 2016 · 564 posts · 425 votes
    9y

    @Kenneth Noronha I also recommend you don't drop out.

    If you want to do some real estate, get your RE license as has already been recommended. It is hard at your age to become a full time real estate investor, and you won't find a job making a ton of money either.

    Ideally, you finish your university degree, do well, get a good job, work a couple of years and use that income to buy a few rental properties as a solid base, then go into RE full time.

    I bought my first rental at in 2007 in my first year of my undergrad business degree at Schulich. I managed that property, eventually sold it, went to law school, got my JD from Osgoode and an MBA from Schulich, bought a few more properties, got licensed as a lawyer, and then went into RE full time. I am now in a position where my RE can explode in growth, and it is, but this happened because of putting myself in the position I am.

    To really grow in RE as an investor, you will need investors. Investors are less likely to invest with drop-outs. Also, some of my investors are friends from school. They have good jobs, work hard, but aren't presented with the same investment opportunities that I am, so I am able to help them and make money doing it.

    Stay in school!

    0Reply
  • David Walls
    Investor · Chicago, IL · Member since 2014 · 81 posts · 35 votes
    9y

    Hello @Kenneth Noronha, I agree with @Elbert D. and I was in the situation that you're in. Everyone's decision will solely be based on what that person wants to do. I did 2 years at the University of Illinois and it wasn't what I wanted and I was accumulating debt so I left. Is it easy? Definitely not. You'll have to get a job if you don't have anyone to give or loan you money and you'll have to do RE part time but it's possible. I left with a good standing (3.0 GPA) and I believe I can be always go back. But also remember real estate isn't going anywhere just like college isn't. There's no rush to make a decision unless you're acquiring lots of debt. You're very young and so am I (20). Just some of my insight, best of luck to you on your decision!

    0Reply
  • Martin Morales
    Investor · Brooklyn, NY · Member since 2017 · 47 posts · 25 votes
    9y
    It all depends? If you have a Scholarship or grants? I'm all in education! Debt/loans? Uh, I'd reconsidered. School debt is peaking 1.2 trillion dollars. Passion for RE? Doubting Engineering? Then that isn't your passion, Follow your passion and make it happen.
    0Reply
  • Teri Feeney Styers
    Real Estate Agent · Grand Junction, CO · Member since 2015 · 1k+ posts · 736 votes
    9y

    @Kenneth Noronha get your engineering degree - huge asset - you won't regret the time invested down the road. That said - I get your eagerness to do something NOW! So, can you satisfy your "sweet tooth" for real estate by buying something in your college town? A house with a few bedrooms and get roommates to pay the mortgage for you? Might get the parents involved in that one if it saves $$ on housing... 

    0Reply
  • Scott Steffek
    Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes
    9y

    Ken,

    Having been in the RE business for quite some time, I'm going to recommend you stay in school. Here's why. If you finish school, you now have a "career". It may not be the career you want, but it will put the bread and butter on the table. That's more important than anything right now! You can always pursue real estate part time. You can follow your dreams while you make money. I see so many people come into this business thinking they're going to be millionaires in 6 months, that it makes my stomach turn. I would bet you that 90% of the "newbies" that are currently on this site, won't be around in a year.  Real estate is no different than starting any other business. It takes extremely hard work, perseverance, guts and time. I don't know if you have the first three, but I do know you have the time, based on your age. This is the hardest business I have ever done, hands down. I've been in upper management positions and many other jobs, but this one takes the cake. You need to know how to treat people. You need to know how to talk to others. How to negotiate. How to see through  the "poo poo" people will constantly feed you. You need to be very organized. You need to have a system. You need to be very flexible. You need a team. You need to know how to network with others. You need to think outside of the box. You need money. You need to be Mr. personality. You need to work 7 days a week. You need to work 60-90 hours a week for months and months, possibly years, to build the business. I'm not trying to steer you away from the business. I love it. I really do. But I want you to know the true reality of what it takes and what to expect. In my opinion, anyone who's successful in this business will agree with everything I just told you.  Yes, the money is good, when it starts to come in. But you and only you, can make that money start to flow. Not everyone is cut out to run their own business. Some people are cut out to work for a corporation and collect that weekly check and that's ok. To each his own. You have to evaluate whether or not you're willing to sacrifice things in your life, to do this business. Believe me, you will make a lot of sacrifices!  If you're not willing to consistently work 7 days a week and 80 hours a week for months and months to build the business, don't kid yourself. Stay in corporate America. You're better off. If you're willing to do what I mentioned, God bless you and I wish you the very best of luck. 

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

    @Scott Steffek it's funny because that's almost exactly what I was expecting. Real estate, I realize, is ultimately a business that needs to be taken care of. For me if it means incredible success in the future then why can't I do it? It's pretty obvious by now that real estate isn't going to make me a millionaire in 6 months, but it is possible in 10-12 years. Am I expecting that? Not necessarily; it depends only on how I perform. Other than that, I agree with everything you said about this industry. That's just my train of thought.

    0Reply
  • Scott Steffek
    Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes
    9y

    Kenneth,

    I already feel better after reading your response!  You obviously have a good head on your shoulders and that's invaluable. I love this business, I really do. But way too many people "sugar" coat the business and the true facts about it.  At your age, you have all the time in the world to pursue RE and do it at your own pace. That's a huge benefit over others. Get your education and stay on BP and other RE websites. Gather all the knowledge you can, at your own pace. Absorb as much as you can. Knowledge is power. Surround yourself with the best and the brightest and you'll go far. I wish you the very best of luck an I'll look you up in 5 years! 

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