Is college worth a real estate investors time?

43 Replies

Hello BP community! Recently I decided to take this spring semester off from school to take the time and really decide if college / the degree path that I was on was really something that I wanted. Currently I am about a week away from finishing up my first flip. It’s going great and I really enjoy it! I’m set to close on my second flip on the 1st of March. My parents have been investing in real estate for 10 years and, growing up I was spending my weekends working at their properties while watching and learning as much as I could about real estate. I’ve been attending my local REIA meetings have surrounded myself with every book I can get my hands on that relates to real estate investing and business / entrepreneurship. I genuinely believe this is something I could excel in and actually enjoy doing. However, my biggest concern right now is regarding school. Is a college degree worth it, or should I spend that time & money that I would have to drop in school and instead, invest it into learning and getting to know real estate and networking? As a fellow real estate investor, what would you recommend? And why? I really appreciate all responses and look forward to reading them! Cheers, -Logan Jorns
Originally posted by @Logan Jorns :
Hello BP community!

Recently I decided to take this spring semester off from school to take the time and really decide if college / the degree path that I was on was really something that I wanted.

Currently I am about a week away from finishing up my first flip. It’s going great and I really enjoy it! I’m set to close on my second flip on the 1st of March. My parents have been investing in real estate for 10 years and, growing up I was spending my weekends working at their properties while watching and learning as much as I could about real estate.

I've been attending my local REIA meetings have surrounded myself with every book I can get my hands on that relates to real estate investing and business / entrepreneurship. I genuinely believe this is something I could excel in and actually enjoy doing.

However, my biggest concern right now is regarding school. Is a college degree worth it, or should I spend that time & money that I would have to drop in school and instead, invest it into learning and getting to know real estate and networking?

As a fellow real estate investor, what would you recommend? And why?

I really appreciate all responses and look forward to reading them!

Cheers, -Logan Jorns

College is a great place to waste parents money. lol.  OK kidding aside. College does have value for people who want to discover what's out there, and most of them go on to get a desk job (like me).  If you have already made up your mind on what you want to do, then you should follow your heart and go for it.  You seem young. If you feel like, you can always enroll in school. 

I firmly believe that in order to succeed in life you need only a few basic things.. 

A) Vehicle.. (What better vehicle than real estate)

B) Communication Skills

C) Basic Math

D) People Skills. 

E) Good Value System 

Neither of the aforementioned has anything to do with college degree, and can be achieved without one.  Good luck.. 

Id say generally yes. But I also live in the part of the country with the highest percentage of college graduates, and graduate degrees.  Im the only one in my social circle without a graduate degree.

A degree in what may we ask? Jamaican bobsled making? German polka history? Business? Marketing?

How far are you along? Racking up student loans?

I know successful people that majored in history or music. What they do now has nothing to do with their degrees. It was a nice experience. Hopefully they didn't go deeply in debt while there. 

I have a degree in finance and was glad I had it while I worked. I can still figure the NPV given future cf projections, but thats about it. I didn't become full time RE til 31 and also glad to have had that nice w2 to get financed. A lot of people have a job or career in addition to their RE endeavours. A lot tougher to obtain  loans without a w-2.

So  if getting a marketable skill or sheepskin without a bunch of debt, it doesn't hurt. If a bunch of debt and no economic benefit... 

How much time do you have left? Are you paying for it or are your parents?

Since you’ve already paused and are considering whether or not to continue, I would treat it as you would any other investment (college tuition is a rather large investment, depending where you go). Do you think the added tuition costs, time lost to classes, and the eventual degree will pay off with revenue you would not have been able to obtain without it? Or do you think you could go on the same path and be just as successful without the degree? I went to college but didn’t fall into real estate until my junior year. My business degree helped me land a good w-2 job, which helps fund REI.

Well I was in the college doesn’t really matter camp for a long time. However, I went back to school and finished my undergrad and then went on to get a Masters in International Real Estate. I would say both have been hugely beneficial for my investing and the growth of my career. But, it’s hard to give advice in a vacuum without knowing the bigger picture. Are you incurring debt? What is the degree in? What is your future goals?

I have never talked to anyone that was harmed by having a college degree. On the other hand, there are many classes that support real estate investing. Finance, Marketing, Psychology, Construction Project Management,  Accounting, Business Law, Real estate Principles to name a few. Having a degree can be a huge benefit if the market crashes and you need a Plan B. You have a lot of years ahead of you, give yourself the maximum number of options to pursure, and don't limit yourself. 

Originally posted by @Steve Vaughan :

A degree in what may we ask? Jamaican bobsled making? German polka history? Business? Marketing?

How far are you along? Racking up student loans?

I know successful people that majored in history or music. What they do now has nothing to do with their degrees. It was a nice experience. Hopefully they didn't go deeply in debt while there. 

I have a degree in finance and was glad I had it while I worked. I can still figure the NPV given future cf projections, but thats about it. I didn't become full time RE til 31 and also glad to have had that nice w2 to get financed. A lot of people have a job or career in addition to their RE endeavours. A lot tougher to obtain  loans without a w-2.

So  if getting a marketable skill or sheepskin without a bunch of debt, it doesn't hurt. If a bunch of debt and no economic benefit... 

 I am on year 3 of 7 for a Pharm.D. However, if I we're to further my education I would switch to something more business related. Pharmacy school is extremely expensive, 40-60k per year. If I do go back it would be wherever is cheapest. 

Originally posted by @Alex Johnson :

How much time do you have left? Are you paying for it or are your parents?

Since you've already paused and are considering whether or not to continue, I would treat it as you would any other investment (college tuition is a rather large investment, depending where you go). Do you think the added tuition costs, time lost to classes, and the eventual degree will pay off with revenue you would not have been able to obtain without it? Or do you think you could go on the same path and be just as successful without the degree? I went to college but didn't fall into real estate until my junior year. My business degree helped me land a good w-2 job, which helps fund REI.

Exactly right. It's a large investment. The path that I paused was for a Pharm.D. I am on year 3 of 7 for that very expensive track. All said and done, I would come out with 250K in debt. I agree with you on the w-2 to help fund REI, which is why if I were to go back, I would return to wherever is cheapest, (possibly online so I could continue with REI while "at" school) and works the best with my transfer credits.

Originally posted by @Jake Harris :

Well I was in the college doesn’t really matter camp for a long time. However, I went back to school and finished my undergrad and then went on to get a Masters in International Real Estate. I would say both have been hugely beneficial for my investing and the growth of my career. But, it’s hard to give advice in a vacuum without knowing the bigger picture. Are you incurring debt? What is the degree in? What is your future goals?

Jake, I am taking on a massive amount of debt for Pharmacy School. I am paying my way through it, and if I were to finish out all seven years, I would have ~250K of debt. If I were to return to school, I was thinking of getting some sort of business related degree to help with REI. Possibly taking classes online so I could continue to invest in RE while building my personal resume and have an option to land a good w-2 job to fund future investments. Currently, I am 20 and by 30 my goal is to be completely financially independent with a minimum of 300 units. I would like to scale up to larger multifamily properties once I have a large enough cash reserve that is built up through flipping and possibly a 1031. I just don't know if I'm shooting myself in the foot by not having a degree so that I can have a good w-2 job to help with my scaling?

The answer to this question will vary person-to-person and most college experiences aren't apples-to-apples anyway. The name/brand of your school, your legacy/networks, and quite frankly just random luck will play such huge factors into what path you take out of college. My point to this is not to take any one (or even group of) answer to your question as gospel, including mine.

That said, I'm in a bit of a unique position to lend input to your problem. I dropped out of college when I was 19 to pursue entrepreneurship, went back when I was 23, and then went for my MBA when I was 28 (I like to joke on job interviews that I'm part of a rare subset of "college dropouts who have a masters"). Without getting too much into it here, I was doing extremely well with my business when I dropped out. I already had proven a solid track record of sustainable income while doing the business part-time, and it was very clear to everybody around me (parents, college advisers) that my time was better spent pursuing that business full-time than to finish my last 3 years of college (where best case was probably getting a job making less than I was already making part-time). I had good years with the business -- much better than I would have had doing it in lockstep with school -- but I had to give it up 4 years later due to reasons beyond my control.

My college experience (at least my second one) was a huge negative. I picked a school close to home that didn't have a big brand name, which made finding a job extremely tough. Not to mention that a lot of Corporate America isn't exactly open-minded when it comes to people who took the "non-linear" path to get in front of them (Corporate hiring managers are notoriously risk averse because they'll usually have 100 other candidates who are deemed to be "safer" than you. I'd spend so much time on interviews basically having to defend myself for leaving school to do something else that they'd barely discuss my actual skills or credentials).

I went back for my MBA years later basically as a double-down on what I already had considered to be a bad decision. I was certainly heading in a much more positive direction during grad school, but ironically I might be the only person in the world who got fired for finishing his graduate degree (I got downsized because the company felt they could no longer afford the promotion they had promised me if/when I graduated). While I'm optimistic I'll be back in something in the next few weeks, let the record show that 4 of my first 6 months after getting my masters have been spent unemployed :)

My point in sharing this with you is the following:

1) Is college really worth it? Most likely no, unless you are A) going to a big name school; B) have a significant scholarship, are not paying for it yourself, or if it's at least just like a cheap state school; or C) have family who are going to gift you a career when you graduate. Anything outside those 3 are largely going to be reliant on random walks of luck, which is inherently a sucker's bet.

2) However, you need to be positive that your time is better spent outside of school to justify leaving. If you can already flip houses while in school, then are you 110% positive you can immediately scale that with the added time? I don't just mean that your plan is to read more books and attend more meetings. I mean that if you can flip 2 houses while in school now, then can you immediately flip 6-8 with the time added by removing school?

3) While you could always go back to school later, remember that once you leave the linear educational path that you're probably going to have to defend that decision for the rest of your life, and the majority of people aren't as open-minded as you would hope.

Originally posted by @Jason L. :

The answer to this question will vary person-to-person and most college experiences aren't apples-to-apples anyway. The name/brand of your school, your legacy/networks, and quite frankly just random luck will play such huge factors into what path you take out of college. My point to this is not to take any one (or even group of) answer to your question as gospel, including mine.

That said, I'm in a bit of a unique position to lend input to your problem. I dropped out of college when I was 19 to pursue entrepreneurship, went back when I was 23, and then went for my MBA when I was 28 (I like to joke on job interviews that I'm part of a rare subset of "college dropouts who have a masters"). Without getting too much into it here, I was doing extremely well with my business when I dropped out. I already had proven a solid track record of sustainable income while doing the business part-time, and it was very clear to everybody around me (parents, college advisers) that my time was better spent pursuing that business full-time than to finish my last 3 years of college (where best case was probably getting a job making less than I was already making part-time). I had good years with the business -- much better than I would have had doing it in lockstep with school -- but I had to give it up 4 years later due to reasons beyond my control.

My college experience (at least my second one) was a huge negative. I picked a school close to home that didn't have a big brand name, which made finding a job extremely tough. Not to mention that a lot of Corporate America isn't exactly open-minded when it comes to people who took the "non-linear" path to get in front of them (Corporate hiring managers are notoriously risk averse because they'll usually have 100 other candidates who are deemed to be "safer" than you. I'd spend so much time on interviews basically having to defend myself for leaving school to do something else that they'd barely discuss my actual skills or credentials).

I went back for my MBA years later basically as a double-down on what I already had considered to be a bad decision. I was certainly heading in a much more positive direction during grad school, but ironically I might be the only person in the world who got fired for finishing his graduate degree (I got downsized because the company felt they could no longer afford the promotion they had promised me if/when I graduated). While I'm optimistic I'll be back in something in the next few weeks, let the record show that 4 of my first 6 months after getting my masters have been spent unemployed :)

My point in sharing this with you is the following:

1) Is college really worth it? Most likely no, unless you are A) going to a big name school; B) have a significant scholarship, are not paying for it yourself, or if it's at least just like a cheap state school; or C) have family who are going to gift you a career when you graduate. Anything outside those 3 are largely going to be reliant on random walks of luck, which is inherently a sucker's bet.

2) However, you need to be positive that your time is better spent outside of school to justify leaving. If you can already flip houses while in school, then are you 110% positive you can immediately scale that with the added time? I don't just mean that your plan is to read more books and attend more meetings. I mean that if you can flip 2 houses while in school now, then can you immediately flip 6-8 with the time added by removing school?

3) While you could always go back to school later, remember that once you leave the linear educational path that you're probably going to have to defend that decision for the rest of your life, and the majority of people aren't as open-minded as you would hope.

Really appreciate the detailed response. I think you're absolutely right, this isn't a cookie cutter decision. There are unique factors that come into play. I'm just trying to figure out if I really need a degree to scale up, or can I use 1031s / OPM to grow? I was on year of 3 of 7 of a Pharm.D. If I go back, I would switch to a business degree to help with REI. Possibly an online degree that way I could continue to work on my RE portfolio.

Originally posted by @Karen Margrave :

I have never talked to anyone that was harmed by having a college degree. On the other hand, there are many classes that support real estate investing. Finance, Marketing, Psychology, Construction Project Management,  Accounting, Business Law, Real estate Principles to name a few. Having a degree can be a huge benefit if the market crashes and you need a Plan B. You have a lot of years ahead of you, give yourself the maximum number of options to pursure, and don't limit yourself. 

Thousands of dollars it costs to go to college is a huge negative factor in education. Usually these comes in form of student loans. I have friends who make car payment of $300 and student loan payment of $600. Go figure. Now if you have degree in Engineering or Accounting that can get you a $50K-60K job that's one thing, but what does degree in Psychology and Marketing get you... Nada..  I have a friend who was a marketing major and now she is an HR. LOL.. 

What do college teach? Nothing as far as critical thinking goes.. Does college teach you, how to handle difficult people? Nope.  Does college teach you good manners? Do they teach you politeness?  Half of these academic professors have never had a real job in their life.. Most of the college is memorizing crap and vomiting it on the tests. 

And lastly.. Do you really think that a person can have a career these days by going to college and getting a degree as a PLAN B.  That's perhaps the most dangerous advice I have seen anyone give...  You can't expect to have well paying job, by treating it as a PLAN B. A gap of couple of months on the resume is a huge negative these days.. That's why its hard for unemployed people to get a job.  

If you want to really succeed in your corporate career, you better be 100% motivated.  Half a$$ed attempt ain't gonna get you anywhere.. 

I have bachelors in Information Technology from Penn State and MBA from George Mason University.. So I am not just talking the talk.. I have walked the walk.. 

@Logan Jorns    I really think you should stay in school unless you absolutely hate it.  You are currently limiting yourself to a certain kind of real estate.  Are you only interested in doing flips?  Flipping is the hardest kind of real estate to scale up.

The average salary of a person with the degree you mentioned is $146,650. That is very good even if you consider the up front costs. So financially, it is a good degree plan to pick.  Many people that do flips do not make that much a year.  Actually some years many of them make NOTHING.

Some of the people with that degree that work at large hospitals actually work a compressed work week. It might be possible to do flips and have the job at the same time.  Financially that might be one of the best options.  

Also there is the networking potential.  There is huge financial benefit to having a network of high income friends.

Two last thing to remember... 

A)   Some of the best people with that degree plan and that are lucky earn huge bonuses that are not included in the salary average.

B)  Timing is everything.  Nobody says... "I really wish I would have bought more real estate at the peak of the market.  and NOBODY says... "I wish I did not have this $146,650 a year safety net if this does not work out."

Originally posted by @Logan Jorns :

Really appreciate the detailed response. I think you're absolutely right, this isn't a cookie cutter decision. There are unique factors that come into play. I'm just trying to figure out if I really need a degree to scale up, or can I use 1031s / OPM to grow? I was on year of 3 of 7 of a Pharm.D. If I go back, I would switch to a business degree to help with REI. Possibly an online degree that way I could continue to work on my RE portfolio.

Honestly, it sounds like it's still too early for you to be considering dropping out. I'm envious of your REI experience at your age (hell I'm envious at my age), but you still are very early in your journey. If there's not an urgent need to scale your business today, then there's no need to stick all your eggs in that basket yet.

Think of like a great freshman college football player. You may seem like the next big thing, but there's a reason the NFL won't take you until after your junior year. Too many things can go wrong between that great freshman year and the time you're actually ready to be drafted to the pros (or as we New York Jets fans call it, Christian Hackenberg Syndrome). That's why even those great freshman players have to keep working on their degree, even if it seems they're destined to be stars in the NFL: they should have something to fallback on, and the alternative of trying to get a job without any degree is generally worse for your career prospects than having one that you admittedly overpaid for.

Keep your options open. 300 units in 10 years is a very ambitious goal. Maybe make the move full-time when you're 20% of the way there and you have that consistent body of work as proof of concept. Right now, there's likely very little you can do with your spare time that would be of higher value than just finishing a degree (especially when you're half way there). 

@Michael Biggs You hit the nail on the head. Yes I would have a decent salary and a network of high income individuals. However, at 26 years old I’ll will have just graduated with about +250k of student debt. On top of that, a Pharmacy is not something that really lites the fire in my eyes. I’m definitely smart enough to finish the program, it’s a matter of if it’s worth it. Essentially, what I’m concerned with is the next 6 years. Either I:
A) stick with Pharmacy, have a mountain of debt but a high salary
B) forget college, continue to flip until I build up a large enough cash reserve to purchase first multifamily and scale from there
C) get a degree online (something to do with business) while continuing to grow my REIs and scale up to multi family

My goal is to move into large multi family properties and be completely financially independent by 30. These flips are more for learning and getting my feet wet, while building up a nice cash reserve to use as a down payment on my first multi family.

@Logan Jorns   What do you think about research?   On the issue of debt compare student loan debt to real estate debt.  How much annual income can you get from $250,000 of each?

I think getting your degree would be a great idea.  The nice thing about this is that it gives you much more options throughout your life.  Good careers are much easier to come by if you have your degree.  I am a big believer in plan for the best, but prepare for the worst. The great thing about real estate is you can do it at the same time as being a student, so you can prepare for your future in both worlds.  You can plan to be a full-time real estate investor, but prepared in case it doesn't work out for one reason or the next.  Ultimately, you have to make the decision for whats best for you, but that's my 2 cents

@Logan Jorns , congrats on finding your passion in the RE game. But here is the flip side of the coin:

The degree makes for a great safety net, in case RE takes a bad turn at some point...like 2008 for example. Now having said that, your degree should be in something useful to society like STEM degrees. People who understand science and tech will be in high demand for the foreseeable future.

On the flip side, while you are doing your flipping gig, pick up certifications like PMP, which are in high demand and will keep food on your table if the flipping thing doesn't do well for a few years. Also, if you go the certification route, sales, sales, and more sales training from outfits like Grant Cardone.

@Logan Jorns The answer depends on you. College isn't for everyone. And really, school is what you make out of it. Just like a successful business. It's not the school but you and what you get out of it. Since you're young, you have time to make mistakes. But sooner or later, life passes by and you realize there are other people you have to take care of such as a family. I've met other entrepreneurs in real estate who've given up a lot for real estate. But their family suffered. It's not easy to be successful in real estate. Like any business, it takes time. And there could be factors out of your control. With that being said, you may want to network but also work (or study) in the real estate field if this is something you want to pursue. Good luck! 

You sound like me 30 years ago.. I decided I could learn more from buying and reading business and real estate books that I could sitting in a college class learning about things I would never use in the real world. 

You sound like you know you are going into real estate.  I would just go directly into a business in the real estate field.. Either becoming a real estate agent or mortgage broker. 

My best friend out of Medical School with $250k in Debt and doesn't like being a Doctor he loves real estate. He constant tells me we would give up his Medical Degree if they would just wipe out his student loan and just consider his 8 years in school a waste of time.. Of course they won't do that..  Currently he works 1 day a week in the ER and the rest in Real Estate.

Good Luck

It is a different answer for everyone.  Everyone has different goals, personality traits, abilities, investment opportunities etc.  You would want to make a 5 year plan and see how it fits in. 

Hi @Logan Jorns ,

Welcome to the community.  I have an engineering degree from NIU, Go Huskies! I started a Masters in Aerospace program and asked the same question you are.  I ultimately decided it was not the career trajectory I wanted and found another position in which I could purse my passion for design.

I would ask you the following questions.

1. What would you do if you didn't have to work?  Pursue a passion

2. What is the degree in and your projected Salary?  Pharm.D is very good salary.

3. Analyze the debt and salary much like any other investment.  What is payback period?  Opportunity cost.  Have you looked into PSLF Loan Forgiveness?

4. How flexible is your job schedule?

5. Could you attain the same degree at a lesser cost?  Community college?

Ultimately I feel you are in the right headspace by asking such questions.

It's up to you to do the math and calculate your ROI and ROPS (Return on Personal Satisfaction).

Keep at it!

@Logan Jorns - Proud of you for not following the sheep and thinking about what is best for your future.  Sadly, I think too many people blindly go into debt for degrees without much thought because that is expected of them.  Oh, wait - that was me. :)

If you already have three years in, I'm guessing you could finishing up a  degree without too much more time. I'm sure you aren't far from a Chem or Bio degree since you are on the PharmD track?  Might be faster to finish than a business degree.

Also find any way to CLEP out of classes or get credit for your experiences (lots of colleges are doing that now).   My husband graduated in 5 semesters while running our businesses because of those options.

If you hadn't already invested so much time/money, I'd say don't bother with it, but since you can graduate relatively quickly and work at the same time, I'd suggest just finishing it up.  If you ever want to work for someone else (especially a large company), a bachelor's degree is the first thing they'd require for applicants. 

Message me if you have any other questions!

@Logan Jorns if you already know what you want to do, sounds like you do, and have the discipline to self-learn, then college is a waste of time for you.

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