Growing Capitol. What would you do?

25 Replies

Hey everyone!  

I want to share the position I am in with you all to get a good idea of what your advice/opinions on the matter are.  Currently, I have a job paying in the low $20's/year and I love it, however it is a grant position and it has only been funded for one year.  I took the job because I knew I would love the experience, but the pay does make it hard to raise capitol to invest.

My goal is to invest in a rental property that I will house hack located in some markets in Central Florida.  I want to become FI by growing my cash flow via rental properties.  I could go more in depth on my goals, but I want to keep it general for now.  The issue that I am having to work with is that I also have another business I am building up.  I know this business/market and have had success already with it.  It is also one of my main "WHY's" for wanting to become FI.  I want to be the best I can be at the business and work on it without having to have a "job".  In order to grow my personal business, I would need to grow a lot of capitol for it, which would take away from the savings for investing in real estate.  Being that I don't make a lot of money as it is for the time being, what advice would you give on the allocation of savings to invest with?

I want to invest in real estate, but I know it would take some time to get the cash flow I am looking for. If I focused more on my business, I could see profits and good ROI within a year or two. Should I stick with one investment, or should I save as much as I can while putting away money for both? Any advice would be greatly appreciated! Regardless of what happens, I will invest in real estate and continue to educate myself on it.

It's best to focus when you can. It's hard enough to have a day job plus one side hustle, let alone two side hustles. There's nothing wrong with buying the right property when you can, so long as you can invest fairly passively, i.e. with property management and folks who can take tasks off your hands.

Real estate is a great investment on the side for early retirement, particularly if you earn a good income via other sources

Look to join a team that does syndications. You can get in for less and learn a lot. What could you bring them value wise? If you have a skill or expertise they are looking for they may invite you in. 

@Nate Marshall Thanks for your input!  That has definitely crossed my mind and I will explore that option more as I continue to grow my network.  It would definitely help in my situation, but I would have to figure out exactly what I would bring to the table.

@Robert Kirkley Sometime's its finding deals. Sometime's its talking to investors. A lot of roles in a syndication. One prominent syndication company has a really strong marketing guru who builds funnels and does a lot of social media promotion. 

@Nate Marshall Those a great points.  I could definitely help out with social media/building networks and relationships.  I'll have to dive deeper into that.  I currently know a few investors who are involved in syndications and other people who like to invest, so that may be something to look into as well.

Listen to Cal Newport Podcast from BP. I think you can manage both with proper focus. Not really clear on your question to be honest. Only you can determine your financials and time best spent. I say go for both and you will know in due time.

Thanks @Noel R. I will give that podcast another listen. I am sorry if the question wasn't clear.  It was hard to put what I am thinking into words, but I will continue to save for either in the time being in case there is a good investment I find.  

Robert, what do you love about the job?

Any reason to think it needs to be your job more than 1 year? Like attending a great university to study what you love. The goal is to graduate and move on. That could be how you shape the job. 

While there are things you can do as a side hustle, it could be smarter to maximize what you can learn now and then move on to something which helps you move towards FI.

@Robert Kirkley

1) Focus on one big thing at a time.

2) If you know for a fact that you can expect big profits via another business you started then concentrate on it now to get to such point. Educate yourself on RE fundamentals in the meantime.

3) Once the profits are made you can invest in real estate AND continue making profits in your business.

Best of luck!

@John Corey It's my dream job. I really wanted to experience it, but I knew after this year I would need to find something that pays more. I am in the field I went to school for, but I am also looking for jobs in other fields and in REI as well. Good point on learning! That is exactly what I am trying to do. I am increasing my responsibilities and trying to be as valuable as possible to the company as well. This path alone will not get me to FI, but if I can learn how to see potential and add value to a company, I can use that skill to benefit me later on. As far as saving for investing goes, that is another story! lol. Thanks for your advice!

@Alina Trigub Thanks! Honestly, that is what I have been thinking in the back of my mind. If I can spend this time to educate myself on REI while growing my business, it may work in my favor as I may have the financing come easier when I am ready to invest. Still, I will try to work on being creative with the financing part if I find a property that works. That was really helpful and good to hear someone who shares the same opinion. Thank you!

My pleasure to help! If you're having hard time concentrating, read "one thing" by Gary Keller.

Originally posted by @Robert Kirkley :

@Alina Trigub Thanks! Honestly, that is what I have been thinking in the back of my mind. If I can spend this time to educate myself on REI while growing my business, it may work in my favor as I may have the financing come easier when I am ready to invest. Still, I will try to work on being creative with the financing part if I find a property that works. That was really helpful and good to hear someone who shares the same opinion. Thank you!

i would start by using the correct spelling.

Capital - finance, money.

Capitol - the building where our good for nothing politicians meet to plot our demise.

@Robert Kirkley

Splitting hairs on my part, but my point is you can’t unsee things.

It reminded me of a resume I received years ago. The guys name was Brian. His resume said “Brain”. I disagreed with his mistaken self assessment. Guess where that resume went?

@Robert Kirkley Which do you want to have, a real estate business or the other business you referred to that you're creating? Based on your post, I'd say you want to have your other business, so focus your attention and capital on that. When your business is up and running and turning out surplus cash flow, stash that away into an account to fund real estate investment. Continue to focus on your business, but take an "always shopping" approach to real estate so you can pounce when you spot a deal.

Real estate can speed you on to FI, but it doesn't need to be (and isn't) a full time business for most investors. Instead it's a vehicle where you can park your excess cash from your W-2 or business, but the first step is to create that excess cash. The secret to FI is to mind the gap (see Afford Anything: https://affordanything.com/the-most-crucial-money-lesson-in-three-words-mind-the-gap/). Keep your expenses low, grow your income, and invest the difference.

@Robert Kirkley

I agree with everyone on the concept of focus, but that does not mean you cannot househack and build your other business at the same time. Househacking is a great idea for anyone that wants FI...even if u are not doing other real estate investing. You have to live somewhere so why not keep your housing expenses as low as Possible. Since u live at the property it is pretty easy to manage and can get your feet wet if REI is something u want to do. I actually think house hacking goes great with starting a business as it allows u to lower your month expense and reduce your risk. My first three REI were househacks and I still own 2 of those today 20yrs later.

Good luck. I would only househack if u plan to live in the area for 5+ yrs.

@Mark Gauger Thanks for sharing that. The other business I am growing currently is my biggest passion, so you are correct. I am starting to really enjoy real estate, but it would be more of an investment that I would build to help me continue with the business I had started, as well as creating an FI future for myself and family. I will continue to look for deals I can house hack, but as many are saying, it seems that I need to focus on the business I know now. Really appreciate your opinion on this matter Mark!

@Randy Bloch I’m glad to hear most people are saying to focus on one business. Spreading myself too thin would make things a little more complicated and could potentially push my goals farther down the road than I would like. You bring up a great point in that house hacking is a perfect way to start a small business. My initial plan was to house hack a property so I will stick with that, but I can build my business while house hacking, as you said, and increase the capital I can use to invest back into both the business and in real estate. What types of properties did you house hack?

I house hacked 6br SF in college and then 2 duplexes after that.  When you house hack u need to decide how much of sacrifice to want to make with your personal life.  In general, to get a house hack that has the best returns might mean u are not necessary in the nicest neighborhood or if u go with 4plex u have more neighbors and more upkeep.  If look for a duplex in nice neighborhood or good school district it likely will not cover as much of your housing expense.  I am generalizing a bit as this is what I have seen in the markets I haves lived in... I am not familiar with your market.  So u will have decide how much u are willing to sacrifice and take into consideration significant other and children If u have them.