When did you know to go all in?

Question

Good morning!

Quick question: when did you know to take the plunge to go all in with your real estate investing from your normal job?

Thank you,

Grant

Marcus Auerbach · Answer

That is a very personal choice and will very much depend on your circumstances and preferences. The easy answer is when your passive income exceeds you active income. But when you get there you realize that you are about to kill 50% of your income - and that is really what's getting you ahead! Now you are in the gravey zone and you want to leave?

The other issue is that not having a job is pretty boring. I have tried it. What seems to happen for most people is they find a new job, something they really enjoy doing and that's maybe more flexible and allows time to accomodate REI.

I left my corporate job years after I had reached the financial exit point; the trigger was a "promotion" that would have required to spend have my life in India and China. When the board asked me, I was glad I had a perfect plan B.

Pat L. · Answer

Passive eclipses JOB income

happens faster than you realize

Michael Ablan · Answer

@Austin Grant McDowell - No one will know the answer to that but you. I'd get as much lined up ahead of time as possible though (partnerships, business plan, financing lined up, niche you want to pursue). I'd also make sure I have enough in my bank account to last me a year of grinding.

Also, be aware that your ability to qualify for conventional loans evaporates once you get that quit that job. That can make this a much harder game to get rolling

Also, be aware that your ability to qualify for conventional loans evaporates once you get that quit that job.  That can make this a much harder game to get rolling

Account Closed · Answer

When you have a deal that comes in front of you , and you got just enough to make it happen .... you go all in because that was your only choice :)

Heather H. · Answer

For some people, the answer is never. I have no interest in doing real estate as a career, although I love it as a hobby. REI a fun side project that helps me build wealth for my family while giving me the freedom to choose to work in a low-paid field that I absolutely love.

Jim Chuong · Answer

@Austin Grant McDowell My signal was the Great Financial Crisis. I’m Canadian and was unaffected. It was 2010 and the C$ was at parity to the US$ and RE prices had collapsed in the sunbelt by 50-70%, which made US RE extremely affordable for Canadian investors

My singular goal back then was to replace my annual salary with the equivalent in rental positive cash flow

Not only have rents and appreciation exploded since then, but the US$ is over 30% more valuable compared to the C$ then it was back then. And all my living expenses are in C$

Today I realize that I was thinking too small. I should have sought a bigger goal (eg. 10x my annual salary) because RE investing was very easy during the GFC

Jim Young · Answer

I agree with what's been said already regarding it being a personal question with no universal "right" answer.  Rather than asking yourself "am I ready?", I recommend you separate yourself from the equation and answer the question as if you were advising a colleague or younger sibling: What would you tell an imaginary advisee to have in place before they go all in (imagine they have the same business plan as you):

• Savings account size (measured in # months expenses it will cover)
• Emergency fund size
• Working capital to fund the business plan
• Knowledge level, in which areas of REI 
• Support system, network (or "tribe")
• Lender or investor relationships
•

Then turn the lens back on yourself.  Do you meet those criteria?  If so, go for it!  If not, make an action plan to close any gaps, THEN go for it!

Frank Wong · Answer

I don't think I would ever just go "all in" and focus on real estate investing. If I do it defeats the whole purpose of why I started it to begin with.  I want multiple streams of income and if I quit my day job then I basically picked up another job managing my portfolio. Each person is different and I still love what I do.  Only so much golf you can play a week. I tried doing that and it gets boring.

Jarrod Covey · Answer

I haven't taken the full plunge, just passively at this point. Nonetheless, I can share the story of one of my clients.

When we first met she was underwriting for a large national retailer. She decided to update her home in south Austin and soon after received an offer to buy it putting her in some nice profit. She flipped two more houses before taking the plunge and is now a full-time real estate agent/rehabber.

With so many avenues for income in real estate, it's just about staying active in the market in whatever way makes some income.

Sam L. · Answer

I'd say when ones cash flow can support ones basic income requirements. If you need 7k/month to stay a float, It wouldn't make sense to me to go "all in" if you're only making 3k/month.

When did you know to go all in?

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