Which Career Path Will Lead You to Your Goals Faster

8 Replies

Hey Bigger Pockets Community,

I'm currently being faced with an interesting dilemma and wanted some input. I work an OK 9-5 office job at the moment and have been presented with a few options. I've had an offer of another, better paying office job, and an offer of an equal paying contractor job.

I'm curious which one you all think would help propel me to my end goal faster. That goal being a full time buy and hold/BRRRR investor. I'm new to the biz, having only done 1 deal so far.

Does it make more sense to go after making more money to buy more properties faster? Or is it better to earn the same for now and learn the skills to put to use in rehabbing projects down the line? There is also potential to earn more money with the contractor position as my skills increase.

For easy numbers lets say I make 50k/yr at the desk job. The higher paying desk job is offering 70k and the contractor job is matching the 50k.

A few questions to clarify:

1. Is the contractor job salaried (It sounds like you are using the term "contractor" to mean an actual contractor who runs a job site, as opposed to an individual who works on a "contract" basis)? Or is that $50k an estimate of what you may earn based on who good business is? Essentially, how stable is the income for the contractor position?

2. Do you currently have a large cash position or assets to borrow against (is your current rental mortgaged?) for down payments? If you take the contractor job and it has unstable income, it will be very hard to get a loan

3. What is your ultimate goal? Do you ultimately want to be responsible for any rehab/maintenance work associated with your rentals, or do you want a "hands-off" passive portfolio? There's no reason to sacrifice extra money from the $70k job to learn skills you don't ultimately want to use. Instead, use the acquisition process to form relationships with other contractors who already know what they're doing to hire someday to do that work for you

This is a complicated question but either way nobody is quitting a stable job!... If the higher paying position has good benefits, flexible hours, and health insurance I'd go for it. There's no way around the fact you'll be doing real estate investing on the side (at least for a few years). It means long days, finding deals, contractor negotiations, screening tenants, and property management. 

For some people it's a hobby and few years down the road they give up on it. No shame in that. 

It's hard to argue with good benefits. Currently real estate is part time, but i'm eager to make this full time as quickly as possible. There will be no giving up on my end :) 

Thanks for your input @Jaron Walling , it definitely helps having a second opinion on this type of thing.

@Megan Hirlehey

Contractor job is salaried, but from my understanding it's consistent work. I couldn't guarantee that, but that's how the offer sounded. It would be as a worker bee learning trade skills and such.

No to the large cash reserves. that right there might be good enough reason to call it.

I'd like to be hands off down the line so I agree with the idea of why learn skills you won't use, however my thought was it might be good to know the actual cost of doing each project so i can better negotiate contractors with the experience of having done it myself in the past.

Originally posted by @Dylan Rogers :

@Megan Hirlehey

Contractor job is salaried, but from my understanding it's consistent work. I couldn't guarantee that, but that's how the offer sounded. It would be as a worker bee learning trade skills and such.

No to the large cash reserves. that right there might be good enough reason to call it.

I'd like to be hands off down the line so I agree with the idea of why learn skills you won't use, however my thought was it might be good to know the actual cost of doing each project so i can better negotiate contractors with the experience of having done it myself in the past.

Having the foundational knowledge of reno work is a legit argument, I know because I do a lot of the work on my properties on my own. However at what cost? If you take the $50k contractor job and the income/work is not consistent, you will have a hard time financing which will stunt your progress. In addition you will have less cash available to build your portfolio with or cushion the inevitable unexpected expenses you'll encounter. So right off the bat, this is a riskier option. In addition, if the contractor job is a lateral move in the way of pay, then the assumption is that you can live on your current income, so if you were to take a higher paying job and do not increase your cost of living, you can funnel all of that extra money into your investments, which could catapult your investing activities forward at a rate much faster and with much more security than you can achieve with a lower paying job. Over time, you'll leanr things like negotiating and the going rates in your market by default anyway as you connect with and hire contractors. 

These are the things I would consider when making this decision - define your ultimate goal, then only say yes to the things that move you definitively toward that goal. In the world of investing, extra cash almost always wins that argument

 

@Megan Hirlehey

Thank you for you insight! I really appreciate it. You have completely valid arguments and a similar thought process to me. The increased income would definitely be a benefit by applying it straight to real estate.

Thanks again

@Dylan Rogers i couldn’t agree more with @Megan Hirlehey . Take all the pros and cons and monetize them over time, and you can see what would be a better option. Based on what you’ve said and the situations you’ve outlined, id go for the higher paying job to help accelerate your growth. There are a couple key factors to consider:

1) Getting loans: stable W2 income means that finding loans shouldn’t be an issue. You’re also making more money, so you’re all around a more attractive customer. Unstable income = difficult loans = higher prices. You have less money to spend from your job, but it costs you more and also takes more of your time.

Advantage-W2

2) Time with hands on experience: getting a job as a contractor doing the type of work you’d be doing on your home would obviously help you gain a lot of experience. The questions become-at what cost ($ and time) and to what benefit? And how much do you plan to do yourself? You wouldn’t give up a great paying opportunity to get a job at Valvoline to learn how to change your oil or rotate your tires.

Advantage-technically contractor, but not convinced

3) Overall time and risk: with the higher paying job, time seems to be the biggest constraint. You’ll be working nights and weekends on your projects to do them yourself. Tons of people do that, so that shouldn’t be a problem. Additionally, you have the added cushion of the additional income to lessen your risk. If you don’t have time to complete a project on time, you can probably afford to pay to get it wrapped up. If you hate the work, you can do the same.

Advantage-W2

Don’t rush into it. Build a solid foundation for yourself and don’t do something foolish. Would you rather build your business on a few match sticks held together with hopes and dreams? Or on solid concrete poured over a little more time?

Either way, good luck to you!