Share your story about leaving the rat race!
Member since 2020 · 6 posts · 0 votes
Hello Everyone! Currently looking for some motivation. Share what led you to leave the rat race. I currently will be keeping my job for the time being for mortgage approvals and W2 income, but would love to hear your experiences of climbing the corporate ladder and why it’s a better use of your time to buy real estate. Thank you!
Three reasons or paths:
A. How hungry are you? And yes I mean hungry. For food. Shelter. Better car. Provide now or in the future for you family.
B. How competitive are you?
C. How goal oriented are you? Don't like your situation at work? Keep it. This is your motivation. Lets say you get a different situation. Better pay, hours, future, management etc., less chance you will make the conversion.
Its all about you. My story doesn't matter.
Then it becomes a question of your Risk Aversion. Its why most people are always hourly or salary. Not worth the risk, and they are right for their situation. Safe in their current position and the goal isn't good enough.
Definitely keep your day job. But don't go for the home run. Build a trajectory, that matches your risk aversion and experience. Normally you say set a timetable, I wouldn't. Because its hard to measure when you will hit that point, your willing to take the plunge. Example:
1. Rent a 4 bedroom apartment and get the other 3 to pay for the whole rent. Or do a house.
2. Start building skill sets. Work weekends as an apartment manager, habitat for humanity, tag along with an investor doing BRRR/rehabs for free, etc. Whatever fits your end game or investment plans.
3. Start building a "Tool Kit". Make an outline of the "Tools" you need in the investment field you plan. Zoning maps, zoning regs, lawyer, accountants, electrician, drywall, plumbing, excavator, landscaper, wholesaler, realtors, inspectors, hard money, etc.
4. Define your investment type: Fix/Flip profit, passive income, etc. Geography.
5. Identify your Finance levels. Read my post on "Broad discussion on Financing. If you have $10,000; What is the collateralization % from the finance institution you plan to use. Example: SBA 10%, then you can do a $100,000 project. Traditional 25% you can do a $40,000 project. Etc. This helps you to spend less time looking at the caviar and more time looking at the soup, which is in your price range.
6. Define your financial success- COC, CAP rate, payback, return %, etc. Along with 5 above this will help you to focus better on the type of investments to do.
7. Once you have an outline of your toolkit and objectives, start talking with similar investors who are 5 years ahead of you. Don't do what they do. Do what you can do on your glide path.
8. Start crunching deals on paper. Over and over. Use templates from here or build your own as you make your mistakes and make your checklist and calc better each time.
$300, flatbed pickup, bag of clothes, box of books, new diploma, Magna Cum Laude, no job with 50 resumes out, in the middle of an Oil bust economy. Happiest day of my career. I was hungry and it was only up from there.
I started buying CRE one year out of college. Lived in a room I found on Craigslist for $350/mo. (all inclusive!), kept saving, living frugally. Eventually real estate + frugal lifestyle + saving led to purchasing businesses and more CRE. I was able to work my job and still operate 3 full time businesses (with decent incomes each) pretty effortlessly after I had spent a lot of effort to streamline their operations. On one hand it was too easy, I could just keep buying more and accruing more (to an extent). On the other hand, it was my environment that frustrated me. I didn't want to be boxed in. I wanted to explore, meet ambitious people, and scale further. I wasn't growing where I was. I took my last job offer knowing that it would be my last, and I set a date nearly 1 year out for when I would quit, and I did it. Career wise, I never compromised my growth. I could've kept going, and climbing.
Toughest pill to swallow was literally 6 days after I had resigned, while I was on a beach in Thailand, I got a job offer for 35% more, fully remote (very tough to come by pre-covid), sr. manager role which I had to turn down because it was against the principle of why I had quit my job. It wasn't the money, it was so I could release the mental reigns I felt like were on me to go to my potential with all of my entrepreneurial ventures & scale them. So one feedback I'd have on this is to think long term. Yes you will lose out on your W2 income stream for a while, but you are betting on yourself to make that up multiple times over with your RE or other activities.
I still think having a W2 has its positives, but once you have multiple (or even one strong one) other sources of income, and truly an entrepreneur that it just mentally drives you nuts being confined to a 9-5, then it's time to go.
Start with an actionable, quantifiable plan first, and execute.