Full time agent part time investor... Help!
Hi guys,
I'm looking for some feedback here on my situation in a nutshell.. I'm a full-time agent by happenstance because I got my license to aid my investment business in order to view my own properties and utilize the MLS for data mainly.
Fast forward two years I'm crushing it as a full-time agent as I decided my 9-5 job sucked and I love the freedom I now have been able to obtain through the new occupation.
However, my dream is to still be a full time investor and purchase rental properties to ultimately overtake my income and provide wealth and cash flow into the future.
My question is how do I balance not having a "steady" income and saving money to invest?
I had no issues saving money when I knew exactly what my pay would be.
There's a sort of catch 22 here with my situation anyone else in similar boat? How did you overcome or are you also stuck?
Hey @Chris Pasternak. 23 years old and an agent in SoCal, similar sales numbers as you (and identical passive income goal as you), been licensed for 5 years now, so I have a bit of advice despite not being 30 years+ in the business.
First off, nothing works unless you live below your means. It's exciting to do well in RE sales, but it also can come and go unexpectedly from time to time, especially when you're newer.
#1 Rule of playing the investing game is to not get taken out of the game. Before you start saving too much to invest, make sure you already have emergency money put away so that you never get taken out of the game. 6 months of living expenses socked away out of sight is a healthy amount.
Once you have that (and not sooner), you've probably heard this already, but pay yourself first. Put 10%-20% or more of every check into an opportunity account. If you're living within your means, that should be doable. I try to put every dang dollar I can into my Opportunity Fund (RE investing money.)
Lastly, make sure to put aside at least 5% of each check into what I call a Funmergency Fund. Cheesy name notwithstanding, it's really important for me to be able top have a chunk of money put away for fun expenses that make me zero money, but bring me joy.
If you want "steady" income, buy some rental property that cash flows after expenses. I make much more from rents than I do from commission. You are crushing it as an agent, which means you are making money. Save a specific percentage of your income for the sole purpose of investing it in real estate later. The sooner you buy cash flowing assets, the sooner your income will stabilize and it won't matter how many closings you have each month.
Nick,
Thank you I appreciate your feedback. That's awesome you're 23 and crushing it! Do you have any units? I totally agree with the approach on where to put the money. I am going back through finances now and getting this on track.
Anthony,
Thanks for the feedback! How did you approach financing to obtain these units?
@Anthony Dooley such good advice, and exactly the path I'm trying to take as an agent.
@Chris Pasternak My first few single family purchases were cash buys that were listed on the MLS as Fannie Mae foreclosures. For the price of a Toyota Camry and renovation costs, the returns are over 20%. I used the cash flow to buy other properties, but the fastest way is to buy out landlords who want to retire. You can buy a portfolio with tenants from a landlord using a commercial loan.
Originally posted by @Chris Pasternak:
Nick,
Thank you I appreciate your feedback. That's awesome you're 23 and crushing it! Do you have any units? I totally agree with the approach on where to put the money. I am going back through finances now and getting this on track.
Anthony,
Thanks for the feedback! How did you approach financing to obtain these units?
Just bought my first one last year, an SFR in my hometown. Good for you and good luck!