I have/had a w2 JOB. It's ok, I'm well paid and it provides for my family and is flexible to allow for time to deal with RE stuff too. Well Friday I got notified that they are changing my status from salary to hourly and I am to only work when I have billable work (I work in the consulting field). The last 6 months I haven't had much work and so it's not a total surprise but it still stings. I'm the last of a group that has slowly shrank to lonesome me via attrition over the past 2 years. We/I don't/didn't do the kind of work that is the core of the companies business so they won't miss us. Really it's just a gentle way of letting me go and in a way that they aren't on the hook for unemployment. This is not the first time it's happened to me. About 10 years ago I had the same thing happen. I was re-employed in 2.5 weeks so while it cost financially it was pretty much more of the same. This time there are more options. I'll use this post to chronicle the process as I'm sure there are others who will or who have faced the same dilemma.
Trying to keep the post shorter, I won't go into too many details. We have about 4-5 months of available reserves if I make no more money. We would then have to sell one of our properties with lots of equity that is just treading water which would allow us to carry on for another year or so, again assuming zero other income. I don't want to go backwards (spend cash) or sell property but will do what is needed.
I'm considering the following options.
1) Find another w2 job.
2) Offer consulting services in the same field as my w2 job. This requires a bit of self marketing. Things appear to be health job wise here in my field. I know a number of others who have been successful at this. I am all set up to do this from a legal standpoint. Logistically very straightforward.
3) Launch my services as an RE agent for sales. I am a licensed RE agent in my state. I have sold a number of properties over the years. I am set up for this from a legal standpoint as well.
4) Expand my services as a property manager. I currently manage properties for a number of people in addition to my own. I'm all set up for this legally as well.
5) Pursue fixing and flipping. I have done this with success a number of times. You do make your money when you buy and I bought well in all but one case, there I broke even.
6) Pursue wholesaling on a full time basis. I have begun a direct mail campaign and have had good response to my very low volume effort but have not done a deal yet.
7) Become a licensed contractor and do handyman work. I have been project manager on my fixups and my fix and flips so this is not a huge step but I have a long way to go setting up the legal aspect.
8) I could sell off a number of properties and pay off the debt on others and create enough cash flow to squeak by.
9) Some combination of all of the above.
Right now we are just in a holding pattern until we can get some feedback and council from others and see what perspective they offer. I hope to have direction by the end of the week. I am ramping up my direct mail campaign. I have a unique source of leads that seems very good and I am trying to figure out how to expand my list on a daily basis.
Tasks this week:
1) Meet with advisors.
2) Get an assistant to help expand my list for direct mail.
3) Make a decision about direction.
4) Keep perspective and balance by being there emotionally with my wife and family. I know I can do whatever I want but my tendency in the past is to put my head down and GO. Leaves those around me in the dust. This is a journey we are in together so need to keep perspective. I'm really scared too.
To chronicle this journey, I'm going to post at least once a week here with an update. Perhaps more if it seems necessary.
Hopefully we'll see a success story unfold.
Doesn't this provide you a great amount of freedom to become your own boss 24/7? To me the combination of consulting, flipping, RE sales and landlording seems almost unbeatable. Good luck with whatever you decide to do.
@Cal C. yes there is definitely potential there. I'm a bit leery of the whole combination approach but I'm definitely leaning toward the kissing my boss in the morning. It's my concern that I wouldn't really do any of it well and would end up slowly starving to death so to speak.
One thing I didn't mention is I think my decision would be predicated to some degree by what happened to your former co-workers. What are they doing now? Are they on their own, if so do they need a partner? With another company? Doing something else entirely? Unemployed?
@Bill S. - What a crossroads!! I'm interested in your direct mail success so far in Denver metro. I'll be first on your wholesale list for sure :-)
I agree. A great crossroads to be at indeed. Sometimes opportunity presents itself when we least expect it and in ways that don't seem the best at the time. Good Luck!
@Cal C. former co-workers are in another state. One is on permanent disability due to a stroke and the other went to another w2 job on his own. The last one moved to a different company office and changed the kind of work they do. I would have to go back about 8 years to find someone locally to team with. There is possibility there but there also has been significant time that has passed too.
You have a lot of great ideas. I am pretty sure you are eligible for unemployment. Don't panic, start looking for work right away or grow one of your businesses. Which business do you enjoy doing the most? Maintain your health insurance and also, you may be able to negotiate a nice severance package. I appreciate the way you intend to involve your family.
@Bill S. You're in a great position to make some stuff happen. I don't really envy the job situation you're in, that lack of knowing is always unsettling. The VERY good thing you have going for you as well though is that you've got a built in Plan "B" and "C" though just in case. I'm not a full time investor, so take what I say with a grain of salt, but here goes:
Milk your W2 job as long as you can (insurance, paycheck, etc..), take advantage of your extra time you'll now have on your hands (because I'm assuming over time isn't being doled out). Meanwhile, continue to nurture your property management business and figure out how you can automate to some extent. Have that be what "keeps the doors open" and the flipping what helps provide your inrush of money in the form of "bonuses", you might even talk the buyers into hiring you out as the property management company, and would be able to structure deals that way somehow. Wholesale anything you can't act on, but keep the marketing machine working.
It's a LOT, and it's scary, but I'm sure there are other people in your area that can probably help with moral support. I would also figure out how to automate what you can, even if it means having your wife or kids answer phones for you for a while. There are several people on this site that I've seen and talked to that were forced into doing real estate full time.
Whatever you decide to do, good luck and keep us posted!
@Anson Young I sent you a pm.
@Bill S. It is not a fun situation, but hopefully you will be able to turn this into a positive turning point. Good luck, whatever direction you decide upon!
@Bill S. Well it is definitely a crossroads, I am coming to the end of a career as well so I can relate. You seem like a man of many talents so I'm sure you'll be fine. For me, 1st thing is to not be over leveraged, so you are not stressing constantly waiting for the next money to come in. As deals are a little hard to come by on the MLS right now, maybe wholesaling to find some deals may be a good option. Finding deals gives you options. Since you have consulting skills it may be worth doing some self promotion to get some other streams of income, while you figure the other things out.
Bill, there is a lot of good advice here and you seem to be in a better position than most who have had their hours cut back or lost their job. One thing you really need to ask yourself is 'what are you passionate about?'
You have a lot of experience in RE, so I am assuming that you love doing deals. Are you afraid that pursuing this career will be too risky for your family? How does your wife feel about it (and does she have a W2 job as well to handle your insurance needs)? Is your W2 job one that you are also passionate about or would you rather get out of that business altogether? Life is too short to be stuck at a job you don't love!
I admire #4 on your task list - it is important to keep your family involved. Best of luck to you and your family!
Wow you got options, that's great.
I feel like I am in the same situation, kinda. It looks like I will be out a year from June. HUD properties are way way down.
Good luck to you on whatever way you decide to do.
I'm excited for you. You're a land-on-your-feet type of guy. This is just the middle of your success story.
@Bill S. I am sorry you are in an unsettling situation. When I launched into private practice it was very scary. I asked for help and advice from time to time and was amazed that everyone of those folks helped me. I never had had any shortage of work although I found my judgement lacking on what work I should have turned down. My salary actually increased, and when I went to go back into the government type job I had before I had to take a substantial cut in pay. kind of funny. I am sure I was partly lucky but I would have known within a few weeks if I could not make it.
As to your situation I think you have wonderful options. What ever you decide I am positive you will do fine. I have read many of your posts and found you to be knowledgeable, intelligent, and having great common sense. You are easily in the top 5% of the posters I see here in my opinion. Lots of folks want to help others on this site, but not all possess the same ability to do so intelligently. Good luck. I doubt I can be of any help but if I can please feel free to call me.
@Jerry W. and others, thanks for the encouraging words.
I'm in same situation. I have about a year. Im curious. Do you have any cash flowing properties that you can combine with your unemployment benefits to help slow down the burn on your savings? This can buy you more time to solidify your plan. Maybe even move into a smaller apartment and rent out your primary residence to lower overhead while your getting the ball rolling. Those are my plans. Its just me and my wife, so that would be easy. I'm 43 and thank god I never needed unemployment benefits that we ALL have paid into all our lives as W2'rs. I BETTER get my 99 weeks when the time comes for me to kick the can darn it!!!
BP newbie junkie.
@Chuck Holland welcome to BP bud. Sorry to hear about your bad news also. There is so much to learn. Post about your self to get the ball rolling. Be sure to read through the Learn section above it is loaded with great info. You can set key word alerts to topics or areas of interest, and of course engage on the forums.
Thanks. Working up the courage to get my bubble burst.
I got a year out so Im actively looking for another gig. Im sticking with W2 for time being while I increase my portfolio. I "think" my plan B is sound.
This is @Bill S. show. So let me back off.
Number 9 seems like the best option. Slowly start narrowing down your options based upon what is important to you. Is it: Money, free time, family time, REI, helping others.
As you figure out what your drive is, then you can better pursue a direction that offers more fulfillment.
@Bill S. figure out what you like doing and do it. Be the best at it. If it's the consulting field then pursue that with every bit of energy and vice versa. Everything else is just a "hobby". Always remember, you are much more than a job or career. Good luck!
It's been a week since my first post. Lots has happened and then again not much has changed. Still getting a check from my JOB. I have ramped up my direct mail. I am building my own list and have expanded it so that I'm adding something like 10-15 new mailings per day. As the list ages, I will recycle once a month. My goal is 50K mailings per year. Right now, I'm on target for about 30% of that. Need to figure out how to add more. I want to build my own list so hopefully have less competition.
Feeling very overwhelmed. Read up on marketing and direct mail and realized how little my current career prepared me for wholesaling.
Still trying to figure out what direction to go. Still working the direct mail since I will do that no mater which way things turn out.
My wife and I took our family away from the house for a overnight stay to clear our heads and discuss the future. I met with several people this past week to discuss what the future might hold. I'll try and find some time to post some thoughts on where things might go.
This week the goal is to try and meet with some more folks.
Just got 2 more notices from tenants that they are moving out at the end of May. Will have 4 leaving at the end of May. One is moving into one of the vacant units (moving up from 1 bd to house). I have 3 units to fill by the end of May on top of everything else. Not hard, just takes time and can be stressful.
Hopefully more later this week.
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