Left my W-2 job for Full-Time Real Estate 18 months ago today...

234 Replies

Hey B-Peeps! Wanted to do a quick update after leaving my W-2 job 18 months ago today, with some reflections on what those 18 months have looked like and where I'm headed from here.

Quick background: I got started in REI a little over 4 years ago with one SFR rental in Kennesaw, GA (Cobb County, northwest Metro Atlanta). I still have that one, along with 7 others for a total of 8. My original reason for getting into real estate investing was to build a portfolio that would cash flow from now into retirement (vs. continuing to throw money at a 401K and hope for the best, which was basically my "plan" prior to real estate).

In August 2017, I left my full-time job ( of almost 20 yrs, multiple 6-figures) because I couldn't see myself sitting in front of a computer for another 20 years, withering on the vine (pretty sure that's the phrase I used with my husband every other day in the last few months before I quit ;) ).  

My plan was to do a few flips a year to supplement my husband's income and work on creating more cash flow through SFR rentals. As I was making moves to leave my job, friends that we were already lending to for their flipping business approached me about starting a wholesaling business, so that's what we did.

I bought a couple of properties in 2018 through that business and flipped them - one went great, one was a financial disaster (didn't lose money but didn't make much) but I sold it to my daughter and son-in-law and they love it, so it worked out. I also flipped one more I found outside the business and did a few JV's with my partners, so total net (pre-tax) income from flipping (not counting the wholesaling business) for 2018 was around $100K. The wholesaling business did ok also, but I can't give exact #'s until my taxes are done!

Now notice what I did NOT mention in all of this.  We didn't acquire a single rental property.  Not one, even though I had access to deals through my business.  I got completely focused on running the wholesaling business and doing TRANSACTIONS that I completely moved away from building that cash flow that was the whole reason I got into real estate in the first place.

So... at the end of 2018, my husband and I did a serious evaluation of the past 12-18 months and decided to get back to our REI roots. What does that look like?

  1. The wholesaling business is being phased out.  I was working my tail off in a business I didn't really like that much anyway, and I wasn't building wealth, I was doing transactions.  Once that decision was made at the end of 2018, I felt a huge sense of relief.  It had become my whole focus - I had effectively landed myself in another job that was a lot more work than my former one and didn't pay as well!
  2. I'll only do flips if they are light to moderate rehabs and the numbers make them a no-brainer, but I won't be aggressively looking for deals.
  3. No more SFR buy and holds. While it is certainly possible to build wealth and create cash flow with SFRs, my time frame is too short (see 4 below) to accomplish what I need to in the SFR space.
  4. So all of this led to the next logical step... multi-family investing.  My goal is to retire my husband in 4 years (he loves his job, but in the event he doesn't in 4 years, he'll have the option to leave if he wants to).  That's my why, along with being able to give freely and be a blessing to others, both financially and with our time, out of extreme gratitude for the countless ways God has chosen to bless us.  

To accomplish this goal, we'll need net cash flow of $20K/mo, but would ideally be at $30K/mo.  For 2019, our goal is to acquire at least 50 units.  In a perfect world, that's a single property (apartment, mobile home park or self-storage facility), but could be spread across 2-4 properties.  I just prefer less transactions, so the bigger the better!

My biggest advantages going forward are having a decent amount of capital to invest and knowing several folks already doing multi-family successfully who will be resources as we move through the process of identifying, evaluating, acquiring and operating multi-family properties.  

My current biggest disadvantage is battling the wrong mindset and limiting beliefs, but I'm overcoming that with education (books, podcasts and forums like BP), reaching out to brokers and lenders, marketing for off-market deals, and telling everyone I can what my goals are. Basically the same process I went through to buy that very first SFR rental property.

If you're still reading this... thanks for sticking with me!

Once I've hit that 50 units, I'll follow up with another post :)

@Julie Kern I love it! You are going to crush that 50 unit goal this year, I know it. 

Trust me, I know how easy it can be to stray from the wealth mindset to the transaction mindset without even realizing it, when wholesaling. There are so many moving parts and responsibilities. I love that you realized this in a relatively short amount of time, and got back on track with what’s most important to YOU and your Fam. 

I’m behind you on the multi fam plan, but am excited for your year, and look forward to hearing, and learning some from you in this niche once Casey and I are ready for apmts. 

Go get em!

CONGRATS!!!

@Scott Scheel and @Jay Helms Thanks so much guys!

@Parker Stiles Thanks so much for that!! I know you guys are killing it in your wholesale biz and building that capital to create even more l/t cash flow with your rentals!

@Julie Kern I love that you are throwing your goal out to the masses! If you put half as much effort into Multi as I have seen you put into wholesaling over the past 18 months you'll surpass 50 units in no time at all! Keep up the great work!

@Julie Kern That is awesome, congratulations! I'm confident that your renewed focus will get you to accomplishing that goal for you and your husband!

Thank you for sharing your story, which is very encouraging.

Congratulations on what sounds like a very successful 18 months!

Congratulations! Question: how did you decide to aim for $20k - $30k a month income?

@Julie Kern Julie, can I ask what your plans are for health care? I am assuming currently your husband is able to provide medical benefits through his work, but have you looked into any options of if he was to retire what you would do?

Or is him retiring retiring with benefits versus simply “quitting”?

Thanks, that’s always one of my big questions and I have 4 young children to consider.

Hi @Bryan S.  That’s a great question and something we’ll need to consider as the time nears for him to leave his job, but that’s so far off in the future I haven’t given it a lot of thought. I know several other investors with 2-4 kids who are on MediShare and are very happy with it, but I can’t speak to it myself. 

@Julie Kern congratulations!  Sounds like you're making some big changes!  Wishing you the best from Afghanistan!

@Julie Kern Congrats! Thanks for sharing your goals. Base on just reading this, it seems like you’re very driven and you would have no problems reaching it. Happy Investing!!

I have heard of medi-shares, I am nowhere close to leaving my W2 yet, I would love if I was. Just getting ahead of the game if you will.

Thanks for the reply and also congratulations, that’s awesome!

@Julie Kern that’s awesome Julie. Can I make a recommendation for a podcast that I think may help (if you haven’t heard it already)? Joe Fairless’ Best Real Estate Investing Advice Ever podcast has great advice for investors getting into multi family investing for the first time, from framing the right mind set to the technical aspects. I have found it’s a great educational tool!

Originally posted by @Julie Kern :

Hey B-Peeps! Wanted to do a quick update after leaving my W-2 job 18 months ago today, with some reflections on what those 18 months have looked like and where I'm headed from here.

Quick background: I got started in REI a little over 4 years ago with one SFR rental in Kennesaw, GA (Cobb County, northwest Metro Atlanta). I still have that one, along with 7 others for a total of 8. My original reason for getting into real estate investing was to build a portfolio that would cash flow from now into retirement (vs. continuing to throw money at a 401K and hope for the best, which was basically my "plan" prior to real estate).

In August 2017, I left my full-time job ( of almost 20 yrs, multiple 6-figures) because I couldn't see myself sitting in front of a computer for another 20 years, withering on the vine (pretty sure that's the phrase I used with my husband every other day in the last few months before I quit ;) ).  

My plan was to do a few flips a year to supplement my husband's income and work on creating more cash flow through SFR rentals. As I was making moves to leave my job, friends that we were already lending to for their flipping business approached me about starting a wholesaling business, so that's what we did.

I bought a couple of properties in 2018 through that business and flipped them - one went great, one was a financial disaster (didn't lose money but didn't make much) but I sold it to my daughter and son-in-law and they love it, so it worked out. I also flipped one more I found outside the business and did a few JV's with my partners, so total net (pre-tax) income from flipping (not counting the wholesaling business) for 2018 was around $100K. The wholesaling business did ok also, but I can't give exact #'s until my taxes are done!

Now notice what I did NOT mention in all of this.  We didn't acquire a single rental property.  Not one, even though I had access to deals through my business.  I got completely focused on running the wholesaling business and doing TRANSACTIONS that I completely moved away from building that cash flow that was the whole reason I got into real estate in the first place.

So... at the end of 2018, my husband and I did a serious evaluation of the past 12-18 months and decided to get back to our REI roots. What does that look like?

  1. The wholesaling business is being phased out.  I was working my tail off in a business I didn't really like that much anyway, and I wasn't building wealth, I was doing transactions.  Once that decision was made at the end of 2018, I felt a huge sense of relief.  It had become my whole focus - I had effectively landed myself in another job that was a lot more work than my former one and didn't pay as well!
  2. I'll only do flips if they are light to moderate rehabs and the numbers make them a no-brainer, but I won't be aggressively looking for deals.
  3. No more SFR buy and holds. While it is certainly possible to build wealth and create cash flow with SFRs, my time frame is too short (see 4 below) to accomplish what I need to in the SFR space.
  4. So all of this led to the next logical step... multi-family investing.  My goal is to retire my husband in 4 years (he loves his job, but in the event he doesn't in 4 years, he'll have the option to leave if he wants to).  That's my why, along with being able to give freely and be a blessing to others, both financially and with our time, out of extreme gratitude for the countless ways God has chosen to bless us.  

To accomplish this goal, we'll need net cash flow of $20K/mo, but would ideally be at $30K/mo.  For 2019, our goal is to acquire at least 50 units.  In a perfect world, that's a single property (apartment, mobile home park or self-storage facility), but could be spread across 2-4 properties.  I just prefer less transactions, so the bigger the better!

My biggest advantages going forward are having a decent amount of capital to invest and knowing several folks already doing multi-family successfully who will be resources as we move through the process of identifying, evaluating, acquiring and operating multi-family properties.  

My current biggest disadvantage is battling the wrong mindset and limiting beliefs, but I'm overcoming that with education (books, podcasts and forums like BP), reaching out to brokers and lenders, marketing for off-market deals, and telling everyone I can what my goals are. Basically the same process I went through to buy that very first SFR rental property.

If you're still reading this... thanks for sticking with me!

Once I've hit that 50 units, I'll follow up with another post :)

Hi Julie, congrats and getting to 50 units is not that hard. A big component is mindset and your belief level. I have acquired over 1,000 apartment units and I am not even that smart.

Here's a 48-unit building that I sold and made over $1M on.

I made so many mistakes in this deal it was embarrassing. But I still made money on it during the hold process and made a big chunk of money at exit. If I can do this, anyone can.

https://www.biggerpockets.com/forums/311/topics/64...

You sound like a wonderful team, you and the hubby. Nice work! Keep grinding and holding your mind accountable to those powerful goals. Good stuff.

Great story. Cant wait for the follow-up. Good Luck!!!

Thanks for the inspiring story.  All the best!

@Julie Kern Awesome! I saw your post in the Atlanta REI Meetup group saying you were looking to go into Multi-family. Hope you find a nice 50+ unit deal and can share with the group.

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