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

234 Replies

Congrats sister! Thanks for sharing! Very powerful...

I love this story. So inspiring. Congratulations to you and your husband. Wish you more success down the road!

@Julie Kern Great job so far and good luck! I'm interested in following your journey as I've just started on a really similar path. I'm in NJ so taxes are a killer but I picked up a 6 family by the beach a few months ago that brings in around $2,500/monthly cash flow and closing on an REO 2 bedroom condo that will cash flow around $600/month. I'm taking classes now towards getting my RE salesperson license to save money on my own deals and maybe do a little part-time agent work on the side. My goal is around $11,000 a month for me to go full time and another $8,000 for my wife to be able to take that option if she chooses. I figured I'd share as our goals are really similar but you've already been brave enough to quit your W2 and get after it full time!

Thanks for posting this! I love your whys and can so relate. I just bought my second single family home and hope to continue to grown through different methods as well. Currently exploring getting a real estate agent license but also worried about getting distracted with other things similarly. I will definitely keep tabs on you! 

thank you for sharing your story. I am thinking about acquiring my first property this week and am trying to make sure it’s the right decision. It’s a single family home in Kansas City. 

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 :)

Way to go.  I had a high 6 figure job before switching to multifamily.  Best decision I ever made.  That was 13 years ago and 1400 units later I couldn't ever see having a 'real job' again.

50 will come before you know it.  Then 100, then 500, then 1000 and so on.  Just never set a finish line.

Very cool to hear about a local success story!  Keep it up/keep us posted!  I have several other investors who left their 'day jobs' to invest full-time and I love to share in their successes!  

This is awesome! Congrats! Keep going! You're doing great!

i really need to make the plunge. Every year turns around I think I will start my first REI, and I am again stuck with this career(which pays well) but I cannot visualize doing this forever. I need to build that passive income when cash flow is awesome with both of us at prime of our earning age.

Julie, you are an inspiration to me! I look forward to hearing your good news very soon. 

Thanks Julie. Can you convey a monetary investment number that you used to flip for the past year to net 100K?  I’m familiar with the many variables but, contrary to the course advertising gurus, flipping houses to net near 100k in a year necessitates at least 400K of personal (non-borrowed) funds....in my experiences. Using hard money at prevailing rates would be a recipe for failure, again contrary to the “use my money at 15% “😮 private funding course marketers. 

I too have evaluated a handful of multi units but, always results in an offer that is far below asking and shunned, to attempt to cash flow with an 80/20 loan.

And Micheals (I believe) the article on the 1M net sale after the 7 years...bought with hard money with next to nothing in active rental income (that probably wouldn’t have covered the property taxes and insurance let alone the debt note and lofty private lender rates.  No wonder he lost his sleep and hair.  It’s a wonder he was able to control that investment. 

Greatly looking forward to your follow up! Thus far, our approaches have alot in common- My wife and I also have several SFR's (8). No flips, just buy and hold rentals. Looking to do a 25 unit plus multi. My current portfolio flows good cash, but not quite enough to take the retirement plunge. Hoping you meet your goal of $20-$30K per month. Would love to see you all get there!

Julie,

I'm in the same boat, but maybe not as much capital. But I have great partners and a great wife as my support system. Looking forward to seeing you crush it!!! Then I can get some of that knowledge from you. 

Very well written and organized. I appreciate this post! It definitely is very hard to take that leap and quit a comfortable six-fig W-2 job..

fantastic story!   I plan for my wife and I to be creating a similar journey in 2019!

Awesome write up, i'm amaze by the moves you made and i look forward to seeing your next write up. Very inspiring .

Congrats!  Go for it!

@Julie Kern

Wow! Thank you for sharing. I’m in the process of preparing to leave my w-2 by the end of this year as well. This post was very encouraging

Hi Julie and other Multi-family investors

Congrats on making money on Multi family over SFRs. Need your help to unravel a puzzle I have not been able to crack in ,y 8 yrs of REI.

I have 10 SFRs and 1 8plex. Compared to SFRs my 8Plex makes less money due to higher costs - higher interest rates, higher maintenance (due to quality of tenants) and higher vacancy. So I keep going back to SFR for higher cash flows

What I am missing here?

thanks

Congrats, looking forward to your update in the future. 

Congratulations.  Your story is very helpful and inspiring.

@Julie Kern  Thank you for sharing your journey.  It inspires me to THINK BIG and go for it!

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