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

235 Replies

Thanks for sharing your story. Believe it or not, I am virtually at the same cross-road that you were at 18-months ago! Now I have always wanted to leave my W-2 job for something that I would really want to do in life for a career. Last few weeks were especially challenging and pushed me even more to rethink my career. But I just thought, "here we go again" thinking about doing something I like and not following through because of all he fears and uncertainty that occupies my mind! Then suddenly out of nowhere, this week an opportunity pops up that is very enticing and would be one of the best ways to get full time into REI !! Will I do it still? I really don't know. I will have to think real hard. Give up my ready/steady source of very good income for something that I have always dreamed of? The risk is I have more than my mouth to feed!! On the other hand, the opportunity is very good with very good cash flow!! But I am not sure how much stability the RE market will have going forward for the next few years and how successful will I be? My W-2 job, with good benefits, is virtually guaranteed for a very long time; while at the same time the job feels as if I am just counting my days, even though I believe I have thousands of days left to live!!! Yes I know it all sounds crazy and am sorry to respond to your post with such a long and loaded reply!! But your post made me wonder if all of a sudden all the stars have started to up for me to finally see the light and make that leap of faith! I don't know we'll see. To everyone who may be in the same situation as I am in, I wish you the best. Even more so to Julie and her family.

Julie, your story is so inspiring to me! I’ll be moving from the Northeast to the Southwest in about 18 months and plan to start my venture when I get there. Liquidating what I have here, in the meantime. Congratulations and please keep us posted on your progress!!

@Julie Kern Congratulations on what you have accomplished already and having the ability to think and adjust what you were doing to get back to your original goal.  I agree with the others that you will will definitiely reach our 50  unit goal in 2019.  Many people set goals but are unwilling to put the work in to achieve their goals, but not you.  You are well on your way to reaching your dream.  Over the past 6 months I have served as a general partner and Key princple with a group that has aquired over 50 units in the Greensboro, NC market.  Keep dreaming BIG. Keep Reaching Far. Catch Your Dream.  

@Julie Kern

Your story is VERY inspiring to me. I’ve been going through analysis paralysis and definitely been overloaded with info. Your goals are very similar to mine and I have so much respect for that. The detail you’ve put into explaining your position is very well thought out and realistic, it gives me context for my goals. Thank you for sharing!

Congrats on the move and great goals. I have big goals myself. Just gotta find the time to get to them. Still young enough I hope to get there. Do have a couple multi family 3 plex and a retail with 3 apartments above it. 4 young children and own a pharmacy so very busy. But someday hopefully get rid of the money draining pharmacy and get more real estate!! 

@Mike Quin The first week after I left my job, I was like "wow, this is amazing!". The second week, I thought "what the heck have I done??".  And after that, it slowly became the new normal, but I love it!

@Troy M. Thanks! And not at this point.  I'm focusing on MF because it's the most familiar, coming from single family, and I guess would be considered a logical next step.

@Jeff Carter @Account Closed Sounds like you have a clear picture of where you want to go from here. Best wishes to you - hit me up when you've got the first multi-family under your belt!

@Guy Jean @Ajit Alkondon Thank you both!!

@Alex Staunton - Wow, it does sound like we're on similar paths.  Your cash flow numbers sound great - congrats and keep me posted on your progress!

@Kristine Mier - Thanks!  And staying focused is one of the hardest things... I constantly remind myself "He (or she) who chases  2 rabbits catches none."   Sometimes it's tough to discern "opportunity" from "shiny object".  At least for me.  Best wishes to you!

@Nina Granberry Just make sure the numbers are solid and you have good reserves!  Hope it works out for you!

 @Brendan Harrelson - Thanks so much!

@Cody L. - Wow, 1400 units!  Would love to chat with you sometime - so impressive!

@Bo Wagner @Gerax Sotelo  @Gerri Koch Appreciate it - I'll certainly update periodically.  

@Sri Kand Best thing I can recommend is get an accountability partner and speak out loud and write down your (time-specific) goals.  There is much power in both.  You can do it - sometimes our mindsets and limiting beliefs are the biggest obstacles.

@Vance Baker We used our own funds for flipping.  Although 2 of my flips would have still done pretty well with HM loans, just not as well.  We've always been super conservative, and also blessed with strong incomes so we've saved enough to fund our own deals.  Deals in general are not easy to come by these days, whether single or multi-family, but they are out there.  How are you sourcing deals? Are they all on-market or are you looking off-market also?

@Bob Brissie It does sound like we have similar approaches.  Best wishes on that 25+ unit multi - let me know when you buy it!  And my best friend from college was from Plano :)

@Eric Williams Having a great partners and a supportive spouse are huge advantages - and thanks for the encouraging words!

@Launce L. Well thank you so much!  Yes, I felt like I was missing a body part for a while after quitting.  I didn't hate my job at all - it was an incredible blessing for many many years, awesome co-workers, I worked from home and it allowed us to build capital, along with a nice sized 401K that I rolled into a Solo 401K and now use to invest in real estate.  But it was time to move on, and I'm so glad I did!

@Timothy Young Thank you!! Wishing you and your wife great success on your journey!

@Wale Ehinmidu @James Jones @Rosa Alpuche @Pamela Johnson @Brian Trent @Jackie Hall @Charles A Munk Thanks to each of you for the positive words and well wishes!

@Somit Joe Good question...  are your SFRs in a more desirable area where you're able to attract higher quality tenants who want to stay longer?  I guess there are so many variables it would be hard to say without knowing more, but in theory, it seems your 8plex would have lower vacancy due to a distribution over 8 units. Do you manage yourself or have a PM?

@Dominick Albano - Thank you sir, and focus is my biggest challenge and highest priority for sure!

@Andrea Cole @Janice Reynolds Thank you both!!

This is a great post, very impressive 18 months and awesome 2019 goals! I am also thinking of selling my SFR property to focus on Multi-property, which I've gotten a taste of in El Salvador where I have 2 MFP with 4 and 6 units respectively and are running a mix of income, 50% conventional rentals and 50% via AirBnB.

Can't wait for your follow up and pointers as this is something I'll chase hard for my 2019 year, so best of luck for you!

Originally posted by @Julie Kern :

@Guy Jean @Ajit Alkondon Thank you both!!

@Alex Staunton - Wow, it does sound like we're on similar paths.  Your cash flow numbers sound great - congrats and keep me posted on your progress!

@Kristine Mier - Thanks!  And staying focused is one of the hardest things... I constantly remind myself "He (or she) who chases  2 rabbits catches none."   Sometimes it's tough to discern "opportunity" from "shiny object".  At least for me.  Best wishes to you!

@Nina Granberry Just make sure the numbers are solid and you have good reserves!  Hope it works out for you!

 @Brendan Harrelson - Thanks so much!

@Cody L. - Wow, 1400 units!  Would love to chat with you sometime - so impressive!

@Bo Wagner @Gerax Sotelo  @Gerri Koch Appreciate it - I'll certainly update periodically.  

@Sri Kand Best thing I can recommend is get an accountability partner and speak out loud and write down your (time-specific) goals.  There is much power in both.  You can do it - sometimes our mindsets and limiting beliefs are the biggest obstacles.

Not super impressive when you consider I've been doing it for 12 years now.  A little over 100 units a year which isn't that hard to achieve esp once you get going.  I bet in 12 years you have more than that. 

@Julie Kern So, you didn’t disclose the volume of funds at risk, needed to deploy, to net your 100k on the flips.   400, 500, 600k?  I estimate 100K of borrowed funds to cost 10K of profit/yr and per 100K

I have a couple realtors that bring me on and off market properties to evaluate.   One flips as well and has 5 current projects so I have to be very careful when evaluating those. Around here if it’s on market it gets bid up above my margins....I often wonder how many people are loosing their behinds trying to rehab a property....and I always take note of the partially rehabbed properties that are scheduled for foreclosure. Aside from that I monitor online auctions and analyze properties scheduled for foreclosure across 3 counties.  Interesting that at the courthouse steps, often the margin leaves no equity for the buyer that intends to rent it, flip it, or reside there.....aside from the bank purchases. 

Cheers, Vance

@Julie Kern So, you didn’t disclose the volume of funds at risk, needed to deploy, to net your 100k on the flips.   400, 500, 600k?  I estimate 100K of borrowed funds to cost 10K of profit/yr and per 100K

I have a couple realtors that bring me on and off market properties to evaluate.   One flips as well and has 5 current projects so I have to be very careful when evaluating those. Around here if it’s on market it gets bid up above my margins....I often wonder how many people are loosing their behinds trying to rehab a property....and I always take note of the partially rehabbed properties that are scheduled for foreclosure. Aside from that I monitor online auctions and analyze properties scheduled for foreclosure across 3 counties.  Interesting that at the courthouse steps, often the margin leaves no equity for the buyer that intends to rent it, flip it, or reside there.....aside from the bank purchases. 

Cheers, Vance

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 :)

 Love it! Thanks for sharing!

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