Investor · Cedar Rapids, IA · Member since 2013 · 494 posts · 407 votes
BP brothers and sisters, I quit the last job I will ever have today to focus on RE investing. In 2003, while working in corporate America someone suggested Rich Dad Poor Dad to me. Eleven years and 28 properties later I'm finished with the rat race; I'm 50. I wanted to share this with the BP community because none of my working friends want to hear it.
Milwaukee, WI · Member since 2014 · 3 posts · 15 votes
11y
Congrats Dad!
Agree with @Chris Simmons You should expand on the story. It's been inspiring to watch and I'm sure others would appreciate it as well.
@Brandon Turner, although I am admittedly biased, I have been wanting to nominate my dad as a podcast candidate for some time. I can't think of a better 50th birthday and retirement present. Hilarious, down to earth, and sharp guy with a great story and unusual business model!
Investor · Cedar Rapids, IA · Member since 2013 · 494 posts · 407 votes
11y
@Samson Kay This is an easy one. I don't like having a job or boss but found them to be necessary evils until my cash flow was sufficient to quit. For the last couple of years I have been working from home for a very good company so I kept moving the financial goal posts because I wasn't miserable. A couple of things happened in the last few months including a lump sum pay out for a retirement from a company for whom I previously worked and I inherited a modest sum unexpectedly. This combined with my new boss giving me additional responsibilities (how dare he...) and the support of my wife prompted me to take the plunge. I was looking for any excuse to be honest with you. It wasn't just a financial decision, I'm passionate about RE and way over my previous career in aviation.
Investor · Chicago, IL · Member since 2013 · 227 posts · 31 votes
11y
Im in the same boat as you. I'm probably another year or so before I'm in a position to leave my job, but that is my end game. Good to see others are making it in real estate.
Do set goals, keep learning, network, etc. but get started if you haven't already. I wish I had gotten started ten or twenty years sooner. Buy solid properties in decent neighborhoods and screen your tenants well. Better an empty property than a bad tenant. Buying and holding is a long term strategy but it's amazing how it grows over time. Values go up, tenants pay down the mortgage, you refi, and keep buying.
Don't over analyze looking for the perfect deal. There are so many moving parts (variables) it will drive you crazy. Don't do what a friend did and buy as many crappy properties as quickly as possible. They have a high hassle factor and he sold most of them. Don't rent to family members or friends. It takes away your trump card... who wants to evict a sibling? There are books written about this details but keep you focus on the end goal.
The first deal turns theory into actual tenants, actual maintenance problems, etc. You have to start with the end in mind and don't sweat the small stuff and the inevitable inconveniences owning RE will bring. Hey, jobs are a hassle too and very time consuming in my experience.
Hope that helps and isn't trite advice. Feel to reach out to me anytime. I would be glad to help.
Glenn, THANK YOU for the wise words! There is a lot of value in what you say. Most of my goals are aligned with what you have done. However, I have a weakness in one area that you have mentioned.
"Don't over analyze looking for the perfect deal!"
I don't over analyze much, as I run my numbers pretty quick and decide on "yes" or "no". However, I am a sucker for great deals. There are a couple of reasons to this. The first is that I take it as a challenge. It is the game that creates excitement for me, esp if the outcome is a good one.
The problem is that with being a newbie, the outcome may not be a good one most times. That equates to lost time, money and energy. I am very aware of the fact that it is overall a losing game, but I have to work on my psychology on this.
Like you said in your post, "Buying and holding is a long term strategy...............focus on the end goal"
The second reason for trying to get good deals is that if you can get a 10-20% built in equity off the bat, it has the advantage of:
- taking a big part of the risk factor off the table
- built in equity that can be utilized as required
- better cash flow
There are a lot of people on BPs that say that "money is made on the front end in RE". I have not looked into the details of this, but it sounds like good logic.
On the other hand, I can see where you are coming from. If you end up paying market value (let's say an additional $30k), you may end up paying slightly more interest and monthly payments. The numbers in the long run tend to be significant. However, they are negligible on a monthly basis and it is better to have someone paying down that mortgage earlier than to have to wait for that perfect deal at a later time (and they are far and between).
I would love to hear what you have to say about the above. Feel free to start a new post or PM me as I do not want to interrupt this thread, that is here to celebrate your success and freedom.
Once again, CONGRATS and thank you for taking your time to answer my post.
Investor · Cedar Rapids, IA · Member since 2013 · 494 posts · 407 votes
11y
@Sam Alpha I think this thread is effectively over. I agree with what you are saying about getting a good deal and making money when you buy. If you know what an "average" deal looks like then pull the trigger on one that looks above average. You may not get the first property you offer on because if it looks good to you, you will probably have competition so start offering on properties that fit into your personal investment philosophy and meet your minimum financial requirements.
@Samson Kay This is an easy one. I don't like having a job or boss but found them to be necessary evils until my cash flow was sufficient to quit. For the last couple of years I have been working from home for a very good company so I kept moving the financial goal posts because I wasn't miserable. A couple of things happened in the last few months including a lump sum pay out for a retirement from a company for whom I previously worked and I inherited a modest sum unexpectedly. This combined with my new boss giving me additional responsibilities (how dare he...) and the support of my wife prompted me to take the plunge. I was looking for any excuse to be honest with you. It wasn't just a financial decision, I'm passionate about RE and way over my previous career in aviation.
I hear ya on that, Glenn!
The challenge for many of us seeking to replace our W2 income is coming into it with a serious financial deficit: bad or no credit, little or no savings (left after the crash, unemployment, divorce, health issues, etc. or any combination there of), sparse personal network, ...
Investor · Cedar Rapids, IA · Member since 2013 · 494 posts · 407 votes
11y
@Ilija Trkalovski Thanks. I sent you a colleague request since my son is in chicago and I invest in Davenport, you never know, there might be some overlap there.
Real Estate Investor · Acworth, GA · Member since 2015 · 1 post · 1 vote
11y
Hi Glenn, congratulations to you ! I just got laid off in Feb2015 from my job of eight years. Im not going back to work for the "man" again. Real estate investing is all that I ever wanted to do and NOW is the time to make it happen for me and my family. I too am inspired by your action. Thanks for sharing !
Investor · Cedar Rapids, IA · Member since 2013 · 494 posts · 407 votes
11y
@Roger Brooks Thanks Roger, let me know what I can do to help. The first time I was laid off it was traumatic because I my industry and the economy were in the toilet but more importantly, I didn't have enough cash flowing RE, second time.... not nearly as bad, and the third time it was my idea and I haven't lost a minute of sleep about my decision. Good luck!
You are inspiring to me because I currently work in the Aerospace industry. I've grown tired of moving and always on the lookout for the next job due to the instability in the industry. I'm hoping I can call it quits in another 4 years.
Residential Real Estate Broker · Riverside, CA · Member since 2014 · 82 posts · 121 votes
11y
@Glen McCrorey.. Congratulations. I did the same thing several years ago and I have never looked back since then. 400 houses later, I am now teaching others how to do it. Most people are not able to quit their jobs because they have too many expense. When you have no source of income, you need to be lean in terms of expenses because you don't know when the next paycheck is going to show up. Thats was how I survived my first few years.
Its okay to have a job, but for those of us who took the courage to strike out, we keep the American dream of entrepreneurship alive. I'll be rooting for you and anyone else who wants to make the move. If you need the support of other investors in terms of advice, I am here too. Just drop me a line or call me. Congratulations again. Have a beer on me.
Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
11y
Hi, Glenn,
Yes - I'm familiar with the Col Sanders story from a Tony Robbins cassette that was in a set I bought from Robert Allen. He also tells the story of Steven Spielberg: the ultimate "fake it 'til you make it"!
See, what I need is a way that people like me can "open the doors" without a sudden, unexpected windfall and without "pulling a rabbit out of a hat" - most of us don't even have a hat, much less a rabbit!