Looking for some perspective on my situation

8 Replies

Alright so to start I want to give you some background. I have worked as a bartender for the last 8 years of my life. Paying off all debt and saving money. Recently became a real estate agent. Closed a deal in the first two months, not a relative. I want to segway out of the service industry but walking away from a 70,000 a year pay check has got me hesitant. I’m new to real estate and the wholesale market. I have amazing credit 825+ some savings, no debt, no kids and a track record of accomplishing goals that I set for myself. I would like to make real estate/investing a full time gig. I’m looking for advice of any kind. Where to start. How to start. How to make my credit score and savings work for me through investments. I’m not looking to get rich quick. I’m interested in playing the long game. Hints my job that I have been at for 8 years to get myself to this point. Thanks for any advice.

Originally posted by @Zachary Peek :

Alright so to start I want to give you some background. I have worked as a bartender for the last 8 years of my life. Paying off all debt and saving money. Recently became a real estate agent. Closed a deal in the first two months, not a relative. I want to segway out of the service industry but walking away from a 70,000 a year pay check has got me hesitant. I’m new to real estate and the wholesale market. I have amazing credit 825+ some savings, no debt, no kids and a track record of accomplishing goals that I set for myself. I would like to make real estate/investing a full time gig. I’m looking for advice of any kind. Where to start. How to start. How to make my credit score and savings work for me through investments. I’m not looking to get rich quick. I’m interested in playing the long game. Hints my job that I have been at for 8 years to get myself to this point. Thanks for any advice.

Hello Zachary,

Congrats on closing a deal so quickly! Most agents go 6-12 months before closing their first deal and that usually comes from a relative or friend... needless to say, you're off to a great start. Your savings and excellent credit will be huge assets for you as you take your next step.

One option that comes to mind is house-hacking. Using your income history from the last 2 years can help you qualify for a multi-family investment property that you can owner-occupy. The savings on your monthly living expenses (and/or cash flow from the rental units) will allow you to  leave your job with some piece of mind.

As far the segway is concerned, I worked for the City of NY for 8 years before diving into Real Estate full-time as an agent. I made sure to have about 6-months of expenses (aside from my savings acct.) before making the job. In addition, I had some deals under contract to insure that I would have some income in the coming months. Of course, a deal under contract does NOT mean that it is going to close. 

Being that you're looking to invest long-term, I would recommend finding a brokerage that aligns with your goals.

I know what this transition is like so feel free to reach out if you want to discuss further!

Best,

Abel


 

@Zachary Peek , hi and welcome.

You sound like a Go Getter.  Congrats on getting your license and a first sale!  That's a big boost to one's confidence.

Becoming an investor may take a little bit of time.  First concentrate on getting to a level of income that allows you a little breathing room so you're not worried about paying next month's bills.  I recommend you build up to a decent book of business as a salesperson first rather than trying to chase 3 cats that are going in different directions at the same time.  You're already chasing Buyers and Sellers.  INVESTORS are a whole different breed.

I'm not saying you can't take the opportunity if it presents itself, but focused intensity is powerful.  Look at how 10,000 flashlights shining on a thin board won't do anything except illuminate it, but if you FOCUS the light into a laser you can cut a hole thru inch thick sheet metal.  Focused effort does the same thing.

Take this first 12-18 months and learn your business inside and out.  Study the lingo.  Learn to pull comps and compute values.  Get comfy talking to people about deals worth hundreds of thousands of $$$.  It'll open your eyes to people's motives and how to "read" their body language.

Then as you build up some more money and knowledge, buy yourself a nice little duplex or a few "cheap" houses.  I say "cheap" because that is relative.  In my area, cheap is $30,000 or less for a move-in ready house.  In some markets, it's $200,000+ for a dilapidated shack.  Learn the ropes of land lording without investing too much the first time.  It's better to find out if you like land lording first before sinking millions of $$$ into it.

Land lording is real estate investing 101.  Most "investors" rely on buy and hold land + lording strategy for at large part of their income.  Developers, flippers, and wholesalers aren't really investors: they're business owners, and it takes a whole different set of skills to run those kinds of businesses while at the same time trying to be a Real Estate salesperson.  

Land lording skills will serve you well, because eventually if you get to be a big time investor, you'll likely be renting out houses, duplexes and apartments, etc.  The cash flow from RENT is where investors make their money while they wait on speculative returns like appreciation, either forced or market driven.  No rent or insufficient rent = broke real estate investor.  Good rents = wealthy investor!

Good luck!

I would go talk to the high end Commercial brokerages and see what it would take to get in the door..  If I were able to do life over that is what I would do. :)
good luck!  you sound like you will accomplish everything you believe you can accomplish! 

@Zachary Peek sounds like you should go all in on the RE agent side for a while. Closing a deal in the first 2 months is good for a new agent. You should build on that momentum and double down on that as the market is red hot right now and RE agent business is booming. You can make very high six figures in the right markets these days. That will allow you to bank some serious cash and invest it along the way.

Originally posted by @Mary Mitchell :

I would go talk to the high end Commercial brokerages and see what it would take to get in the door..  If I were able to do life over that is what I would do. :)
good luck!  you sound like you will accomplish everything you believe you can accomplish!

Good advice you have to apprentice but you put 10 years in the commercial arena and work in a major metro area were price points allow for larger commissions.. and at some point your set for life..  I rented an office in 04 in Beaverton and the young agent working for Norris Beggs and simpson made a fee to lease it to us.. and I think he found me one more.. he worked his way up.. to now he is senior vice president of financing for NBS  I ran into him at PDX recently on his way for an upper level meeting in NYC  with the big wigs.. wearing a nice suit lookin sharp.. really proud of how he has grown .. not that i had anything to do with it.. but thats what commercial brokerage can do for you.

Plus i sold one 5 mil apartment once.. cash ed a 100k commish check i bet i did not put more than 20 to 25 hours into that deal..  its a great gig really is. 

My wife does resi and has for years and she consistently sells 10 to 15 mil a year. All on referral . Thats where this business gets good you do it right and you should be doing most of your business on referral and repeats after a decade..  and then if you want to invest or buy some rentals along the line you certainly can.. 

 

I second the @Mary Mitchell advice. 

This is not as simple as- fall off the turnip truck with some money, buy something on the MLS, profit. I know there's a zillion posters who will say "I buy my deals off the MLS, blah, blah, blah".

MLS prices are retail prices. You need to find out how to make your own deals to get good ones, and professional experience sounds like a good way to do that.

Originally posted by @Abel Curiel :
Originally posted by @Zachary Peek:

Alright so to start I want to give you some background. I have worked as a bartender for the last 8 years of my life. Paying off all debt and saving money. Recently became a real estate agent. Closed a deal in the first two months, not a relative. I want to segway out of the service industry but walking away from a 70,000 a year pay check has got me hesitant. I’m new to real estate and the wholesale market. I have amazing credit 825+ some savings, no debt, no kids and a track record of accomplishing goals that I set for myself. I would like to make real estate/investing a full time gig. I’m looking for advice of any kind. Where to start. How to start. How to make my credit score and savings work for me through investments. I’m not looking to get rich quick. I’m interested in playing the long game. Hints my job that I have been at for 8 years to get myself to this point. Thanks for any advice.

Hello Zachary,

Congrats on closing a deal so quickly! Most agents go 6-12 months before closing their first deal and that usually comes from a relative or friend... needless to say, you're off to a great start. Your savings and excellent credit will be huge assets for you as you take your next step.

One option that comes to mind is house-hacking. Using your income history from the last 2 years can help you qualify for a multi-family investment property that you can owner-occupy. The savings on your monthly living expenses (and/or cash flow from the rental units) will allow you to  leave your job with some piece of mind.

As far the segway is concerned, I worked for the City of NY for 8 years before diving into Real Estate full-time as an agent. I made sure to have about 6-months of expenses (aside from my savings acct.) before making the job. In addition, I had some deals under contract to insure that I would have some income in the coming months. Of course, a deal under contract does NOT mean that it is going to close. 

Being that you're looking to invest long-term, I would recommend finding a brokerage that aligns with your goals.

I know what this transition is like so feel free to reach out if you want to discuss further!

Best,

Abel

 the problem is going to be that his income, while well above the national average, comes from bartending, which means tips and irregular hours, and a transient career. might be more difficult to get a loan...

 

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