Engineering Degree and Real Estate

Multi-Family and Apartment Investing
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Engineering Degree and Real Estate

Arta Montero
Member since 2019 · 182 posts · 45 votes

For those of you that have an engineering degree I am wondering what was your progression from engineering to real estate and if you still continue with your W-2 job or transitioned partially or completely away from W-2 job or engineering

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John Todderud
Investor · Renton, WA · Member since 2013 · 10 posts · 14 votes
5y

That's a great skill to apply to real estate. You have analytical and problem solving skills, both required. Be aware, though, of engineers' tendency to over analyze. You'll never know everything and there's a point where you decide you know enough, then take action. Also engineers tend to be introverts and you need to meet and partner with others, but everyone can learn to network.

Engineering taught you to do several things at once. When working your W2 job, find time in your day to research markets, take multifamily investing classes, call brokers, underwrite properties. Don't be in a rush to quit your job, just find 10-20 more hours in the week for real estate. Don't wait forever to buy a property as you'll learn more from that than any classes. Unless you have an experienced mentor or partner, keep your first properties small so your mistakes don't break you. 

This has been my progression, from my background in computer science. What I battle, and I think this may be common with people who have studied hard, got a good job, and make decent money, is risk aversion. I have huge respect for people who didn't have much, took risks, and found success. 

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  • John Todderud
    Investor · Renton, WA · Member since 2013 · 10 posts · 14 votes
    5y

    That's a great skill to apply to real estate. You have analytical and problem solving skills, both required. Be aware, though, of engineers' tendency to over analyze. You'll never know everything and there's a point where you decide you know enough, then take action. Also engineers tend to be introverts and you need to meet and partner with others, but everyone can learn to network.

    Engineering taught you to do several things at once. When working your W2 job, find time in your day to research markets, take multifamily investing classes, call brokers, underwrite properties. Don't be in a rush to quit your job, just find 10-20 more hours in the week for real estate. Don't wait forever to buy a property as you'll learn more from that than any classes. Unless you have an experienced mentor or partner, keep your first properties small so your mistakes don't break you. 

    This has been my progression, from my background in computer science. What I battle, and I think this may be common with people who have studied hard, got a good job, and make decent money, is risk aversion. I have huge respect for people who didn't have much, took risks, and found success. 

    5Reply
  • Jeffrey Allen
    Rental Property Investor · Dillsburg, PA · Member since 2020 · 23 posts · 14 votes
    5y

    Sounds like really good advice.  I am an Engineer and I definitely tend to over analyze or want to know everything before jumping in.  However, I broke through that and purchased my first place and now have partnered for a larger multi-family deal while still working my full-time engineering job.  I am a little atypical for an engineer when it comes to being an introvert as I like to talk and to all people. :)   It will be nice in a few years to transition out of the engineering job eventually.

    1Reply
  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    5y

    Most people gradually transition. The 'burn the ships' concept is sexy and all, but snowballing works perfectly well, too. Long term, consistent action with a proven strategy produces results.

    As for myself I have a Bachelors in Chemical Engineering and I stand behind that decision.

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  • Rick MartinPro Member
    Rental Property Investor · Redondo Beach, CA · Member since 2017 · 411 posts · 477 votes
    5y

    @Arta Montero I have a brother who is an electrical engineer, and he flat-out won't look at a deal that I bring to him, because he just cannot release that control. He definitely falls into the analytical category. I see a lot of engineers jumping into the multifamily syndication space either to invest passively as a Limited Partner and/or eventually actively as a General Partner. As mentioned by the others, that analytically side pairs perfectly with analyzing the numbers as long as you don't suffer from paralysis of analysis. Engineer salaries generally enable them to both qualify and afford to invest passively into syndications. They earn as they learn, and then make the leap into taking on a more active role(or not). If you are looking to escape your job, eventually taking on an active role will get you to your goal quicker. If you are looking to build income streams, and take advantage of the tax advantages of real estate, going passive is definitely a nice option. As long as you are willing to give up the control of running a deal.

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  • Arta Montero
    OP
    Member since 2019 · 182 posts · 45 votes
    5y

    Thank you Rick. Wondering if you can comment more as to what you mean by “ taking an active role mean”


    thanks!

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  • Adam Lacey
    Investor · Castle Rock, CO · Member since 2018 · 297 posts · 159 votes
    5y

     @Arta Montero I'm an engineer transitioning into a career in real estate investing myself. There are many ways to do it, but my approach (which wasn't necessarily my original plan) has been to invest passively in syndications while I network, educate myself and get to know other operators. I am now moving over to the GP side after partnering with some operators that I met at a local meetup. I am still working my engineering job, but hope to be out of that by the end of 2021. It is a lot of work to get a real estate business going on the side, but I enjoy it and think it will be well worth it in the long run. Feel free to reach out if you want to discuss. Good luck on your journey.

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  • Arta Montero
    OP
    Member since 2019 · 182 posts · 45 votes
    5y

    @John Todderud thank you John. Are you still working via W-2 then in the area of study?

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  • Arta Montero
    OP
    Member since 2019 · 182 posts · 45 votes
    5y

    @Jeffrey Allen wow, that’s amazing that you planning to transition. Do you think you will be able to replace engineering salary by then? Wondering how long you been working on engineering?

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  • Arta Montero
    OP
    Member since 2019 · 182 posts · 45 votes
    5y

    @Taylor L. Same here chemical engineer

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  • Arta Montero
    OP
    Member since 2019 · 182 posts · 45 votes
    5y

    @Adam Lacey yes, can we please talk in person. Would love to learn more about you path so far

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  • Jeffrey Allen
    Rental Property Investor · Dillsburg, PA · Member since 2020 · 23 posts · 14 votes
    5y

    @Arta Montero - I have been a structural engineer since 1996 (graduated WVU) and got my PE in 2000 when I had enough experience to sit for the test. I think if I continue down this path I should be able to replace my entire engineering salary in 5 years or less. I have one SFH (townhouse) that I self manage. One syndication deal that I am in that is pretty neat to see and this new 52-unit apartment complex we will be closing on early next year. Will let that deal settle a little as it has a good bit of work and then look to acquire some more Multi-family with my partner on this venture.

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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y

    @Arta Montero

    I am a Chemical Engineer myself. 

    You can transition into Real Estate in a lot of ways. You need to have some cash reserve/emergency funds and be comfortable with your decisions to quit your W-2.

    Also make sure you truly love Real Estate Investing and not just for the money just incase things did not work out well for your for the first 3-months, only your passion for Real Estate will keep you above average Real Estate Investors.

    Goodluck and reach out if you want to chat.

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  • Dustin Beam
    Kansas City, MO · Member since 2015 · 609 posts · 321 votes
    5y

    I invested for 3 years as a full time engineer and went part time after that (30 hrs/wk). Did that for another year and quit entirely last summer. 

    1Reply
  • Arta Montero
    OP
    Member since 2019 · 182 posts · 45 votes
    5y

    @Wale Lawal are you still working via w-2 in engineering?

    0Reply
  • Arta Montero
    OP
    Member since 2019 · 182 posts · 45 votes
    5y

    @Dustin Beam wow, you only worked for 4 years. That’s great. Wondering if you don’t mind me asking what did you do to be able to make the transition and what are you doing now instead of engineering

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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y

    @Arta Montero

    Yes.

    [email protected]832-776-9582Podcast Guest on Show #469
    NETWORTH BUILDERS5236 Reviews
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  • Rick MartinPro Member
    Rental Property Investor · Redondo Beach, CA · Member since 2017 · 411 posts · 477 votes
    5y

    @Arta Montero anything where you will be taking on an active role. That can mean doing your own buy and holds, flips, or BRRRS. It can also mean becoming a member of the General Partnership as opposed to the Limited Partnership. The limited partners invest their own capital passively, and get their returns via cash flow and profits at the sale (or refinance), while the General Partners operate the deal. The GP's earn their income via acquisition fees, asset management fees, net cash flows, and dispositions. Keep in mind that "active," is a time commitment, so investing passively while you get educated in whatever you are investing in is a good strategy. 

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  • Dustin Beam
    Kansas City, MO · Member since 2015 · 609 posts · 321 votes
    5y
    Originally posted by @Arta Montero:

    @Dustin Beam wow, you only worked for 4 years. That’s great. Wondering if you don’t mind me asking what did you do to be able to make the transition and what are you doing now instead of engineering

     Oh, I probably worded my previous post poorly haha. I was an engineer for longer than 4 years, about 12 years total. I started RE investing in 2016. So I worked full time as an engineer and an investor for 3 years. Then for 1 year I worked part time as an engineer while I continued to invest. Then finally I quit being an engineer. Hope that makes more sense! :D 

    Now, I'm still figuring that out. I partnered on a couple house flips, but otherwise still working through how my life will go. Time will tell!

    0Reply
  • Danny RandazzoPro Member
    Apartment Syndicator · Charleston, SC · Member since 2016 · 973 posts · 728 votes
    5y

    @Arta Montero I’ve documented my transition from financial consultant to professional full time investor. Message me if you’d like more details as I’ve recorded some webinars on the topic

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  • Arta Montero
    OP
    Member since 2019 · 182 posts · 45 votes
    5y

    @Rick Martin thank you!

    0Reply
  • Arta Montero
    OP
    Member since 2019 · 182 posts · 45 votes
    5y

    @Dustin Beam that’s good. Hope it goes well. I feel that engineering jobs are very demanding.

    0Reply
  • Arta Montero
    OP
    Member since 2019 · 182 posts · 45 votes
    5y

    @Danny Randazzo thank you. I do have the link I believe and started listening.

    0Reply
  • Daniel Doan
    Member since 2020 · 2 posts · 0 votes
    5y

    Hi All, First post on the forums, just joined as a pro member.

    @Dustin Beam how has it been for you financially after the full move over.  

    Things are starting to ramp up.  We bought our first home last year, and I am soon starting on my first investment property.  Also an Engineer, but want to see if down the line, we can make this work as a full time investor.
     

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  • Dustin Beam
    Kansas City, MO · Member since 2015 · 609 posts · 321 votes
    5y
    Originally posted by @Daniel Doan:

    Hi All, First post on the forums, just joined as a pro member.

    @Dustin Beam how has it been for you financially after the full move over.  

    Things are starting to ramp up.  We bought our first home last year, and I am soon starting on my first investment property.  Also an Engineer, but want to see if down the line, we can make this work as a full time investor.
     

     Financially, it's been fine but I didn't quit my W2 until I had replaced my income. Some might say I should have kept working, but I had come to despise my work life. It was an emotional /psychological decision, not a financial one. On the flip side, I did better with some flips than I would have if I kept working. I wouldn't have done the flips if I was working a job, so new opportunities presented themselves because I wasn't working. 

    Can I repeat that? I don't know. The hardest part for me is trying to decide which direction to point my ship. I have extended dead periods between purchases due to either lack of deal flow or lack of capital. So I need to decide what to do to either build capital, increase deal flow, or both. Something to consider for yourself if you don't already have those answers. 

    1Reply
  • Adam Lacey
    Investor · Castle Rock, CO · Member since 2018 · 297 posts · 159 votes
    5y
    You've probably considered this, but...if you can increase your deal flow but still lack capital, you could consider wholesaling the ones you can't afford to take down. I'm sure your market is full of investors looking for multifamily properties below retail.

    Originally posted by @Dustin Beam:
    Originally posted by @Daniel Doan:

    Hi All, First post on the forums, just joined as a pro member.

    @Dustin Beam how has it been for you financially after the full move over.  

    Things are starting to ramp up.  We bought our first home last year, and I am soon starting on my first investment property.  Also an Engineer, but want to see if down the line, we can make this work as a full time investor.
     

     Financially, it's been fine but I didn't quit my W2 until I had replaced my income. Some might say I should have kept working, but I had come to despise my work life. It was an emotional /psychological decision, not a financial one. On the flip side, I did better with some flips than I would have if I kept working. I wouldn't have done the flips if I was working a job, so new opportunities presented themselves because I wasn't working. 

    Can I repeat that? I don't know. The hardest part for me is trying to decide which direction to point my ship. I have extended dead periods between purchases due to either lack of deal flow or lack of capital. So I need to decide what to do to either build capital, increase deal flow, or both. Something to consider for yourself if you don't already have those answers. 

    0Reply
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