Jeff Nash
Accountant · McKinney, TX · Member since 2023 · 394 posts · 580 votes
3y
I am not speaking from direct experience necessarily but observation of many others, but if you are doing well and think you can continue to have success just make sure you have a safer reserve or something you can tap into if you experience a lull. I don’t know your situation but would be happy to chat. I can tell you it’s very exciting when you become your own boss but at the same time there are no guarantees so time management and effective use of your time is critical. Good luck!
2 Reply
Randy Rodenhouse
Investor · Charleston, SC · Member since 2011 · 606 posts · 413 votes
3y
In my opinion, I think you need a longer track record in order to definitively determine whether to quit your job or not. Just because you did a deal or two and made your W-2 income doesn't mean you get to do that consistently in the future. I would need more info like were these fix and flip deals, rentals, or what? It sounds like the second deal has not been even purchased yet.
3 Reply
Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Quote from @Kyler J Sloan:

Has anyone quit their job after just one or two deals?

After the second one I have in mind, my net income will equal my W2.

Just curious. I am tempted.
(I posted this in the STR discussion because I doubt this has occurred in long-term except for those investing in commercial properties)

Lol, NO, of course not, get 5 xs your income than think about it. Also residual income is the key. Flipping is a job,
9 Reply
Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
3y
Keep the W-2, it'll accelerate building your portfolio. What if 2 major issues come up on both properties and they are not making income for 1-2 months? If it was me I would use W-2 to live off and keep real estate separate.
2 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
I quit my job before my first deal. It is all situational and relative to what you have on the line. I believe being able to replace your 9-to-5 time with real estate will help you grow exponentially.
0 Reply
Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
3y
It all depends on what your job is.
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1 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3y
Quote from @Bob S.:

Quote from @Kyler J Sloan:

Has anyone quit their job after just one or two deals?

After the second one I have in mind, my net income will equal my W2.

Just curious. I am tempted.

(I posted this in the STR discussion because I doubt this has occurred in long-term except for those investing in commercial properties)

Lol, NO, of course not, get 5 xs your income than think about it. Also residual income is the key. Flipping is a job,

Exactly this^^^^^
2 Reply
Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Kyler J Sloan
Depends
If You make Min wage in your w2 is very different if you are a corporate executive
Honestly I see far too many quit early and not have reserves or consistent income and end up broke or having to go back to work
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4 Reply
Andrew SteffensBusiness Member
Tampa, FL · Member since 2022 · 4k+ posts · 3k+ votes
3y
I think you should do it for several years before making a career change. Build some equity, build up cashflow, get more experience etc before making such a jump. Also as mentioned above W2 income can really help you get a start in real estate.
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0 Reply
Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
Hey @Kyler J Sloan. It is a fun thing to ponder. Personally, I wouldn't do it. If the W2 gig isn't taxing and you can do both, that is what I would do.
I would wait until I had a nice bundle of cash and a bunch of performing properties.
4 Reply
John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
I built up passive income that surpassed my W2 before I quit.
That way I'm not dependent on the next flip.
5 Reply
Luka Milicevic
Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
3y
I did not after a few successes. 2 good deals is not proof of concept. Maybe you got lucky, I don't know.
Lenders like W2 income and if your job is not getting in the way of your investing then you should keep it until it gets in the way.
I'd also recommend 3 years of returns showing your RE income before quitting your job.
Having a job is not the worst thing in the world like Robert Kiyosaki makes it out to be. It's a stable form of income that lenders like to see.
3 Reply
Zach Oehlman
Investor · Nationwide · Member since 2019 · 30 posts · 37 votes
3y
Congrats on all your success @Kyler J Sloan!
I quit my job way to early because I wanted the freedom...or what I thought was freedom :)
What I realized was it was way easier to do real estate when you have a W2 job with income as the banks like that way more than the business / selp employed model...expecially when you first start off and don't have a track record.
One of the biggest mistakes I see people make is that they don't have any active income and rely solely on the rental income and the rental income is just enough for them to live on.
This creates a lot of risk becuase if a major expense comes up it will deplete any cash reserves or you will have to put it on a credit card which increases your expenses and can turn positive cash flow into negative cash flow.
I think a couple things you need to look at are:
1). What is your earning potential in your job and does it exceed the earning potential in real estate in the short term. In the long term real estate will out perfrom any job but you have to gain the skill sets to get that earning potential and it is a process
2). What are your cash reserves and what are you going to do for active income going forward? If you have merely replaced your W2 you are now at break even and won't be able to build wealth as fast as if you were net positive cash flow. Having positive cash flow to reivest back into your wealth will accelerate the wealth building process.
3). What are your goals and is your job really that bad? I have had some really great jobs with bad people so I moved to a different company in the short term while I worked on my business. I personally don't think anyone has an idea of how hard it is to make it in the business world until you have done it. The vision of "freedom" and "work for yourself" is an illusion for most in the short term and is only realized after a lot of struggle. Learn as much as you can in a job and build a position of wealth up before you make the leap...ask me how I now :)
Again, congrats on all of the success!
1 Reply
Kyler J Sloan
OP
Investor · Maggie Valley, NC · Member since 2020 · 284 posts · 85 votes
3y
Thanks for the feedback.

I think I will keep it for a while, and I understand why most need to be cautioned to do the same. The decision of many to quit is so often impulsive -- they do it with a view to short term relief and pleasure (i.e. to "sit on a beach", which sounds horrific to me). At the same time, there are a minority of investors who ought to be encouraged in the opposite direction.

So many dig their heels, first in their job, and later in their real estate actives, forgetting that they got into real estate, not just to quit their job, but in order to engage in other more productive and fulfilling things. After decades spent in the workforce and in real estate, they simply create another job for themselves, unable to do anything else, and forget all the potential they left unrealized. They think they are "working for themselves", when in truth they are working for the state, operating within an incentive structure established by others to do what it cannot: build and maintain public housing. Once they have an impressive portfolio, it takes everything they have to maintain it, and they are reduced to maintenance men for their own systems -- tools for their own devices.

I wish more investors would speak to another problem: not only when to quit your job, but when to shift your gaze away from real estate. At a certain point, further assets cease to serve you, and you ultimately serve them. After you are making a million a year, if you naturally tend to live modestly, what will another thousand a month do for you?

Real estate cannot be the "end-all", or else it is simply another "rat race".

Forgive the rant.

4 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Kyler J Sloan:

Has anyone quit their job after just one or two deals?

After the second one I have in mind, my net income will equal my W2.

Just curious. I am tempted.
(I posted this in the STR discussion because I doubt this has occurred in long-term except for those investing in commercial properties)

yes if you are over 69
0 Reply
Leslie Anne Morris
Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
3y
I was ready to quit my W2 job after 18 months. But didn’t quit until I hit 3 years. I also created two other businesses so that I wasn’t just living off of my portfolio. Do whatever feels the best for you.
1 Reply
Zach Oehlman
Investor · Nationwide · Member since 2019 · 30 posts · 37 votes
3y
Quote from @Kyler J Sloan:

Thanks for the feedback.

I think I will keep it for a while, and I understand why most need to be cautioned to do the same. The decision of many to quit is so often impulsive -- they do it with a view to short term relief and pleasure (i.e. to "sit on a beach", which sounds horrific to me). At the same time, there are a minority of investors who ought to be encouraged in the opposite direction.

So many dig their heels, first in their job, and later in their real estate actives, forgetting that they got into real estate, not just to quit their job, but in order to engage in other more productive and fulfilling things. After decades spent in the workforce and in real estate, they simply create another job for themselves, unable to do anything else, and forget all the potential they left unrealized. They think they are "working for themselves", when in truth they are working for the state, operating within an incentive structure established by others to do what it cannot: build and maintain public housing. Once they have an impressive portfolio, it takes everything they have to maintain it, and they are reduced to maintenance men for their own systems -- tools for their own devices.

I wish more investors would speak to another problem: not only when to quit your job, but when to shift your gaze away from real estate. At a certain point, further assets cease to serve you, and you ultimately serve them. After you are making a million a year, if you naturally tend to live modestly, what will another thousand a month do for you?

Real estate cannot be the "end-all", or else it is simply another "rat race".

Forgive the rant.

I love this rant!

And it is spot on :)

Real estate is simply a means to an end...not the end.

For me the "end" is giving back to others and I do that with the time and money investing / business development has afforded me.
2 Reply
Jason Nguyen
Real Estate Agent · Fairfax, VA · Member since 2019 · 79 posts · 68 votes
3y
You need cash flow to quit your job. You may make some money on 1-2 deals but if you accidentally pick up a bad apple, it can potentially wipes out all the profit that you have made on your first two deals. Build passive income not active income. Use active income on a down payment to purchase assets that generate passive income while appreciate over time.
0 Reply
Mario I Fernandez
Miami Beach, FL · Member since 2019 · 124 posts · 48 votes
3y
Before quitting I will make sure to have at least 6 months in reserve to cover all your expenses.
0 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Zach Oehlman:

Quote from @Kyler J Sloan:

Thanks for the feedback.
Real estate is simply a means to an end...not the end.

For me the "end" is giving back to others and I do that with the time and money investing / business development has afforded me.

BP has full of fantasy question, wanna quit working after 1-2 deals, quit working after one buy rental, does not want to college,etc,etc.

It's sometimes very mind disturbing and not too motivating.
0 Reply
Jill Addison
Rental Property Investor · San Diego, CA · Member since 2019 · 48 posts · 40 votes
3y
@Kyler J Sloan here's my story with that...I owned my own business for 12 years. I got really burned out for the last 2 years and wanted to sell it really bad, but I knew I needed another income stream before I walked away. I got on a tear and bought 7 long term rentals in less than a year. (Plus I already owned one from before, so 8 total.) On paper it looked like I could cover all my personal living expenses with my passive income. And I had just about used up my 10 Fannie and Freddie loans, and knew I was going to qualify for another 7 using my husband's income, so I was safe there. So I sold my business. The numbers turned out just like I planned for the first 4 months. But then I had a flood of cap ex expenses that just kept coming. I ended up just about breaking even for the first year. Luckily I had a big pile of cash from the sale of my business, but it's too bad I had to use some of that to basically cover living expenses while I went cash flow negative for about 5 months. :( I bought another 2 properties and thought I was finally getting to where I'd be covering my living expenses easily, but then property tax increases kicked in for several properties and knocked my cash flow back down to where I had been before those last 2 buys. So now I'm at the point where I really need to keep moving forward with my real estate buys since I'm really only halfway to my passive income goal (which is twice my living expenses). Even though I can see it wasn't the best decision to jump ship on my business with what I discovered was insufficient cushion in my monthly cash flow numbers, honestly, I'm still glad I sold my business when I did. I was so ready to be free of it. I can still make it work, but my advice is: if you're not hating your job, stick with it, because it will make your wealth building much easier and faster and more stress-free. Also, you have way more options for lending when you have proven income.
0 Reply
Nick Hill
Clearwater, FL · Member since 2014 · 10 posts · 7 votes
3y
I quit my job (sold first business) before my first deal. It really just depends on your confidence, personality type and risk tolerance. For me, it was not a question if I would succeed or not. Others my not be as confident in their abilities at first.
0 Reply
Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
3y
I mean. How much money do you make at your job? lol.

I quit my "job" at 84 doors.
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2 Reply
Ray Hage
Investor · Fort Lauderdale, FL · Member since 2020 · 1k+ posts · 755 votes
3y
You got two options: the safe boring way and the high risk exciting way

Safe and boring: Keep your current W-2, do a bunch of deals so that you have experience and buy and hold properties to have a decent amount of passive income. You can be sure you won't go broke or go into bad debt

Risky and exciting: quit your job and jump in full time to flips building up your capital and invest in properties that make you a nice passive income. You can make great money but you can also go broke if you get into a couple of bad deals early.

I chose the safe path and don't regret it. I think most people would choose the safer path but we all have our lives and tolerances for risk. Think long and hard about it before making a decision.
0 Reply
Nick Gober-Keller
Member since 2022 · 31 posts · 36 votes
3y
I think it depends on many things....What are the 1-2 deals? What is your income compared to your mortgage and other expenses (assuming you have a mortgage)? What are the properties in the deal? Sure, it can be done. But I believe it is fair to say it is pretty improbable.
However, here is an example of that working. I know of an older couple (late 60s, early 70s) who essentially did what you are suggesting. One deal they purchased was a 4 unit apartment building, 2 bedrooms (and therefore tenants) per unit. They cash flow $5500 off this as they have no mortgage and had enough money to buy the property outright. It is in a college town so there are plenty of potential tenants and the unit is almost never empty.
Their second deal was in another neighboring college town, a townhome with 3 bedrooms. They cash flow $1500 a month on this one because again, no mortgage.

The could gained the money to purchase these properties outright with no mortgage due to an inheritance from one of their parents passing away. Now the couple can live comfortably in their retirement off the $7k that is coming in every month.
You can see how unique this situation is, but my point with sharing it is it can be done. Keep working and researching and you can achieve financial freedom. Might take more than 1-2 deals, but you will get there if you keep at it :)
1 Reply

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