Jumping in the Deep End (starting a business & quitting FT job)

7 Replies

Howdy everyone. I've been reading BP for a couple years now, and in January 2016, I started implementing my plan which has been a few years in the making. Thought some may enjoy to hear it, and as I am a relative newbie, maybe others wanting to get rolling will pick up an idea or spark for themselves by hearing my story.

Tomorrow is my last day at my full-time job, and Saturday morning I start focusing on my RE investing full time. I have not realized any revenue from my RE efforts thus far. Why would he do that? Before you call me stupid, hear me out. I have spent the last 5 years structuring my life for this moment. I got a job which would enable me to pay all my debts off (student loans, car loan, etc). Done. Then I took an opportunity which allowed me to save a significant amount of our pay (I am married) each month, and stacked this money for 4 years. Last year, we bought our primary residence with a large down payment and PITI payments that could easily be handled by my wife's salary alone. Obviously, we arranged things so her pay could take care of ALL of our living expenses and still have a few bucks left over. Cool. Then, I began my real estate company, formally, in January this year. Initially I will be rehabbing and flipping properties, and the first steps I took were pretty standard:

  • Got a book from the library on LLC formation, filed the docs myself
  • Wrote a simple business plan (6 pages)
  • Got an EIN from the IRS for the business
  • Made a simple website to collect seller info and market properties
  • Opened business checking account
  • Met a million banks, mortgage brokers, and hard money companies
  • Sourced templates/spreadsheets from various websites
    • Modified documents for my own usage
    • Everything is a template for easy doc generation
  • Asked everyone I knew for recommendations (realtors/contractors/etc)
  • Interviewed a realtor and developed a good relationship
    • He gets my goals and plans, and works towards that - KEY
  • Set up a Trello in order to easily visualize my work
  • Ordered business cards (Fiverr request for logo, then Vistaprint)
  • Searched properties on MLS, wholesaler sites/emails, and driving for $$
  • Walked through 8 houses so far
  • Threw in lowball offers on 3, currently in negotiation

Many would probably still call me silly for quitting a well-paying job when I don’t have any money coming in yet. However, my job was unique in that I could not have my cell phone at work, had very limited access to email, and often was running all over the place during the work day, making me nearly unreachable. Could I buy a house, and have a GC run the project, and check on it before and after work? Perhaps, but I had to be at my desk at or before 7AM most morning. Work til 4PM. Doesn’t leave a lot of prime time at the property while the workers would be there. My wife and I both agreed that to make this business successful, I couldn’t half-*** it, and she supports my efforts. She rocks.

Lessons Learned So Far

I walked into banks with a business plan, some rehab experience, an over-800 credit score, plus cash in the bank and no debt. Was expecting to be given the red carpet treatment, but they basically treated me like a joke. This was a real eye-opener for me. Results matter! They don’t care about my financial prowess or nice business plan – they want to see before/after pics and how much profit I made. So banks, at least for me, were a no go for these early projects. Hard money it is, I guess! Will revisit banks for portfolio lending after project 3 or 4.

Action begets action. I took off random days from work to focus on this, and while I would get some things done, going to work the next day really slowed my progress. However, the more things I put on a to-do list, and the more I checked them off, the more my momentum grew. It’s the Seinfeld method of getting things done – do stuff EVERY DAY to move towards the goal. I outline monthly goals in Trello, and after tomorrow, I will be able to continually stack my completed actions and feel the momentum surge. Should be awesome.

I’ll be posting in the Rehab section and then in the success stories area once my first projects get off the ground. Thanks for reading. And for anyone on the fence – just DO something.

Cheers,

Kyle

Kyle, Awesome story, fun to read and has actionable steps. I love the last statement of "just DO something" it reminds me of a quote from a sci fi book where the captain thinks to himself "I just have to do something, it doesn't have to be right it just has to be something." For myself Slow continual progress is my plan to reach success. 

It's awesome to read how you quit your full time job because I hope to one day quit mine and focus on being in business for myself. 

All the best,

Nicholas

Hello and welcome to BP! You sound like you have your **** together! Just be patient and consistent like you have been. Are you focused on short term or long term investments? I don't think I have anything to offer you that you do not know. Best wishes,

@Kyle H.

Welcome. 

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com

Two Great reads, I bought both J. Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbook

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good Luck

Paul 

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