How I Left my Six-Figure Income (Before Real Estate Replaced It)

In January, I left my six-figure income, BEFORE real estate income had replaced it, to spend more time with my daughter while also focusing on building our family real estate business. Spoiler alert - my husband has a high-paying job with good benefits. I'm by no means jumping without a net. Nonetheless, there's a lot involved in a decision like this! Here are five key steps my husband and I took to prepare for the big leap.

1. We Built Experience (and Investments) in Real Estate

I want more time with my daughter than I could get while working a 9-to-5, but I also have some big aspirations as well. I want to build something for my family... something that will support us, fund our retirement, and give us something to pass down to future generations. I want to build wealth for my family!

I had my daughter in 2016, and immediately wanted to find a different way to support my family while also spending more time with them. My husband and I had always been interested in real estate, so I finally dove in to educating myself and searching for our first investment property.

We bought our first rental, a cash-flowing 4-family, in June 2017. Since then we've purchased two more duplexes, wholesaled a property we found through direct mail, and flipped one house. Learning by doing was key in helping me build the confidence to quit my job and pursue real estate even more actively.

2. I Networked Like Crazy!

All of us BPers have heard it a million times from the podcasts and blog posts... network, network, network. Real estate is a relationship business, so I decided early to make networking a key part of building my business. I would schedule meetings early in the morning before work or during my lunch hour. I'd meet people to talk real estate during my daughter's nap time on weekends, while my husband stayed home to keep an eye on her. Always trying to expand my network, preferably without sacrificing valuable family time.

After closing on that first investment property in June 2017, I posted about the deal on BiggerPockets. Contributing forum posts and answering questions for others through this website has been a great way to build a real estate network. That first forum post in June 2017 got so much feedback that I invited a bunch of my new connections out for a happy hour to talk real estate. Over time, our little group grew into a regular monthly meetup with 30 to 40 attendees per event. Our size garnered interest from some local real estate-related businesses, so now we have sponsors who support the cost of a private space and some appetizers and drinks for the group.

I started the meetup to make connections and surround myself with like-minded people. There weren't many people in my other circles of life who knew much of anything about real estate investing, and this group gave me that circle. I just wanted to be able to bounce ideas off others, celebrate with others when things went well, or laugh (or cry) about my mistakes. But I've also managed to build a reputation as someone who's serious about real estate, and a connector in my market. Networking has brought unexpected benefits that will certainly help as I build my business.

3. We Assessed our Financial Health

The decision to quit a job, and leave behind that regular paycheck, should always involve some basic math. What do you have coming in and going out each month? How will that change after you leave the job? Whether you're leaving the sole source of income for your family, or just one source of income, this math is important.

All of us on BP have probably heard the term "house hacking" before. I'm not house hacking (yet), but I like to joke that I'm now "spouse hacking." (Don't worry, my husband shares my long-term vision and is totally on board!) My husband also had a well-paying job with solid benefits, but we spent a lot more on conveniences when we were both working our busy, full-time jobs. Why not rely on his income and give me the time to both invest for our future and reduce our monthly expenses?

Thanks to starting early with some basic personal finance fundamentals, we had no debt other than our mortgage, a high savings rate, and a good chunk set aside in various retirement accounts. We also had a few cash-flowing multifamily properties that we could use to keep feeding our growing business. But we were spending a lot on child care, eating out, etc. because of our busy, dual-income lifestyle. Leaving my job to focus on my family and our real estate business would allow us to switch my daughter to part-time care, and give me the time and flexibility to make other small changes to reduce our budget. Little things like cooking meals at home more often, buying most of our groceries at Aldi instead of the pricier grocer down the street, and taking the time to seek out more free entertainment have really made a difference in our budget. It's surprising how much these seemingly small changes have added up and allowed us to stay comfortable in the months since I've left my job.

4. We Checked our Borrowing Power

With two high incomes and practically no debt, my husband and I had been having a pretty easy time getting bank-financing on our first few properties. One reality of walking away from my job was that it would affect our borrowing power for future investments. So, I called our lender and straight-out asked her about it.

We hadn't yet used the rents from our real estate as income on our loan applications, so we took a few minutes to see how much those rents would help. After some simple math, my lender told me that we'd basically matched the borrowing power of my income with our real estate investments so far. WHEW. Of course, this means we could have had even more borrowing power if I'd stayed at work and started using our rental income on our loan applications... but I'm okay with giving that up. Our borrowing power now is enough to buy a couple more rental properties, and those rental properties will help build our income further. When we can no longer get traditional financing, we'll use seller financing, commercial loans, partners, or whatever else it takes. It's worth it to have more time with my kid now.

5. We Planned What Our New Reality Should Look Like

We've covered a lot here, but the biggest worry in my mind was how happy our family would be with this change. Would I strike the right balance between working on our business and focusing on our family? Could we still afford to have the experiences that we really wanted to have in our lives? These were the things my husband and I really spent a lot of time talking about.

We knew there were some things we could prepare for. For example, traveling is very important to me. I lived abroad growing up, and have continued frequent traveling as an adult. It's an experience that I don't believe in setting aside to do when you're retired, and I fully believe in travel for the whole family. So I took some time to learn more about travel hacking, and we signed up for credit cards with travel rewards. My husband and I pay for absolutely everything we can, for our family and for our business, on these credit cards and then pay them off in full every month. Between smart budgeting, these credit card points and other travel hacks, we'll ensure travel can still be a part of our lives.

Some things we can't prepare for. Leaving the traditional 40-hour work week means big changes to my daily life. While my husband is working five days per week, I'm splitting my time between staying home with my daughter and working on our business. Striking the right balance isn't easy or automatic... it will take time and experimentation and fine-tuning as I go. Business doesn't always happen on the two days per week that my daughter is in daycare, so sometimes I have to take a quick call or answer a text while we're at the park. But I always keep in mind that I didn't leave my job just to sit my daughter in front of the TV while I work. She's only this young once, and I want us both to enjoy this time together! So I still get up early and stay up late to work while she's sleeping, just like I did when I was working my full-time job. And I fully recognize and accept that sometimes, when I'm ignoring email to be present with her, it means I'll miss a great deal. That's ok. There will be more deals... hopefully showing up on Tuesdays and Thursdays when she is at daycare. ;)

Conclusion

I've said a lot here, but the bottom line is simple. I left my six-figure income because I recognized a bigger opportunity in life and worked with my spouse to develop a plan to seize it. There's a little science involved in the budgeting and the practical planning for these changes... and a LOT of art in getting your head right to make the leap and go for what you truly want. I'm so excited for all the challenges and rewards to come!