Don’t Quit Your Day Job: Real Estate as a Career or Investment?

28

Download Your FREE copy of ‘How to Rent Your House!’

Renting your house is a great way to enter the world of real estate investing, but most first-timers (understandably) have a lot of questions. Fortunately, the experts at BiggerPockets have put together a complimentary guide on ‘How to Rent Your House’. All the skills, tools, and confidence you need to successfully rent your house are just a mouse-click away.

Click Here For Your Free Guide to Renting Your House

Do You Like Your Job?

I used to be a personal banker in a large national bank and I absolutely despised it. Each day was worse than the previous one, so I spent all my free time devising a way to get out of that job. It took me almost a year, but after I quit I never took another job again. I fell head-over-heels in love with real estate investing and haven’t looked back since. I manage property, flip houses, and have a number of properties that cash flow enough to pay my bills.

On the other hand, my friend Kyle is a pilot for a large commercial airline, and has been for more than twenty years. He loves his job and would never dream of quitting. He still invests in real estate, but in a different way than I do.

A third friend of mine, Mike, flips houses for a living. He has huge success with it, but doesn’t keep any of his properties. He drives a nice car, lives in a large house, and has very little in savings.

Which of the three of us is a “real” real estate investor?

The answer depends on how you define “real estate investor.” I believe a real estate investor is an individual who is building up lasting wealth using real estate as the tool to get there. Based on that definition, in the three examples above, I would rule my friend Mike out of the real estate investor club.

The point I am trying to make is this:

  • It is possible to have a career in real estate investing without investing in real estate
  • It is possible to invest in real estate without having a career in it.

You’ve probably heard the age-old high school guidance counselor question, “If you suddenly had one-million dollars and didn’t have to work anymore, what would you do?” The answer, it’s said, is what career field you should be in.

Would you invest in real estate?

I know I would. But if your dream path would be to open up a shelter for abused animals or to move to Aruba and train tourists to surf, you probably should not be a full time real estate investor.

Notice that I didn’t say “don’t invest in real estate.” 

However, you don’t need to make real estate your career in order to build wealth in real estate.  Keep your day job if you love it, find a better job, or start your own business. It is important to understand the difference between real estate as a career and real estate as an investment.

Using Real Estate as a Career

Many so-called “real estate investors” are not actually investors. They buy and sell property, but the day that they stop their daily activity they stop earning income. This sounds a bit similar to another form of income generating activity known as a JOB.

There is nothing wrong with buying and selling property. I, myself, do it. However, I recognize that I am not better than someone with a job, I just happen to be self-employed. I am in the same category as someone who opens up a dry-cleaning business, a hot dog stand, or a start-up technology company.

As I mentioned earlier, I love real estate and I have chosen to make it my career because even if I didn’t have to work, I would still do it.

If you truly want to make real estate your career, great! There are numerous ways to do it, but the most common are:

  • Wholesaling deals
  • Flipping houses
  • Buy-and-Hold while living off cashflow.

However, if you simply use real estate as a tool to make a buck, and then spend that buck, you are not building wealth. If you want to flip houses for a living, but live off the entirety of your profits, you are simply another self-employed business owner. It is imperative that you use real estate as an investment as well.

Using Real Estate as an Investment

If you love your job, you don’t need to quit to invest in real estate. You can achieve the same or better results as a full-time real estate investor by investing on the side.

By keeping your day job, you have several advantages over a full-time investors. First, you do not need to live off any of the cashflow you make. By reinvesting all the profits from your investments, you can fully realize the incredible benefit of exponential growth. Additionally, you have a much easier ability to get long-term bank financing, which can also help increase and stabilize your wealth building.

Investing in real estate while keeping your day job can be done in many ways, such as:

  • Partnering in a larger piece of property
  • Buy-and-hold property with property management
  • Serving as a private or hard money lender

Real Estate as Both a Career AND Investment

Real estate investing can be a highly profitable career, investment, or both. However, the choice is yours as to which path you take. Don’t simply decide to quit your job and become a full time investor because you read about other investors who do it that way.

Life is too short to be stuck in a job you hate. Choose a career that makes you excited to wake up in the morning, energized through the day, and content when you fall asleep at night. If that desire leads you to full time real estate investing, I embrace you with open arms! Just make sure you are not simply building a career, but building a future.

Comment below and tell me – do you use real estate as a career, investment, or both?

Image courtesy of FreeDigitalPhotos.net

About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on BiggerPockets.com. Like... seriously... a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of "The Book on Investing in Real Estate with No (and Low) Money Down", and "The Book on Rental Property Investing" which you should probably read if you want to do more deals.

28 Comments

  1. Brandon,

    Glad to heard you also wanted to get away from your job asap too! One of my last traditional jobs was that of a bank teller too, not sure if that the same as a “personal banker”, or maybe that’s just what they call it in Wa. 🙂

    I absolutely like the concept of “purposefully” investing AND being conscious as to why you are investing in each piece of property. Is it for the money, fame, experience, cash-flow, etc.

    Best,
    John

    • Brandon Turner

      Hey John,

      I worked more on the sales side of the branch banking (checking accounts and credit cards with some Home Equity Loans and Lines included). I hated the sales, and the “you must open nine checking accounts today or you might lose your job.”

      One day they asked me to paint a room upstairs, and I enjoyed it so much more I put my two-weeks notice in that day. They lost a banker but got a terrifically painted room 🙂

    • Brandon Turner

      Awesome Ziv, thanks!

      I, too, have been thinking a lot about this recently. I’m an entrepreneur at heart, so I always have a million ideas for how to make money. But when I follow the “and then what?” trail, I always lead back to “I’d invest in real estate”. Like, if I was a rock star and made millions… I would use my money to invest in real estate. 🙂

  2. In spite of the punctuation errors that made the article hard to read, this was a very interesting article.

    I want to get started in wholesaling. As a realtor, I suppose one could call what I do retailing, but the main problem with that is that I’m selling other people’s properties and not my own, so I am not making as much money on each deal.

    I’ve heard many real estate gurus and now this author say things similar to, “It is possible to have a career in real estate investing without investing in real estate,” and I’m not sure I believe it. I know a lot of investors, and they usually pay cash for properties. They right a check for the entire asking price or a large portion of the price, but there’s always an investment involved.

    I don’t think that a wholesaler is an investor, and they should not call themselves such. They are wholesalers who wholesale properties to investors rather than retailing properties to them, and there are wholesalers in lots of industries.

    Let’s chat with one another.

    “Rick in Amarillo,” Realtor

    • Brandon Turner

      🙂 I knew I should have had my wife proofread that thing! I promise – better punctuation next time!

      I think it’s great that you want to get into wholesaling. I wholesale, as well, and I think it is an awesome place to start. I agree, wholesaling probably isn’t “investing” in the way I define it, but its exactly what I described – “a career in real estate without investing in real estate.” Glad we agree on that! Being a Realtor would be another, as would being an appraiser, mortgage broker, etc. They are all ways to have a career in real estate without investing in it.

      I love flipping, and I do think flipping could be investing – depending on how the money is used after it is made. If it is simply spent and nothing gained in the long term, I would call it retailing. However, if the money is used to buy more property or reinvested other ways, then yes, it’s an investment activity.

      Thanks for stopping by! Good luck as you start investing!

  3. An annoyed reader on

    “Rick in Amarillo” – The only feedback I have regarding your comments is in respect to your first statement, “In spite of the punctuation errors that made the article hard to read, this was a very interesting article.” Before you pick on the grammar and punctuation of others, I urge you to proofread your own writing — particularly the last sentence of the 3rd paragraph of your comments: They right a check for the entire asking price or a large portion of the price, but there’s always an investment involved.

    I believe you were looking for the term, “write.”

    There’s nothing worse than someone who thinks they are smarter than everyone else . . .

  4. Jason Grote

    Brandon,
    Thanks for the fun post! My wife and I sold our former businesses to go into Real Estate full time and we love it. It has been a passion of ours, so I don’t think we would be satisfied with doing it on the side. I think any type of Real Estate buying and selling is “investing”. I don’t personally spend a dime of my own money, yet I consider myself an investor in real estate. I do however invest a lot of time, energy, and hard work!

    • Brandon Turner

      My wife and I love it as well!

      I agree, I think any type of buying and selling would be investing – as long as the money is used to build wealth in some way. In my opinion, I think the division between career and investing is in the results.

      I look at it this way – if someone buys and sells houses for ten years (flips, wholesale) and suddenly stops and have nothing to show for it – it probably wasn’t investing (or just bad luck or bad investing). I know people just like that! However, if those flips are used to build wealth of some kind, then I would consider it investing. If not, I’d probably call it just a career. Not that there is anything wrong with having a career, but if we are doing all this work for nothing in the future, we are missing out on most of the benefits of real estate.

      Thanks Jason!

  5. Completely agree – I think it is a good mix to do both – build long term wealth but occasionally add short term income to pay off your own house or the properties you plan to hold faster.

  6. Hi Brandon,

    Its certainly a very well crafted article and its had lots of things to learn about and I like the idea of choosing the job which you like and energized you about that. Thanks for sharing great post!

  7. Brandon, I love this post first off!!! Here is my dilemma, I’m a realtor already, but I really want to get into Wholesaling. I have gone to seminar after seminar, have signed up for all kinds of newsletters and basically it seems like everyone wants a lot of money, but no one really wants to TEACH you what to do. Do you know of a way I can truly learn how to wholesale real estate without it costing me a kidney and a child?! LOL Thanks for any help you can give me. And I’m one of those that wants to do this full time! 🙂

    • Brandon Turner

      Hey Roxy,
      Thank you! I understand the dilemma, I’ve been there. You have a few (great) options that are free:
      1.) Plug into Biggerpockets.com. There are tons of wholesalers here who give away oodles and oodles of free information about how they do it. Connect with them!
      2.) Read as many books on wholesaling as you can
      3.) Go work for a wholesaler for free – or at least take them out to lunch and pick their brain. A good place to find a wholesaler in your area is to look for the bandit signs that say “We buy houses” or something similar. You should be able to find one there or at least find the guys who are buying the houses. They would be more than happy to teach you how to bring them deals. If someone asked me that, I’d jump at the chance to have a local person bring me deals. 🙂

      Good luck! Keep us updated on your journey!

  8. Brandon,
    I agree with you 100%. You must love your job in order to be great at what you do. Real Estate investing is a give and take business in my book, you get whatever it is that you put into this sort of business. I love this industry and find that I try to keep a balance between everything. Thank you for the informative and inspiring article!

  9. There’s a reason why they say a job and a career are two different things: a job is what you do because you have to; a career is something you do because you love it. If you’re not ready to love real estate by dedicating the time and effort required to make it work, then don’t make a career out of it.

Leave A Reply

Pair a profile with your post!

Create a Free Account

Or,


Log In Here

css.php