8 Reasons Why Having A Day Job And Investing In Real Estate Is Awesome!

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My Name is Tom Sylvester and I work a full-time job.

(Hi Tom!)

I say that I work a full-time job because I believe that it is important for people to understand that you can be a real estate investor and work a full-time job.

(Boo!  We want to quit our jobs and get in the fast lane with real estate investing so we can make lots of money while sitting on a beach!)

Hear me out.  I want to make lots of money and sit on a beach too!

For many, one of the allures of becoming a real estate investor is the prospect of being able to leave your job.  Most people work a job, not because they want to, but because they need to support themselves and their family.  It is awesome to see people who get into real who are able to leave their job and become successful in real estate investing, but the grass is not always greener on the other side.  While there are benefits to leaving your job, there are also a lot of benefits to have a job.

I plan to eventually get to a point where I do not need to work a day job and can instead live the lifestyle that I want from my investments, but in the meantime I will enjoy the benefits of working a job while investing.

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Benefits of a Job

1. Easier Access to Funds

Description: Most people understand that to get a loan from a bank, they want to see that you have enough income to be able to make the payments.  When you are a real estate investor, banks are one of your potential sources of funds.  Most banks will finance 80% of your investments, but only if you can show income and have a credit score that gives them confidence in your ability to repay the loan.  Before the housing crash, it was much easier to get a loan without a 1099 or W2 job.  Since it is now much more difficult, having that 1099/W2 to show the bank will make getting loans much easier.

How I Benefit: Outside of my first deal (which I bought so cheap the bank said they could give me a mortgage that small), I have not have any issues getting loans from banks.  I show them my W2 along with my credit score and am able to get financed.  This has included multiple mortgages for real estate as well as a business loan to start my wine/liquor store.

Outside of banks, I also do a fair amount of work with private investors.  Being able to show them that I have a job to support myself in addition to my investments provides them more confidence investing with me.

2. Money to Live On

Description: When you have a job, you have a steady paycheck in addition to your real estate investments.  This means that you can make investing decisions that make sense, instead of making them because you are dependent on the income.  This could mean not jumping on every deal and instead picking the cream of the crop.

How I Benefit: I don’t have to worry about how I will buy groceries for my family each week from my real estate investing.  I know that my job provides enough to support my family, as well as extra to save and invest.  This also allows me to invest at my pace and explore different options (such as starting a retail non-real estate business).

3. Learning

Description: There are many skills that can be learned at a job.  Some of these skills may be soft skills, such as listening, communication, teamwork, problem solving, creative thinking and confidence.  Some will be hard skills, like how to operate a computer, market effectively, fix a car or whatever other skills come with your job.

How I Benefit: I learn a ton at my job!  I started out developing software (coming out of college with a degree in computer science), so I learned new technologies and how they worked together.  This helps me in the technological aspects of my business, such as developing my website and integrating data from various sources together.

I then moved on to project leadership, where I learned how to work with a variety of people and manage multiple aspects of a project that included technology.  I also learned a lot about how to handle different problems as they occur.

In my current job, I am using lean concepts to design processes and workflows for people to follow when working on projects.  This helps me understand how to develop and design lean workflows for my real estate business so that I can step away and hire someone else to follow them.

Finally, the company that I work for provides services to businesses, so I learn a lot about other businesses and the services that we offer them, which in turn help me implement them in my businesses.

4. Free/Reduced Education

Description: Many organizations will provide training to employees.  This could be things as small as how to use computer software all the way up to paying for college classes.

How I Benefit: Not only was I able to attend several technical trainings as a software developer, I was also able to get my entire Masters degree paid for by my employer.  My Masters was in Management and I was able to take courses in the following topics:

-Organizational Development and Change
-Quality & Performance Management
-Financial Management
-Ethics and the Practice of Management
and Management
-Business Research Methods
-Management Behavior and Team Dynamics
-Advanced Strategic Management
-Marketing Management
Systems Management
-Project Management
-Executive Lectures/Networking
-Lean Six Sigma

These topics are all important aspects of running a business.  I was able to educate myself on various aspects of a business at no cost to me.  In addition to the learning, having my Masters provides more credibility when talking to banks and lenders.

5. Provides a Buffer

Description: We all have the best intentions when getting into real estate investing, but as any experienced investor can tell you, we all make mistakes.  We pay too much for a property, we over improve the property,  we rent to the wrong tenant, we wait too long to evict and so on.  Having another source of income outside of your real estate investing makes these mistakes less have impact.

How I Benefit: I haven’t really paid too much for a property, but I have spent too much on renovations.  My basic strategy for buy and hold investing it to purchase run down properties with cash for a discount, renovate them to rent and refinance to pull my cash out.  In some cases (especially early on), I spent too much on the renovations because I incorrectly calculated the ARV.  So when I went to refinance to pull my cash out, the refi did not cover the purchase + renovation costs.  It if did not have cash coming in from a job, I would have had to pay quite a bit of interest on the portion of cash that was not included in the refi.

There have also been cases where I lost several months worth of rent by not evicting a tenant soon enough or had a large expense related to a property.  Finally, I can use the profits from real estate to grow the business faster, since I am not relying on them to support myself and my family.

6. Forces Creation of Systems

Description: Books such as The E-Myth and The 4-Hour Workweek describe a business as a collection of processes (or systems).   These processes, when executed, enable the business to deliver a service or product to the customer.  Instead of the traditional thinking that the owner of a business needs to be involved daily and work a lot of hours, these books recommend creating these processes and outsourcing someone else to actually perform the tasks.

By working a full-time job, a person does not have the time to work the job and then handle all of the aspects of their real estate investing businesses.  This forces the individual to create systems and pay others to perform them.

How I Benefit: I have a full-time job and a family, so I need to limit the amount of time that I spend on my personal businesses, otherwise it will cut into my family time or it will cut into my job.  So for every aspect of my business, I am forced to define the processes and outsource them.

When we had our daughter, this allowed my wife to stay home and raise her.  She is now the office manager for our businesses and makes the same income that she did while working, but she works less, has a flexible schedule and can spend lots of time with our daughter.  When I am not working, I can spend time with my family, instead of trying to catch up on all of my work from my businesses.

7. Free Money

Description: Companies often offer perks to their employees, such as stock options or retirement matching plans.

How I Benefit: One of my funding strategies for properties is to borrow from my 401k retirement account through my employer.  I’m allowed to borrow up to $50,000 from my 401k for a few percent of interest.  My employer matches some of my contributions.  So I am getting additional funds in my 401k, which not only helps me with my real estate investing, but also helps in having more money available in my 401k to allow it to grow.

8. Health Insurance Plans

Description: Health insurance is a confusing and costly expense, especially for those who own their own business.  By working for an employer, health insurance will most likely cost less as employer insurance rates are often cheaper since they receive economies of scale by offering plans to their employees.

 How I Benefit: I don’t have to spend extra time or expenses on researching the best insurance for myself or my family.  I am able to take advantage of my employer’s plan and it automatically gets deducted from my paycheck.

Conclusion

Most people that I speak with and articles that I read discuss focusing on quitting your job asap so that one can invest in real estate full-time.  That is definitely one path of many, but there are many benefits to having a job, especially early on in your investing.

Have you quit your job to invest in real estate full-time?  Or are you currently investing in real estate while still working for someone else?  Let’s hear your thoughts.
Photo Credit: Acciones Urbanas / Left Hand Rotation

About Author

Tom Sylvester

Tom is a serial entrepreneur and real estate investor from Rochester, NY. His real estate investments primarily target multi-unit properties. Along with his wife Ariana, they run a blog called Entreprenewlyweds, which helps couples understand how to manage being real estate investors/entrepreneurs while also maintaining a great relationship and family life.

41 Comments

  1. Great article and definitely on point. I was able to pull money out of my homes because I had the income and that helped provide cash for doing my flips. It’s definitely hard juggling a job where you must continually perform (sales) and making sure your contractor is coming in on time and budget AND your rentals are taken care of. Small enough now to still do that and it greatly helps I invest nearby where I live and my job allows me to work from home.

    • Tom Sylvester

      The ability to pull cash out of the houses is huge.

      Regarding it being difficult to juggle the job, that is where #6 comes in. When you have a job, it forces you to creates processes that can be outsourced to someone else so that you don’t have to be the cog holding everything together.

      Yesterday we received 3 calls about a SFH that we have for rent (from ads that my assistant put out). My assistant arranged with our guy (the property manager) to show them today and called the people back to schedule the appointment. When she gets the applications, she will screen them and approve/deny them. Once they are approved, she will arrange with the new tenant to meet the property manager to sign all the form and collect the money. Since I developed these systems, I am not mentioned in any part of that new tenant process. This means I can work my job and not have yo worry about all of these tasks, or become a bottleneck for the business.

      • Aziz Usmanov

        Hi Tom, thanks for the article. I can relate to your story since I am a software engineer myself and own/operate 14 units. From the process you described above your assistant and property manager need to be paid for doing their jobs. Isn’t it similar to paying the commission to property management company (PM)? How do you find your process more efficient in comparison to PM processes?

  2. Great article. You really have to haven lot of passive income to account for the downside risk and the ability to save more funds for more investments. If I wasn’t working and instead was just barely getting by on passive income I would feel disappointed I wasn’t saving to do more deals and investments.

    • Tom Sylvester

      Thanks Matt. That is how I look at it. My real estate business would not be as successful and we would not be able to do as many deals if I was trying to live off the income right away. Having the income from my day job to help the businesses when we make mistakes has helped us more than once.

  3. Michael Woodward on

    Excellent article Tom! I’m in your shoes exactly! I agree especially about building systems. It feels like it’s going to take forever to put it together but it will be worth it in the end.

  4. A well written article and some great advice. In my case,,, being laid off put the desperation fear into me.. It forced me to get busy and learn about Real Estate wholesaling and Lease Options and Subto’s. I started a little less than 2 yrs ago and have made some great money, I have actually spent about a year on a tropical island out of these 2 years. I think if I was still at that job, I would still be miserable and wouldn’t have the free time I now enjoy with my family..
    So, your advice is sound of course, but you have to admit there is some thing to say about being desperate which could potentially make a person get off his rear and give it 100%

    • Tom Sylvester

      There is a lot of validity to needing to make things happen. When people are doing good, but not great, it can be easy to be content with their situation and not push for greatness. Sometimes the best things for people is to create a situation where they can’t go back so that they put all of their effort into succeeding. That is one of my favorite concepts from “Think and Grow Rich”. I think a lot of this comes down to understanding your “why”. If you why it big enough, even with still having a job, it can help push you towards success. For me, I like to take calculated risks and would prefer to keep my job while I build the business, but I also think I would do phenomenal things if I was forced into a situation like you were.

  5. One other advantage to keeping your day job is that you can compound the profits from the real estate investing. I’ve been rolling my profits forward to purchase more properties, therefore increasing the velocity of my cash.

    • Tom Sylvester

      I somewhat hit on this with #2 & #5, but you are definitely correct with that comment. If you don’t need to use your profits and can instead invest them back into the business, the business can continue to grow faster and faster.

  6. I totally agree with you Tom. My husband LOVES his job. He his living his boyhood dream of flying F-18’s for the navy. Since he loves what he does and has no desire to leave any time soon. We have been able to use his steady paycheck for all of the reasons that you have mentioned.

    One of the thing you touched on briefly is your wife. Our reasons for investing in real estate is so “I”, the wife can stay home. Living his dream has shreaded my “traditional” career abilities. Although I have a masters degree, we have moved 5 times in 3 years. Therefore his love has allowed me to invest in my love. This allows me to manage everything from home with the flexible schedule and still be able to invest further using his steady paycheck.

    Best of both worlds!!

    • Tom Sylvester

      That is awesome Elizabeth! And you mentioned a key point for anyone that wants to get into real estate investing, which is to make sure that your significant other is on board. When we started, my was was very concerned about real estate investing. The best thing we did was to sit down and map out our goals, starting from 10 years out and working backwards to determine what we needed to do to achieve them. By doing this, we both understood how we could achieve our goals and it helped direct us down this path.

  7. Dennis Rodriguez on

    Hey Tom,

    I have a full time J.O.B. and I wanted to quit so bad. Then, I started listening to the BP Podcasts and hearing about people that are investing while keeping their 8-5 jobs. It totally opened my eyes to the benefits. I recently talked to a Hard Money lender and they told me that having my W-2s will help a long way to getting a loan approved. So I’m definitely keeping my job. The other thing that convinced me was the cost of health insurance for my family if I was to go on my own. Now I feel like I have to be making REALLY good money on the side to even start contemplating leaving my weekly paycheck and excellent health insurance.

    It just feels more relax to invest this way. Quitting my job is now a long term goal, instead of an urgent necessity like I wanted.

    Thanks again, man.

  8. Thanks Tom!

    I get discouraged when I read things on BP regarding some individuals who don’t think you can invest on the side.

    I have 3 kids all under 3, and so it has been a challenge to market for leads, and keep up with the phone calls, I know that it will pay off in the end.

    I have to read the 4 hour work week. Currently my job loves the structure and implementation of standards/process. While not everyone can follow directions easily, it sure does create a pathway for someone to follow so that you don’t have to.

    • Tom Sylvester

      Eddie – Thanks for the comment. You are exactly the person that I wrote this for. I have seen a lot of people that think they need to jump right in and quit their job and that is what people often hear, but I wanted to make sure people were aware of the flip side and the benefits.

      Regarding phone calls, if you are still handling them, I would recommend setting aside a specific time to listen to voicemails and return calls. Hopefully you are using something like Google Voice (I have a blog about how I use google voice for business on my site if you are interested). If you are, this will set you up to be able to outsource the receiving and returning of calls to someone else in the future (4HWW).

      Good luck on your journey.

  9. Hi! Tom, a very good article on working a full-time job and doing the Real Estate business as well. However, when a person is doing a part-time business (after being laid-off), and doing Real Estate business too, how would you handle that?

    • Tom Sylvester

      @Mark – Without knowing your specific situation, it is hard to address. Here are a few suggestions:

      -Determine your goals (10 years, 5 years, 3 years, 2 years, 1 year, 6 months). Work backwards from 10 to see what you need to do to achieve your goals
      -Once you have done your goals, use that as a guide. Based on that, you may decide to go back to work, at which point you can gain some of the benefits of this article. I just wrote a blog on my site with some strategies for finding your next job that may be useful to you. Or when you look at your goals, you may decide that getting laid off was a blessing in disguise and the motivation you needed to really get going with your real estate investing.

      Those would be my 2 recommendation. Good luck with your situation and I hope for the best.

  10. Thanks Tom, this was a well needed message especially for me, I don’t like my current job but, I have a company car, company expense account and other great benefits that allow me to have some flexibility while building up my real estate business. All of those points you have stated above puts things in to focus and why one should keep a job until the need to jump the job ship is painless. Alll great points.

    • Tom Sylvester

      Thanks Perry, glad I could help. It is tough for us to all keep things in perspective, especially when we hear others going full time in real estate and the allure of real estate is there. The thing for us all to remember is that investing in real estate is still a job (until you get to the point where you can outsource the majority of your business). If someone enjoys the job of real estate (ex. flipping, wholesaling, etc) and they have the means to do it, then that is a great option for them. But many people just want to leave their job, not realizing they left job 1 for job 2 and the grass is not always greener.

  11. Fantastic article Tom! My husband and I have the following plan: we both hold jobs currently. Have been investing for a couple of years. Will speed up the investing for a couple more and then I will jump full time into it, while he still keeps his in order to draw the benefits like steady income and health insurance. We are only unsure if I need to become a realtor in order to be more proficient at the investing. What are your thoughts on this?

    Thank you for this great information. Put a lot of thing in perspective for us!

    • Tom Sylvester

      Diana – I love that strategy, my wife and I followed it as well. Now with her being home, she is able to handle more of the day to day stuff while I continue to work and have the income/insurance. Plus she gets to raise our daughter and we have by not having to have daycare. I am glad to hear that you guys are progressing with your plan.

      I am not a realtor but I do see the benefits. I think the answers comes down to you and your investing strategy. Do you want/need direct access to the MLS? Is the time spent getting your license the best use? Do you want to do the work for comps yourself or do you want to work with a realtor? Are you doing flips, and if so would you want to sell your flips yourself? Do you want to be able to see properties on the MLS without having to wait for an agent?

      I think it would be beneficial to have my license, but at this point for me my time is better spent in other areas. I have relationships with a few agents that assist me when needed.

      • Tom,
        I have a rather unique situational “Job” if you will. Since my wife and I buy distressed single family properties and rehab them ourselves, this takes up a lot of time during a project. When we are between properties, I work delivering campers. This allows me full time income, with the flexibility to work on my schedule.

        I can take off all of the time I need when I have projects going, and start back up when I need to. Right now I am in the middle of a rehab, but the drywall contractor is in the house for 5 days. So I simply pick up the phone and get work for a week. Its a great situation that allows me to fill time gaps during those dry spells.

        My goal over the next 4 years is to have my rental income pay 100% of my cost of living. But trust me I wont be retiring, I’ll use that comfort level to ramp up my investing and start creating real wealth.

  12. Lots of good points.

    Back when I was at my old JOB the benefits were great and I got them to pay for 2 Master degrees as well as with those company matches I was able to accumulate 6 figures in a 401K without ever really feeling it.
    Also so true about getting mortgages! Got them very easy on our first few rentals but since going full time have not been able to get anything from a bank. For me THAT is by far the worst aspect of doing REI full time.
    We actually have to work on segregating finances a little so we can just use my wife’s W2 to qualify for a mortgage. She does pretty well, has good credit and so far we have only been looking for small loans so it SHOULD work…

    On the other side though I will say that going full time REALLY amped up my income and my property acquisition. While working we had 3 (not really) cash flow properties. In less time since going full time we have more than tripled that as well as doing lots of quick turn rehabs and wholesales.
    The “kick in the pants” aspect was big!

    Like most things it is a gray area. Pros and Cons for having and not having a job. It will be the right thing for some people and getting full time ASAP will be better for others. People have to keep an open mind and evaluate what will make the approach for their goals and current situation.

    • Tom Sylvester

      Shaun – thanks for the comments and several great additions. There is definitely something to be said for needing to be successful (ex. going full time and not having a job). It is often far too easy to not do what is needed when you know you can fall back on your job.

  13. Great article! Here are a couple more reasons why having a job is beneficial:

    1. Allows you to pay the holding costs for said property

    2.Can possibly help you avoid the 15.3% Self Employment tax

  14. Great comments from everyone….has anyone ever used Private Linders, Hard Money Lenders, or Gap Funding to buy your flips? We don’t use any banks to buy Real Estate….you always use someone else’s money!!! On every flip you do, you should be walking away with at $10.000-20,000 in profits to give you enough leverage to find the next flip. If you do you comps, repair costs and other costs correct, you will come out with money in your pocket.

  15. Here is one for you. I just took a full time job as assistant manager of an apartment complex. It operates under the section 42 of the IRS code. Since I just bought my first duplex a year ago I have a lot to learn. I will now get paid to learn! And I will be building relationships with every local govt agency in town. Seems that some times having a job is not that bad.

  16. Interesting Article!

    I think it really depends on the job. for some one who loves their job, fills fulfilled and makes decent pay, then there would be less motivation to “quit” and go full time RE Investing. But for a great majority of ppl, they have jobs so as to get that paycheck. Some persevere thru jobs, so I can see why having the ABILITY to do RE Full time would appeal to them.
    As far as getting financing, the conventional method is not bad can also be limiting in terms of the amount of financed properties one can have.
    If you love your job and also enjoy real estate, then great! keep it and have the best of both worlds, but if you’re job isn not working out for you, there is a whole new world focusing your talents and strengths doing RE Investing

    • Danny – I agree. There are some people out there that enjoy their job and will keep it, and some that really want to replace it. My objective with this post was just to point out the benefits (and things that people lose once they don’t have a job) to make people away. I have talked to some people who were doing great investing in RE on the side, but then when they quit (probably too soon), they didn’t account for things like the extra cost of insurance, or making sure they had funding that was not tied to their W2 income.

      Thanks for the comments.

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