How (& Why) I Left My High-Paying Corporate Career for Real Estate

by | BiggerPockets.com

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Many people want to leave their jobs. For whatever reason, they dream about working in real estate full-time. For me, it wasn’t so obvious. My wife and I had well-paying jobs. We were comfortable. We didn’t set out on this journey looking to change careers.

Over the years, I’ve house hacked, flipped houses, and now buy large multifamily properties. This is the story of my transition from the corporate world into real estate.

It All Began With Our Primary Residence

In 2014, my now-wife and I bought our first house. Our real estate agent thought we were a little crazy when she heard us talking about everything we didn’t like about the house—and yet we still wanted to buy it. We bought based on location and lot size, knowing those could never be changed. The rest could be improved over time.

Because we only put 5% down, in addition to our mortgage, interest, and tax payment, we also had a private mortgage insurance (PMI) payment every month. This extra expense is paid until your loan balance is 80% or less of your purchase price. I created an amortization table in Excel and soon realized that we’d be making this PMI payment for the next nine years! That was tens of thousands of dollars in extra “insurance” we would be paying. After talking with our loan officer, we learned the only other way to get rid of the PMI would be to increase the value of the property and refinance, making the loan balance only 80% of the new property value. We needed to expedite some of those future improvements.

This area was built in the 1950s, and most houses were built with carports instead of garages. Converting the carport into a garage was our first priority. We got some quotes from contractors. Some were double what we were expecting, and none were within our price range. Thus began my “how-to” binge of construction-related videos on Youtube. (Side note: You can learn to do almost anything on Youtube. Seriously!) After a few weeks and dozens of hours of learning, I started designing the new garage in Excel.

Let Me Step Back for a Minute

You’re probably wondering why I’m creating amortization tables and drawing building plans in Excel. I’m a CPA. A good portion of my day resides in Excel. It’s where I was comfortable.

So, with “plans” in hand, I headed to the city’s permitting office. After discussing my project with the clerk for 15 minutes, she issued me a permit for $473. I convinced some friends and family to help out, and we started framing that Saturday. The following week, I passed the framing inspection, with one potential issue. The inspector let me know that the garage door opener would need its own circuit. I was planning to just use the same wiring that the light in the carport used. When quotes come in from $1,200 to $2,700 for electrical work, I found myself back on Youtube. After a few days of learning, I added two circuits to the garage and passed inspection. A couple weeks later, I’d finished framing, electrical, insulation, and drywall. I moved onto the garage door and siding.

After discussing the project with a few people, everyone agreed on one thing: Let a professional install the garage door. Apparently you can get seriously injured trying to do this. The siding on the house was a blend of block, brick, and wood—all painted yellow. We wanted a cohesive look and decided to stucco the house and paint it white. Again, stucco is something that’s best left to a professional.

We spent $900 on the garage door and $2,600 on the stucco. With final inspection passed, we decide to add french doors to the back of the house and enlarge some windows. After a little more stucco work and paint, we’d finally finished with the project. We were all-in on this project at a little over $8,700.

Our loan officer was shocked to hear we want to refinance already. He was convinced we’d be wasting our money on a new appraisal. We pushed back, and it certainly paid off. That $8,700 investment increased our property value nearly $75,000. Say goodbye to PMI! This real estate thing didn’t seem too difficult.

Before and after [via: Google Maps]

House Hacking (Before There Was a Name for It)

We’d just increased our cash flow by $300 and were wondering if there was anything else we could do. Our house had two spare bedrooms that weren’t really being used, so we listed one for rent. After a month or so, we found someone to rent it for $550/month. Everything was going great, and we loved the additional cash flow. She became a friend to us and grew close to one of our other friends—so clos, that she decided she wanted to move out and become roommates with this other friend.

Two months of vacancy later, we started looking at other options. Airbnb was a brand new app at the time, and we decided to give it a try. We were instantly booked up and started making $800/month instead of $550. We were hooked. We turned the second spare bedroom into a guest room and listed that one, too.

With at least two other people in the house at any given time, we wanted to make the bedrooms a more self-contained space. We added TVs, satellite receivers, and desks to both rooms. Now our guests could stay in their rooms if they did not feel like socializing. With these changes, we were getting nearly $2,000/month in cash flow and soon became the first “superhost” in our area.  

To Flip or Not to Flip

At the same time, we thought back on how much equity we had in our home. If we could do that to other houses, we’d be able to realize that equity a lot more quickly. I started spending three to five hours per day looking on Zillow to see what houses were being sold for in various conditions. I’d look at the history to see if it was possibly a flip. If it was a flip, I’d record it in a log I made in Excel.

After six months, I knew the market extremely well. I could drive by a house for sale in the neighborhood and know what it would sell for. I knew what flippers in my area were buying for and what they were selling for. This gave me the confidence I needed to pull the trigger on a deal. So, we started flipping houses. We made $40K on our first one.

Related: How I Hacked a Half-Million Dollar House in LA as a Full-time Student & Violinist

Before and after our first flip

All-in on Real Estate

We got married in 2016 and decided we didn’t want to have strangers staying in our home with us anymore. Goodbye, cash flow.

We also loved what we were doing in real estate and didn’t have the same passion for our careers. Like I said, I’m a CPA. I have a Bachelor’s and Master’s in Accounting. I worked at Deloitte and was now managing the SEC reporting for a $3 billion public company. My wife was a marketing manager. She got her Bachelor’s in Advertising and Public Relations. We had good paying jobs, but we didn’t love what we were doing. We also knew that if we didn’t take the leap while we were newlyweds that we may never take it.

So, we left our careers. My wife went to real estate school and became a licensed agent. Having access to the MLS was huge for us. It allowed me to access a ton of data that would have be hard to get any other way. It allowed her to look at what flippers were doing and determine the scope of our projects and level of finishes.

We were now full-time flippers. We even got into new construction, since many of the houses in our area are worth less than the land itself. We used hard money, private money, our own money, and family money. We did projects on our own and as joint ventures. You name it, we tried it.

But What About Cash Flow?

We finally enjoyed what we were doing, but it was only a job replacing another job. We weren’t creating wealth and no longer had cash flow. So, we started looking for places to invest our money. We looked into single family residences, but our market was too hot. Then, by chance, the speaker at our local real estate club meeting that month spoke about apartments. Two days later, we went to his workshop on investing in apartments. I learned as much as I could about multifamily, from reading books and listening to podcasts to going to conferences, seminars, and workshops.

My JV partner from flipping was also interested in apartments, and his dad had some experience investing in them. We looked at dozens of properties to partner on, from 12 units up to 52 units. What I found was that there were a ton of buyers for small multifamily, which was driving the price up. The market was so hot that these smaller multifamily properties were yielding returns similar to single family residences. Also, the income from these smaller properties didn’t allow for onsite personnel, which would make management more of a challenge.

To fix these issues, I knew I needed value-add and a larger property. The value-add seemed easy, coming from the flipping world. However, I didn’t have enough money for a larger property. We thought about bringing on another partner, but we needed to get close to 100 units for the management to make sense, and we’d likely need a few partners to get to that size.

Hello, Syndication

That’s when I started looking into syndication deals. A syndication is a group of investors that pools its money together to buy property—and it allows some investors to be passive and others to be active.

We found local sponsors and started investing in their deals, and we also invested in some RealtyShares (to learn more about RealtyShares, click here) deals. Investing as a passive partner was great, but I wanted to get my feet wet as an active investor.

Around this time was when I met Ben Leybovich. He had been investing in real estate for over a decade and was looking to get into syndication. Brandon Turner knew we had similar interests and connected us with each other.

Related: How to Generate $10,000 in Passive Income Monthly Without Quitting Your Day Job

Ben and I started underwriting deals together almost immediately. It took nearly six months of daily underwriting before we landed our first deal. We made it to best and final rounds a few times. We flew across the country to meet with brokers and tour properties. We wondered if we were wasting our time trying to break into the private club of commercial real estate. We realized later that our education, research, hard work, and dedication helped us to form some great partnerships with brokers, attorneys, property managers, and other key players in the commercial real estate world. These relationships are what helped us land our first deal and become part of the large multifamily space.

Quitting a job with a high paying salary that you are comfortable with is not easy—and it’s definitely not for everyone. It can be scary at first, but it’s important to put in the time to learn and find the best direction and avenue that fits your needs and talents. The more you learn, the more confident you’ll be in taking that leap.

Is your plan to leave your job to invest full-time? Why or why not?

Leave a comment below!

About Author

Sam Grooms

Sam Grooms is Managing Partner of WhiteHaven Capital, a multifamily investment firm specializing in value-add properties. Sam began his career at Deloitte, where he assisted public companies with their SEC filings. He went on to manage the SEC reporting for Amkor, a $3 billion public company. Sam graduated summa cum laude from Arizona State University with a bachelor’s and master’s degree in Accounting, and is a Certified Public Accountant.

10 Comments

  1. Curt Smith

    My saying; A bad day in my real estate business is still better then the better days in my fortune 50 company job!!! LOL so whats to compare?

    Having a “Why” that is so powerful it motivates to solve all the difficult “hows”. For me its was my very own Dilbert work place!!! I knew I couldn’t work there any more then I had to. Finding that I could use my good W2 / DTI to finance rentals was a god-send!!! Like you, we bought fast as we could, one after another till in 7 years I quite that corp job!!! Whew! What a race! What a tough path. Our peak buying year was 10 SFRs in one year!! Our first 8 where local, but after that all of our deals where 1 hr++ away. I had to learn remote management AND driving after work and weekends long distance. It was hard.

    I’m helping new folks in my local REIA and I’m finding that their Why of just “I want a better life” is not enough to force the family (REI is not a solo job, its a family’s job) to sacrifice vacations, their parents being gone, kids going to rehabs instead of fun camp etc. I have to say for both of us we had the powerful Why, I do wish more folks could get themselves past balking at having to downsize, save $$$, drive cheap cars (dump that luxo-lease car) and work hard for a few years for a MUCH better life afterward!!

    There’s plenty of success stories, blogs, posts like this one to see that if you DO decide that nothing will stop you, you’re willing to work, sacrifice, throw 200% into REI that it is possible to end up with a great life free of glass buildings, elevators and bosses!!! LOL.

    Hope folks post many success stories here!?!

    • Sam Grooms

      Curtis, thanks for your story!

      And great advice. You’re spot on with people wanting to make the change, but not willing to do what it takes. It reminds of that quote (I think it was Dave Ramsey), “If you live like no one else is willing to today, you can live like no one else can, tomorrow.” I probably butchered that, but you get the idea.

  2. Ben Leybovich

    People always tel me that I had it tough because of MS diagnosis. But, I never had to make a choice between a high paying job and the uncertainty of RE. It takes balls to do this. I admire you and Brittany for it!

    This is only the beginning, and at your age that’s freaking sick…

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