If you are thinking about leaving your full time job and seriously pursuing a career as a full time real estate investor, then this article is written for you.
For starters, it is not an easy decision to quit your full time job and jump in an uncharted territory from the get go. So, if you are a new real estate investor who is just starting out, please do not quit just yet. This is a big move on your behalf, and you must weigh all your options before moving forward with your final decision.
Most importantly, know what you are getting into because the real estate business requires lots of work and dedication in order to make profit on your investment property. With real estate investing, you cannot run before you can walk. Thus, you must acquire a thorough knowledge about the industry as well as keep up with the ever changing market trends at all times. If you quit your job today, the opportunity cost is your steady flow of income and the overall financial security that comes with having a full time 9-5 occupation. That being said, it is quite possible to quit your job and start a full time real estate investing business after the early stages.
7 key principles before you quit your 9-5 job
1. Learn the ABC of real estate investing inside and out
You cannot tackle real estate investing head on if you do not possess a deep knowledge and understanding of the industry. It goes without saying that you must learn every nitty-gritty detail of real estate before you become a full time real estate investor. When you have the basic foundation, you are at a better position to assess and grow your investment opportunities. This will take some time, but at least learning is free and you have access to many online platforms like Mashvisor as well as an infinite number of quality blogs that can speed up the learning process.
2. Find the best strategy for you
Once you have acquired enough information and data as a real estate investor, it is time to hone in on a real estate investment strategy and figure out what kind of investing you want to get into.
Below are the top real investment strategies to venture into:
- Buy and Holds. This is a passive strategy that allows a real estate investor to buy investment properties and hold them for a long period of time without a penalty.
- Airbnb Investment Properties. With the buy-and-hold strategy, you have the option of investing in short term rentals such as Airbnb.
- Fix and Flips. Buy a cheap property, renovate it, and resell it while making money from the purchase price and the selling price.
- Commercial Real Estate Investing. Investing in properties that are leased to businesses.
- Passive Investments. Investing for long term gains.
- Real Estate Wholesaling. The goal is to sell the property before the original contract with the seller ends.
3. Be frugal
Self-employment is a risky business and if you are planning to become a real estate investor full time, you better make sure to cut down on your expenses and not run out of money. Having a full time job gives you financial stability and a steady flow of income, but when you convert to running your own business, you have to make sacrifices in terms of what is important to buy and what is not. It is important to keep in mind that one month you might have great rental income, and next month you might be left with nothing (if you tenants leave).
4. Save before you quit
In addition to living frugally, a real estate investor also needs some capital, aka cash, to start his/her real estate investment business. Don’t quit your day job if you do not have enough savings as a financial buffer. Consider at least 6-12 months of savings before you quit your job.
5. Have an entrepreneurial mindset
To build a strong real estate portfolio, you need to be fearless and obsess over your new business venture. You need to to talk to people, ask questions, and learn how to sell and negotiate your way to high ROI and positive cash flow.
6. Keep up with real estate
Know your market, stay educated, and understand the risks. Successful real estate investors stay updated on current market and economic trends to plan for the future. In turn, this allows a real estate investor to predict positive trends to create lucrative opportunities for their real estate business. It is also crucial to stay up to date with the laws and regulations in your selected city.
To grow your real estate portfolio, you must build a strong network of business relationships with clients, business partners, associates, etc. Don’t exclude referrals as they can generate many new leads. Your clients almost always know friends or family members like themselves who need your service. Becoming a full time real estate investor is not a one man show and you are dependent on other people with your real estate investment network to help you grow and leverage your business in the long term.
To put it another way…
If you start making more money by working part-time in real estate investing than at your 9-5 job, then it is safe to consider becoming a full time real estate investor and throwing in the towel on your current job. But, there is no reason to rush your decision, take all the time you need and make sure you are fully prepared and have taken into account all the logistics involved before making the final decision. Operating any new business venture will require lots of hard work and commitment in order to get it off the ground. Don’t be too hasty!