So why are we putting up posts about news and tips for “new” real estate investors? Simple, there are constantly the big “Guru’s” hitting cities every weekend telling people to get into the real estate game. So if you are new, we want to arm with you with the best information to help make your adventures in Real Estate more rewarding and successful. If you are a pro, or have a few deals under your belt, in the future we will have more posts geared towards you.
In our first post “Tips For The New Real Estate Investor“, we touched on you making the commitment to become a full time real estate investor as well as making the choice to treat it as a business, even if you only have one rental property. In this post we will go a little farther indepth about how to make real estate investing your “full time job” and quit your 9 to 5.
Right off the bat, let’s set things straight. You aren’t going to be able to quit your job next week. Building a successful real estate business will take time. No pipe dreams here. However, if you are a stay at home Mom or Dad, you should be able to devote more time to your new business, depending how many children you have and how old they are 🙂
Make A Plan For Your Real Estate Investment Business
If you do have a 9 to 5 job, you will have to have a plan and not just wish that someday you will be able to quit and live the dream. This was covered pretty well by Mark Ferguson on InvestFourMore.com:
How do you actually quit your job and get into real estate full time?
The first thing you must if you want to quit your job is make a plan. You cannot wish that, some day, you will make enough money to quit and hope that day comes soon. You need to make a plan that states:
- How much money you have to make from real estate before you quit.
- How much money you need to have saved before you quit.
- How much passive income you need versus earned income.
- When you plan to have all this and what date you plan to quit.
By making a plan and setting goals, this will all become much more real and help you achieve it much faster. I also wrote a book to help you set goals, manage time, and be more successful. You can find it here: How to Change Your Mindset to Achieve Huge Success: Why your attitude and daily habits have more to do with making more money and having more freedom than anything else.
Another thing that will help people get into real estate faster is making money in the business. Rental properties are great for passive income, but buying them and building up a significant income from them can take time. If you can make money as a real estate agent or from flipping houses, you will be able to quit your job much faster. You will also be able to increase how quickly you buy rentals because you are immersed in real estate.
Read Mark’s Full Post “How to Become a Full-Time Real Estate Investor“
There is a lot of really good info in that post, as well as a video where he explains his path. The thing we like most about his post is that he reinforces that you have to have a plan!
The next thing, which is really important especially if you are the bread winner in your home is – money. How much money do you need to quit your regular job? While Mark touched on a few things in his previous article, we also found some great advice on MashVisor.com:
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.
Read the full article “When Can You Quit Your 9-5 Job to Become a Full Time Real Estate Investor? “
That is good advice. However, we know it will depend on how large your family is as to how frugal you will be able to be as well as how much you will be able to save.
Here is the good news. If you are wholesaling properties, you can quickly “stock pile” some cash. Our advice is to take those profits and reinvest that cash back into your business for more advertising such as digital marketing (our favorite), mailers and bandit signs. If you have the cash for fix and flips, you will be able to create more cash even faster, provided you don’t drag your feet getting work completed and have high holding costs.
It really is pretty simple to get into real estate investing full time, but will take some time. The most important things to do is have a plan, and save some cash! Now get out there and make it happen! And if you are looking for a fix and flip or buy and hold, check us out at MPGDeals.com