Should You Do Real Estate Full-Time?

Many self-acclaimed real estate gurus state that everyone should quit their jobs and immediately jump into full time real estate investing. They often claim incredible results from students with little experience. We would like to caution that life-changing decisions are not usually simple and that full time investing is not for everyone. Let’s discuss some pros and cons of full-time versus part-time investing.The Full-Time InvestorEntering into the real estate profession on a full-time basis offers several advantages over a part-time commitment. Being successful requires you to develop knowledge in many aspects of real estate, and more time focused on real estate leads to greater knowledge. The more your learn, the more you earn, since you do not need to rely on as many professional services or partners for help. You also learn to recognize a deal (or a dud) faster, which gives you more time to do more business or spend with your family.As a full-time investor, you work your own hours. When we say “full-time,” that may mean as little as twenty hours per week if you are good at finding deals. The rest of your time can be spent pursuing other vocations or hobbies. Or, if you are so inspired, you can work forty or more hours and use the extra cash flow to buy rental properties or diversify your holdings in the stock market. The point is that you need to satisfy your cash flow needs before you can start “investing” your money.One final point you should consider is whether you want to be “self-employed.” If you have always worked for someone else, being your own boss sounds very attractive. In some, respects, this isn’t quite the truth. Being your own boss means being an accountant, bookkeeper, stock clerk, receptionist and office manager all-in-one. You have to do deal with tax returns, payroll, office supplies, customer service, bills and all the other hassles that come with a business. You don’t have friends to chat with at the water cooler. You don’t have paid health insurance, a company car and a 401(k). You take your problems home with you every night. Sound like fun? It is, once you learn how to master your time and run your business. Being the master of your own life and career is well worth the other hassles of dealing with your own business.The Part-Time InvestorThe part-time investor holds a “regular job.” This may be by choice or for the time being until his real estate ventures are bringing in enough cash to quit his job. If it is the latter reason, don’t quit your job because the real estate “guru” told you so. Quit your job when it is not worth the income that it brings you. In other words, if you are making more money per hour flipping properties on the side, you are at the point that where your regular job is costing you money. Only then, is it time to quit!One of the advantages of starting out part-time is that you can maintain cash flow while learning the business. It may take weeks or possibly months to find your first deal. That same deal may take several months to turn around, especially if you decide to fix it and sell it retail. Think twice before telling your boss you’re leaving; you will have plenty of time to make the career switch once you have real estate experience. You may, on the other hand, like your occupation. If so, continue to work at it, and invest in real estate on the side.The best case scenario, if you are married, is to have one spouse work a regular job. The other spouse work the real estate business for creating wealth, retirement income and a nice college fund for the children. Of course, in today’s market, you could be laid off due to unforeseen circumstances. If you earn additional income flipping houses and invest the proceeds into rental properties, you will be covered if your main income is lost. This is especially the case for married women that often forego a career and raise a family, only to find themselves divorced with no means of making a living. We don’t want to sound cynical about marriage, but with a fifty-percent divorce rate in America, it never hurts to have a system for making money.Someone with a full time job tends to have little free time to focus on real estate. A part-timer should learn most of the same skills as a full timer. Thus, the key disadvantage to flipping properties on a part-time basis is that it takes sacrifice to learn the business. Something has to give; television, lazy weekends, meaningless hobbies and even some family activities must be compromised. As with any education, time spent learning about real estate will bring its own rewards, especially if the people in your life understand your goals and your plan to achieve those goals. If you are married, make sure your spouse reads this material with you and participates in the fun process of making money.Treat Real Estate as a BusinessPeople are lured to real estate because of the quick buck that it promises. Don’t hold your breath, you won’t get rich quick. An “overnight sensation” usually takes about five years. More than ninety percent of the people who take a real estate seminar quit after three months. Real estate investing should be treated with the seriousness of a career. It takes months, even years for a business to cultivate customers and have a life of its own. You need to treat it like any other business.

Create an Explosion of Cash in Your Real Estate Business Today!

If you do an Internet search for “real estate investing” you will come up with a plethora of ‘gurus’ telling you that you can make millions with their magic formula. Most of them will tell you that you can do it with very little or no money down-just make sure you send them money for their ‘secret report.’I am a successful real estate investor and I have built my portfolio with little money and I have never owned many of the properties that I sold. However, I didn’t have a magic formula or thousands of dollars in my pocket. I worked hard, listened to some smart people and chose the easiest way to make money in real estate investing. The method I used is well known among those in the “industry” but many have never heard of it or know how it works. I am talking about wholesaling. This is not the kind of wholesaling that Sam Walton began at his famous warehouses. In fact, you don’t need an inventory of homes to be a wholesaler. And you can begin with as little as $10 in your pocket.After learning the concept of wholesaling, you may think it is pretty simple. Some deals can be. But to consistently make money as a wholesale investor, you will need certain skills and non-monetary assets which I will explain.Wholesaling DefinedI will explain what wholesaling is with an example of how it works. John Doe has a house for sale. The house may need some repairs or it may be in a neighborhood that is not very desirable. You know that Jack Smith is always looking for good investment property. For some reason, he may have seen this house or he may just need to be sold on its value. But if you just introduce the two, you won’t make any money.So here’s what you do. You approach John and tell him you would like to purchase his property. All he has to do is sign a contract allowing you to do so. You make him an offer and always put down as little earnest money as possible. I always put $100.00 down on my contracts and usually the owners never say a word about it!With the contract in your hand, you call Jack and tell him about this great investment property you have found. You meet him at the house and quote a price that gets John his money and you a sizable commission. If you were right in assessing that Jack would love the property, it will probably be an easy sale.Let’s just say that Jack decides that the property is not for him. If you are a good wholesaler, you will have other buyers on your speed dial that you can call and you will have a buyer for John’s property in a matter of days and a hefty commission in your pocket. And you will have never owned the property!!How to be a GREAT WholesalerThe above example illustrates the only skills you need to have to be a great wholesaler.
o You must have an eye for a great deal. And the best deals are not found in the MLS listings. You can be driving to your office and see a “for sale” sign on a property that has been there for several months. That seller is probably motivated and will likely listen to you if you approach them about selling the property. Make sure you calculate the “after repair value” (AVR) to make sure it is truly a great deal.o You must have great people skills. Call this being a great salesperson or just being a “people person” but the better you come across to the buyer and the seller the more successful you will be. Remember, most people can spot a fake a mile away. Be sincere and up front with you buyer and seller and you will do well.o You must have a great list of buyers and sellers. You can generate a great list by networking, running ads in local publications or cold calling. Without a great list of buyers and sellers, you don’t have a business.One final note-you may think you have to have a realtor’s license to wholesale but you don’t. Just make sure you have a viable contract with the seller and you can start making money!Expect Abundance and Nothing Less!!!