Self Employed vs. Corporate World?

Question

I am currently a college student double majoring in Finance and Management Information Systems with a minor in Real Estate. I have enjoyed it, but I have very little desire to work a 9am-5pm job in the corporate world.

Also, I recently got my real estate license in the state of Utah and I am very passionate about the Real Estate industry. Ideally I would like to get into Real Estate Investing, doing rental properties and flips. However, sometimes I feel like if I don’t go into the corporate world I may be “cutting” myself short because I’ve put all this effort, time, and money into school.

But I love the idea of being self employed and would love to pursue a career in Real Estate!

Should I do both? Or focus on being a Real Estate Agent/Investor?

Thoughts?

Kaydn Jensen · Answer

Jaden, what's up man. I am in the same situation you are. I am about to graduate in accounting and recently got my real estate license over the summer. I quit my job and was working as a real estate agent over the past few months but recently went back to a W2 job because when you're self employed you have to show two years of self employment income to get a loan. That means you have to be creative when buying real estate especially rental real estate. I plan to build up a portfolio over the next few years as I work and gain more general business experience. Then once I have a track record of successful investments and have a better understanding of how to run a company I plan to jump ship and start my own company where I will scale quickly. I think that either route you go you will end up in the same spot if you have clear goals and chip away at them everyday.

Jaiden Olsen · Answer

The Grass is always greener on the other side. I've talked to a ton of real estate agents who say something to the effect of, "You are so lucky you have that W2 income! It must be so easy to find money!" But being on the other side of that, I'm thinking, "Man it must be so easy to find deals, you have all the time in the world to focus on this stuff." When it comes down to it, it is a personal decision. Remember that whichever direction you choose, it isn't easy either way. It is still hard work. You can never go wrong investing in  your self. School isn't fun. But I'm a fan of sticking to it. There is no reason you can't pursue your real estate dreams, finish school, get a good job, get experience in a 9-5 job, and pursue the goal of early financial freedom! Good Luck!

Andrew Angerer · Answer

There is no reason why you can't do both, I still work my W2 job while putting many hours into real estate investing.  It helps having some money (although low and no money down techniques work sometimes) but being able to prove to a bank that you have income is sometimes all you need for getting a loan.

As far as cutting yourself short, that's only  for you to decide on, don't let anyone influence you to think that you are not going on the right path. Having passive income trumps working 9-5 any day of the week.

Best of luck!

Ray Estrada · Answer

@Jaden Connor wouldn’t hurt to do corporate world for a bit. You will learn a lot and gain some incredible experiences l. With that said have an exit strategy in real estate. I’m 36 and absolutely burned out in corporate life and just recently discovered investing in real estate. If I had a do over I’d invest more money at a younger age instead of blowing my cash on items that don’t add value to your life. Cheers and good luck!

Chad Kastel · Answer

Going in to the corporate world simply because you put all this effort, time, and money in to school is something called the "sunk cost fallacy."  You've made a mistake and then are going to continue on that path simply because it is a mistake.

That being said I give general advice to people in your situation.  Work your W2 job, save as much money as possible.  Get your real estate license (multiple revenue streams).  House hack a home (using FHA or FHA 203K).  Save as much money as you can and learn as much as you can.   Once you amass capital + have cash flow it will be very easy to exit the w2 job if you hate it and not have to worry about where your money is coming from.  This is especially true if you also have built up some clientele as a realtor.

By doing it this way you're building yourself a hedge.  Yes you might be starting a little slower on the real estate side, but you're also giving yourself many options for your future and building a good foundation.

Cherie Orellana · Answer

I think you can do both to start as well.  I have been a real estate agent / broker and investor for 14 years. My husband is in the corporate world but also invests in real estate and works weekends on our projects and we self manage. Eventually he will move into just real estate when we reach our goal of 22 rentals.  But I think doing both to start would be a good strategy.

Amy Kendall · Answer

@Jaden Connor Banks definitely love the stability of a W2 job, but one real estate agent/investor once told, "there is no easier way to fund your investments than with a nice commission check."  That has also proven to be true.  I think what you need is to have a solid plan.  My husband still works his W2 job and we live on his income.  We save all of my income as a real estate agent as well as the cash flow from our properties and use that to reinvest in more real estate.  It works well for us because we don't have to rely on the income of our investments.

What would be your plan to acquire properties?  Flipping and being an agent are really both jobs and are competitive.  Just because you commit to it doesn't mean you will automatically be successful.  You need a good plan.  Make a solid 5 year plan taking both approaches and be honest and realistic with yourself.

Also, how close are you to finishing school?  Maybe you finish school, then take a year and follow your dream of being an agent and investor.  If it doesn't work out as you had hoped, then you always have something to fall back on.

Douglas Larson · Answer

@Jaden Connor

The best advice I can give you . . . is to find a sugar momma! She can support you while you get your real estate business up and running! - worked for me!

Seriously though, I had a day job in healthcare for over 7 years and bought 5 SFRs and one townhome during that time. 2 of the SFRs were house-hacks and my tenants paid most of my mortgage. These homes were in San Diego and Maui. The W2 income sure helped with loan qualification. I quit my day job in late 2004, when I moved to Utah and married my "sugar momma." 2 years later, the rental and flip income allowed her to quit too! Does that make me a sugar daddy?!? Anyway, I have never regretted the education, but it became clear pretty fast that Real Estate investing was a much faster track to financial freedom.

One on my rentals was a nice home in N. Logan that would have made a great house hack! I think Cache Valley has some great potential. College housing, fix and flip, buy and hold, hacking, lease-options... The world is your oyster!

Have fun . . . and make your own luck!

Lauren Havens · Answer

There’s a million ways to get into real estate. I really valued my time in the corporate world in Utah. Learned a ton that has translated well to real estate investing which I now do full time. I ended up quitting after replacing income because I needed (wanted) more time off.

Utilize your w2 if you get one. Think about house hacking or getting a first position heloc on a property.

If you ever have questions I’m a fellow Utahn as well. Reach out if you have any Utah specific questions.

John Sharpe · Answer

Go for a W-2 job for a couple years so you can at least buy a property, or 2, or more, during that time before heading out on your own.  A mortgage for buying your primary residence while having W-2 pay stubs will probably be the cheapest loan money you'll ever get.

Self Employed vs. Corporate World?

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