Experience or Income?

Question

Hi everyone, long time listener and reader but have yet to begin my own investing career. I am hoping to acquire my first multifamily in the Boston area in 2024, but before I do, I have to decide on what direction to continue my career. I have a degree in mechanical engineering and ~5 years’ experience in the field. Though early in my career, I have progressed quickly towards leadership and project management positions. I have really enjoyed the project management work that I have done, and believe it opens opportunities in other fields of work. My current hope is that some of those opportunities might be in the real estate space so that I might begin to gain some experience while earning a primary income. This brings me to my questions:

Are there any jobs within the real estate space that you think I would fit in well?

If that job required me to take a pay cut, to what extent do you think the value of experience could outweigh the loss of income?

I would love to connect with anyone who has transitioned from engineering into the real estate industry as well as anyone in the Boston area who could offer any advice.

Are there any jobs within the real estate space that you think I would fit in well?

If that job required me to take a pay cut, to what extent do you think the value of experience could outweigh the loss of income?

I would love to connect with anyone who has transitioned from engineering into the real estate industry as well as anyone in the Boston area who could offer any advice.

Christian Ehlers · Answer

I would agree that if you like your work already, are advancing quickly in the field and have a good W-2 Salary then I'd suggest sticking with that a bit longer. Who knows what will happen with the economy this year and getting a commission job in real estate would likely keep you from investing in RE even longer.

There's plenty of people that work a job not related to RE but invest on the side and I think this is a great path especially in a market like today. Some jobs you could look into would be project management, deal underwriting, and things of this nature if you really want to change up the career path.

George Post · Answer

Hey @David Penco! If you are looking to house hack, and you currently have a steady w-2 job, I would stay put at your job until you land the house hack.  I think the market is going to be rocky this year, and a solid salaried job is a good thing for 2024. Most jobs in the real estate space are commission based (doesn't matter if 1099- or W-2, commission income would require a 2 year history for that income to count - usually). Furthermore like Randall mentioned, the NAR lawsuit does not bode well potentially for agents. For loan officers such as myself, high rates and low purchase transactions has force many LO's to find work elsewhere. If you found a management role or construction pm that offered a steady W-2 salary, I would pursue that! Just my take!

Always happy to chat - RE. I have 3 rentals in Hull and live in Scituate. 781-534-8071

Good luck!

Randall Alan · Answer

@David Penco

Hi David,

My question for you would be, "What is your goal in the real estate field?"  Broadly - Do you want to be an investor, or do you want to sell houses and such? (Those are obviously not the only choices there... but a starting point for the conversation.)  There is absolutely no need to move into the real estate field to make money in real estate.  My first analysis would be around your income level as of today.  If it allows you to invest in real estate, and you are happy in your current field - I would say stay in Project Management space and make money in real estate through investing.

I think realtors in are potentially in for a bumpy ride if the current NARA lawsuit turns out bad (ie. this is the lawsuit where NARA is being sued for 'artificially inflating housing prices', and their hold on setting commission rates).  If they lose that, I think you will see real estate agents go the way of the travel agents.  They will still exist, but in a much lower quantity where they have to surcharge their transactions perhaps, and technology platforms will take over (like Travelocity, and Expedia did in the travel space).  The theory being... why pay 6%, when you can achieve the same results paying 1-2% commission.  I personally wouldn't want to be moving into that part of the industry for a career with that type of uncertainty on the horizon.  There are of course a lot of other avenues in real estate... construction sales, commercial, and so forth.

I don't see a lot of cross over between a PM job versus real estate (myself).  But as a PM, you are obviously good at organizing timelines and achieving good outcomes.  One that comes to mind would be on the construction side of the business, such as a project manager for commercial buildings.  That would likely take some education to transition to - but it is the first thing that comes to mind as a 'good fit' utilizing similar skill sets.

I'm just an investor in real estate - my wife and I own and manage 37 rental properties as our primary job... but worked in corporate before all of that.

All the best!

Randy

Tatum Littleton · Answer

Good and fair questions David! I assume you have an analytical mind which would transition well into evaluating deals and doing due diligence in making sure a certain property would be a smart investment. Though there aren't necessarily specific jobs for that if you are happy with your engineering job, I would encourage you to do stick with that and look into analyzing deals on your free time to get familiar with the process and what is available in Boston.

Find some local meet-ups and find investors who already have a portfolio and ask what they do to analyze deals and see if you could potentially help them and/or work alongside them as they are researching so you can continue to expand your knowledge.

I hope that helped... I know it didn't answer your questions directly but gave you something to think about. Keep searching and reading the forums and getting familiar with the process, good luck!

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