When can I go full time?

Question

I have some very high goals in mind for where I want to be in 20 years, but I'm just wondering how long it might take a savvy investor starting with zero properties and $20,000/yr in disposable income to realize enough income from investment properties to devote full time towards investing? Ie...

...how long did it take before you quit your day job???????

Robert Leonard · Answer

@jason aycock If I were in your shoes and I had a decent paying job, I would set a goal to buy 2-3 buy/hold properties a year while keeping my full-time job.  Avoid consumer debt and make sure my credit score stayed high.  Learn how to manage my own rental properties.  Live well-within my means by never borrowing as much as creditors will allow for a personal residence or on cars.  Take advantage of the opportunity to leverage your income to buy properties using your job income and personal credit.

Carry high amounts of insurance coverage to protect your minimal assets until they grow enough to need an LLC for asset protection.

Delay the "good things in life" to buy assets (properties and ROTH IRA investments) that will provide streams of income for years to come.  Buy a property instead of a boat or membership to a golf club and about 15-20 years down the road, you will be able to buy the boat for cash (if you still want it) and/or golf around the world.

I would keep working my job until it just doesn't make any sense to hold a job that somebody else needs more than you do.  If you don't enjoy your job, capitalize on what it can do for you in your REI business and check out ASAP.  That's my $.02.

Michael Seeker · Answer

...I haven't yet, but I was able to about 2 years ago (3 years into investing with less than $20K disposable to invest starting out).

Being able to quit your day job is a great feeling - but being able to keep that income and use it to qualify for loans and purchase additional properties is also a pretty great feeling.  Had I quit 2 years ago, I could have maintained my lifestyle quite well and probably purchased a new property every few years to give me a bit of a boost.  Like you, I have pretty aggressive goals though.  By keeping my job, I've significantly increased my lifestyle while simultaneously being able to grow my REI much more aggressively.  Just something to consider before you start thinking about quitting!

If you have a set dollar amount you want to achieve, it will be a lot easier to determine how long you'll need and how well you're progressing towards it.  If you make $60K after taxes today, and are putting $20K of that to REI, do you want to just replace the $40K you live off of now or do you also want to replace the $20K you're investing ($60K total)?  There are a lot of factors that come into play - as somebody else mentioned...do you like your job or do you want to get the heck out of there ASAP?

I will probably quit when my day job starts interfering with my REI (meaning I miss out on deals or have trouble completing rehabs, etc.).  Right now, they complement each other pretty well, so there's no need to quit.

Brie Schmidt · Answer

Michael Seeker brings up a good point.  Have a steady W-2 income is a huge benefit.  We (my husband and I) are working to both quit our jobs.  One of us would have been able to last year but we know how easy it is for us to get loans with both of us working.  Without it we would need to wait at least 2 years for our 1099 income to be on our taxes to count it.

Jordan Thibodeau · Answer

@Glenn McCrorey Michael Seeker Excellent posts. Agreed.

Also, once your determine your desired RE monthly income number, include ample wiggle room for unexpected invents (Market Down Turns, Mass Vacancies, Personal Expenses etc).

Glenn McCrorey · Answer

I agree with Robert so won't repeat it.  I started investing 10 years ago and now have 23 units.  I took 15 months off between jobs starting 1/12 which was a little slice of heaven and wouldn't have been possible without the passive income.  Now I'm back to work and adding assets so I can retire in a couple of years (I'm 49).  Have you read Tim Ferriss' book The 4 Hour Work Week?  As he suggests, I now work from home which makes managing real estate much easier than being "at work" somewhere.

Good luck

Mike Hernandez · Answer

@Robert Leonard, That is great advice!!

@Jason Aycock, It's awesome that you have goals to start with. Keep the end state in mind, and with hard work you will be on your way to quitting your job.

When can I go full time?

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