Transitioning to Real Estate from Self-Employment (Non Real Estate)

[Drew Clements]

Listening to podcasts and reading articles, etc. it's clear that investing in real estate while simultaneously holding a full-time job is possible and common. But I'd like to target this question to a more narrow population and I really hope there's some of you out there...

If you are/were self-employed (and have employees under you, and possibly share ownership with partners), how do/did you invest in real estate at the same time and/or ultimately transition into real estate full time? Any particular strategies? What did you find difficult? What did you have to give up/change? How would you do it differently, etc.

I love being self-employed, but my business model (advertising agency) makes it nearly impossible to remove myself without staffing up in a big way... which has it's own challenges. So I feel like I've maybe painted myself into a corner. Anyone else have this experience?

It often seems impossible to escape during (and even before and after) regular business hours, so I'm not sure how I'd go about business on the real estate side.

Right now, I'm rehabbing a duplex nights and weekends (my first property), but that's no fun... so just reaching out for ideas and advice from those of you who have "been there".

[Victor Menasce]

I've made the transition you're describing. I've noticed a few things along the way:

1) Real estate investment is a business. In fact it is a pretty big business involving big numbers. Business is a team sport. If it's a solo sport, then that's called self employed and isn't a business any longer.

2) Most investors start with a little investment capital and limit the size of the business based on that small capital. They don't have enough money to do big projects. Small projects don't make enough money to fund hiring a team.

3) Unless you learn how to raise capital, you enter an orbit that you can't escape. The business will stay small. Developing this skill unlocks your growth.

4) Unless you aim bigger and start with a cross functional team, you won't develop the skills in the business to grow.

5) You need 5 distinct skill sets in your team
A) finding deals
B) deal analysis
C) raising capital
D) construction and operating management
E) sales and marketing.

Some people say "I'm a contractor, or I'm handy so I'll start rehabbing houses". Well that may get a couple of projects done a year. But it's only 1 of 5 necessary skills. You need the other skills to grow.