Is it Possible for my Dad to Leave the Rat Race?

Question

Hi BiggerPockets,

I was recently having a discussion with my father, who is 60 years old, about leaving the rat race and starting to work for himself in real estate. He has been a Chief Marketing Officer at several different large companies over the last couple decades. Additionally, he has a keen eye for real estate and the work required to fix a property.

He is aware of the buy and hold strategy (which I currently employ); however, he is skeptical about the prospect of Real Estate becoming a full time job that can support his life style (approx. $150k post-tax income /yr would be his requirement). I explained to him the principles behind flipping and wholesaling and he was able to grasp those concepts quite easily.

If he saw opportunity here, he would work full time in real estate with the help of my mother and I.

BiggerPockets community: What do you think? Can he do it? How long would it take him to earn $150k in annual income? What might an operation earning that amount of money look like? Thanks in advance!

David Goossens · Answer

Why don't you use your dad as a private money investor, for your flips and/or buy and holds. That way he gets a taste of investing without having to do very much, while you get to grow your business/gain more experience. After he sees you out there doing deals and making money, he might be more inclined to get involved.

Darren Eady · Answer

Introduce him to performing notes before bringing properties to him to flip.  I've found their are two types of investors 1. Passive 2. Active.  My clients that are passive investors love receiving 12% on their performing mortgage notes and would not like to own properties (too much time and risk involved - they would say).  My active investor clients and family and friends purchase properties from a different contact of mine and don't mind working with property management for the higher returns and appreciation, even if the property has some set-backs and vacancies.

Ultimately it is difficult to give anyone else your passion about real estate, but I've personally found that my performing notes can interest attorneys, engineers and controllers of companies that typically scrutinize home deals until they are dead.  Performing notes are an incredible investment tool, with so few moving parts, that everyone with money seems to love that are looking for an investment about 7 times better than their current mutual funds and 20 times better return than at their bank.

Michaela G. · Answer

Probably only 1% of those who are really keen on getting into real estate and who go to hear speakers and seminars ever buy their first house.

So, I would say that it would be pretty impossible for someone that is not even convinced himself, that he can do it. You can't make him. It takes the right mindset.

I know you love your dad, but if he doesn't think he can do it, he won't be able to do it.

Justin Taber · Answer

@Jeremy Drawas I'm not saying he shouldn't but its something to think about.

Justin Taber · Answer

@Jeremy Drawas Does your dad want to get into real estate full time, though it can be much more passive than a full time job it is still a job.  Also, it sounds like he has been very successful in his career and wouldn't have much time left, would he want to justify his and your mothers retirement because he couldn't wait 5 years to retire the way he had planned?

Jeremy Drawas · Answer

@Justin Taber -- To answer your original question, he is looking for a full-time opportunity.

Jeremy Drawas · Answer

@Justin Taber -- My pops is in between jobs at the moment and I think he feel frustrated and nervous about his retirement prospects. He has saved up a decent amount of money, but not enough to retire the way he wants. If he could land another good job soon, he could retire in ~5 years or so... But he's getting old and companies these days aren't always looking to hire 60+ year-olds.

I guess the easiest way to put it is that he wants to control his own destiny and starting his own company is his best bet at accomplishing that.

Jeremy Drawas · Answer

@Darren Eady -- Thanks for your thoughtful response! You are right that you can't instill a passion for real estate in another person. He came to me wanting to start his own business, but didn't know what to do. I told him that there were many viable business plans in RE and he seemed interested, but I think that this is one of those "lead a horse to water" type situations. Perhaps he will dive deeper into RE, probably not.

On another note... Could you explain what you mean about performing notes?

Jeremy Drawas · Answer

@Michaela G. -- I didn't mean to ask if I could convince him to do it; rather, if he convinced himself to do it, would it be possible? How long would it take him? What would that journey look like for him?

@David Goossens -- I am already doing buy and holds and he has seen my success, which is why he's come to me for advice on how he can start his own business. He has a lot of time on his hands now, as he his not working a full-time job at the moment, so I would be willing to help him do it (flip homes), but I don't have the time to flip myself (my buy-and-hold strategy already takes up enough of my free time).

Perhaps I should have framed my question differently: For those who have created a full time job out of flipping houses, how long did it take you to get up to $150k/year in income and what did that journey look like?

Is it Possible for my Dad to Leave the Rat Race?

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