Learn how to flip and keep the job?

Question

I currently have a pretty good job as an IT Project Manager at a large company. I'm positive I don't want to be waiting around 25 more years until my 401k catches wind of the compound interest that's on the way. I'm looking to work for myself. The issue is I'm a one-income household with kids that don't leave a lot of time in the day. I'm also 0 percent of a handyman.

What are some ideas on how to transition out of the "good" full time job and into paying myself for a living?

Account Closed · Answer

The whole 2008 crisis was about lenders losing their money. Countrywide, Washington Mutual, Lehman Brothers, all collapsed and went bankrupt.  Be careful how you lend. It sounds easy, but as a previous lender, I learned the hard way that making too many assumptions about the future puts your money at risk.

Instead, It's actually kind of nice to have an asset (a property) in times of rising interest rates and rising inflation.  If you believe interest rates or inflation or lending will always be safe for the future, then by all means lend away to your hearts content. However, if you believe that what has happened in the past (and has happened many times) is possible to happen again in the future, tread lightly with lending.

Account Closed · Answer

Turnkey means you are buying a property that is already producing income.

Various Turnkey companies have various levels of service so it is important to ask the detailed questions.

It's faster and easier and has better tax write offs  than looking for a property to flip, hiring contractors, fixing up the property, hiring a real estate agent to sell the property for you as in the flipping process.

Account Closed · Answer

Flipping is risky, expensive, highly taxed and requires your attention.   You are a good candidate for a Turnkey. Here is how it should work, and how we do Turnkey's though there are several Turnkey providers on BP that do things differently.

Average Turnkey Cash Flow Per Door In Phoenix Metro Area No Bank Needed

https://www.biggerpockets.com/forums/600/topics/584916-average-cash-flow-per-door-in-phoenix-metro-area

Curtis Curley · Answer

Thank you to everyone who is contributing.  I’ve completed some maps on how I would reach my overall goal and the testimonies are the key to validating options.  Keep them coming.

Timothy Lewman · Answer

@Curtis Curley I have a full time job in corporate America as well.  I have a flip under my belt.  I put in $39,000 on a $219k house and did a 50/50 equity split with the contractor.  I met him through my real estate agent, who is also his agent.  I didn't do much, went and checked on it every week or two.  Really, very passive investment.  I am now working with him as a private lender.  Lent him $33,000 and getting $500/month and 20% balloon payment, $6600, when the house sells.  I'm also helping to keep the accounting books, trying to learn more of the business and getting paid to learn!  You can do it. Think about what else you can do to add value to a deal to get a higher return.

James Canoy · Answer

@James Canoy

https://www.biggerpockets.com/blog/2016/07/03/subject-to-real-estate/

James Canoy · Answer

@Curtis Curley another option is as a lender to an apartment syndication project. Many of them have a minimum buy in and most of them seem to require you to be an accredited investor. Rates of return vary. And you need to do your homework.

Flipping or rehabbing does take time. But if that’s what you are interested in don’t stop just because the internet said so.

It is imperative that you keep reading and listening to podcasts. You’ll pickup on different strategies this way. Such as buying a property which needs a spit shine only and “subject to” the current loan. Then selling it as a “lease option” to someone else (in which you are a bank and just receive a mortgage but don’t fix anything).

Curtis Curley · Answer

@Caleb Heimsoth How much money would someone need to be a private lender?  What kinds of returns do people get from it?

Mike McCarthy · Answer

+1 for the turnkey approach.

Other option would be to go out and find a good property to rent and learn to be your own property manager. It takes time and work, but is generally doable with another job. You just need to be interested enough in it to learn the laws, treat it as a business, and not just a landlording hobby.

I agree, a flip is a LOT of work in the best case. I did one a while back with a FT job and it was rough - worth the learning experience, but definitely didn’t make enough to make it worth the time I put into it.

Caleb Heimsoth · Answer

@Curtis Curley my initial suggestion would be lending money out.  Basically become a private lender.  If you have zero time, dealing with tenants is not great.