When do you Leave your W2 for Investing Full Time

Question

I have 4 kids, 4 dogs and a big house to keep up on. I work full time as a Contractor at WPAFB making 100k +. Current contract ended and I'm on the job hunt again, I was considering doing REI full time but don't feel like I'm set up to switch to REI full time and don't think I would come close to the salary I was making. From 2018 to today I have completed 5 rehabs, 1 owner finance deal, and have one stud up rehab 90% done and house hacked my personal property. Due to the city changing their stance on STR I can no longer House Hack. But I have extensive knowledge on STRs and had a great success with mine when it was in operation.

At what point do you decide to switch to working for an existing REI group and or going it alone? As far as education I have a Masters in Business Leadership, have listened to 200+ of the BP pod casts, have read Rich Dad Poor Dad, Cash Flow Quadrant, Never Split the Difference, Quit Like a Millionaire, The Richest Man in Babylon, The Book on Investing in Real-estate with no money down, The Seven Habits of Highly Effective People, The 8th Habit, Mind Set, You are a Bad ***, Un**** Your Self, **** Your Feelings, Third Circle Theory, How to Win Friends and Influence People, The Heart of a Warrior, The Book on Rental Property Investing, and the 3 Day Effect. (probably a few I'm missing in there.) Normally I go through each book about 3 times on Audible before moving on to the next book. I know how to manage and lead people, I can do electrical and plumbing, drywall, paint, trim, flooring (except Tile but I bet I can if I ever tried it). Never done siding or roofing before. And I have all the tools to do all those things.

I feel like I would be in a better position to do it on my own in another year from now, when I started I used a personal loan to do this, I still pay on that loan. Once this flip is done I could pay it off but then I'm back at square one with no money to do flips. If I was single and didn't have a house and car payments etc.. I would 100% go for it.

Henry Clark · Answer

There is to much going on and to long to get in depth. Take anything I say and adjust it based on knowledge base of your situation. Don't worry about responding to me, point by point.1. Learning more, whether on the ground or textbook is not your issue. If anything you may hurt yourself. Your going to reach a level, where even if you can do the drywall and could save money, you shouldn't. Otherwise you stay an hourly employee, even if your working for yourself. Plus time management with the family or working on the next deal.2. Personal side- finances and 4 Kids. I am probably totally misreading your comments. Adjust to fit your knowledge base, versus giving me more info. Sounds like you did a lot of work but the end result is no cash or investment? But I look on your background and it looks like you have a lot of REI investments, which becomes a question, to what degree are they cash flowing. Obvious- On the kids side, they require time. On the REI side your could work till 12 every night and still have things to do. My point on this, is later your REI investment approach, will need to balance these. Example: You can't have three rehabs going at the same time, trying to do the work yourself and still go to ball games or say goodnight. Your REI investment style at some point has to become more entrepreneur and less physical rehabber.3. When to switch over. When your fired or between jobs, but have the financial backing to reach the "Goal" of REI investor only. Or, when you have a day job and an REI business, and you finally run out of time to do both. But you also have REI cash flow going to supplement. Never assume you will reach a point where your covering your salary. Your jump will be before you hit that number, which means you have to adjust your Personal finances for the 1 to 3 years till you get back to your number.Recommendation:Take all that you know and build a financial, deal, personal road map to the "Goal".Your at point "A". Define REI cashflow, debt load, cash on hand, etc. Family. Make sure your wife is along for the ride. Show her the roadmap.You want to get to point "B". Same as above.Now define how you get between A and B. How many deals? What type of Deals? What magnitude of deals? How much work do you do? Work hours versus family hours. They will never be balanced, but how do you make them work?An example output:I need to have 10 deals cash flowing $7,000 per year each. I need to add two deals every year. Or you stay salaried, but go for long-term wealth growth versus cash flow. Example: Want to have 5 investments I can cash out in 15 years for $500,000 net.Need to either get rid of or not do any cash flow deals under $x,xxx per year. Sucks up to much time and less return for the same amount of work. Only do these when you have a time hole, and do as a fix/flip for cash generation. Don't do with your money, do for another investor, so your not out cash.You have already done the above in your Masters Bus Ldrshp as an exercise. Just need to do for yourself.Once a month pull this map out and question your workload and approach. Cash is never an issue. Read throughout BP. A lot of East/West coast people looking to Ohio and the Midwest.Work the baby boomer crowd. Versus doing 2 or 3 deals in a year, you might do one that is 20 times larger. Look at Apartment complexes and Trailer Parks. I know of an 85 year old that has 37 SFH/MFH units. Something has to give for him and his family. Find those people in your area and get to know them. Give them more than money. Hire them at $10,000 a year and tell them you need "their help" working 8 to 12 hours a week. You can get to your REI full time level one SFH at a time or you might do it in one deal. Key point is to do your GAP analysis A to B; and force/question your approach. Otherwise your will work your butt off and be at the same place 5 years from now.Just need a road map. You got everything else. Experience, knowledge, reason to succeed, Cash is available and most importantly you don't mind jumping off the Salary/Hourly cliff.Catch you in 5 years.