A little advice on starting out with my current position?

Question

Hey everyone, so I’m just starting my RE investor journey in the inland empire in Southern California, I’m looking to use the BRRRR method with either a partnership or hard money if it’s possible in this market out here. And I’m wondering if it’s a good idea to start looking for deals and try to get my first deal while I don’t have much of an emergency fund saved up nor a savings? I read Brandon and Josh’s  book for beginning investors and have taken what I learned on managing finances and budgeting and started applying it to my own finances. But at this rate with my current earned income and expenses. I project it will take about about 2-3 years to get a safety cushion set up with an emergency expense fund for 6 months and a decent savings of atleast 50k and I feel that’s too long of a wait to get started. Is it best to wait till I have my safety net set up to start getting my feet wet, or is it okay to jump in with no safety net? Any advice would be greatly appreciated!

Jaron Walling · Answer

If you're new to REI, don't have experience, and are still learning the numbers 2-3 years is realistic. Without the base knowledge and understanding of pitfalls it's easy to fail. The first few properties are challenging (flip, BRRRR, wholesale). Don't discount the facts and get risky especially now since market prices are crazy.

It took me 2 years to save money, realize I had skills for rehab, and study my market instead of just paying someone else to live in it. HYPER STUDY a city<neighborhood<streets and know what a deal looks like. If you can save during that time and get connected with locals (investors/contractors) you'll be on the right path.

Emmanuel Gonzalez · Answer

@Peter Mckernan Thank you Peter! I will follow that advice being the my barber job/business allows me to get maximum results with minimal time and effort. I think the advantage my Barber job gives me will give me time to focus on wholesaling being that I don’t spend more than 30 hours a week at my job cutting hair currently and am able to bring in about 4.5-5.5k a month thankfully.

Peter Mckernan · Answer

@Emmanuel Gonzalez Yes, wholesaling take awhile to build up and get it to a place where you feel that it is a solid business. That is great that you know that it will take a lot to get to a place to be successful at it, because a lot of people think it would be an easy business to start and run.

I agree with @Michael Plante how much a second job takes, and where that second job can take you once you are banking money from one and living off the other. That is currently what I am doing too and it's a lot of time and effort along with patience to get you to that place of being able to invest let alone retire.

If I were in your shoes work two jobs, one W2 and the other commission (real estate specifically) to gain some knowledge then build your emergency fund and in a year to three years you'll be a well oiled machine ready to get your real estate business completely full time!

James De Leon · Answer

@Emmanuel Gonzalez

Yes, it definitely is smart to have some cash reserves when starting off just so having that back up can alleviate some stress. As for your girlfriend who doesn't support the house hacking yet, just keep trying and letting her know the benefits of that strategy.

Peter Mckernan · Answer

@Emmanuel Gonzalez nice! Good, that is a perfect way, shoot me a DM with your info for the barber shop you work at!

Emmanuel Gonzalez · Answer

@Michael Plante I’d probably cut that time in half working two jobs.  I’m considering working two jobs or just scaling my Barber business higher again and focusing making money on the side in RE maybe trying wholesaling since they’re isn’t much of an overhead I hear. I currently charge $50-$65 for my haircut services make about 4,,500–5500 a month and net about 50-60k a year working about 20-30 hours a week(only work those little hours cause my schedule doesn’t get completely booked as of yet with the prices raise I made a little awhile back).  And I have a system that allows me to scale my Barber business higher in shorter time so I’d like to utilize my advantage with barbering cause it allows me to put minimal hours in and get maximum results back. I figure now since barbering clears up some free time I could use that time it frees up to try wholesaling?

Emmanuel Gonzalez · Answer

@Evan Polaski I hear you, and appreciate the advise. You know normally I go for broke when it comes to taking risk when it’s just me involved being that I’m young and at the bottom already. But I got back with the mother of my child not so long ago and live together and I can’t risk their well being. So being patient will have to do! Thank you so much Evan for clarifying the pitfalls

Emmanuel Gonzalez · Answer

@James De Leon I appreciate the advise firstly!

Yea that’s one thing I haven’t considered much is the risk involved. I think it would be a safe bet to atleast have some cash reserves now that you mention it to atleast offset half the risk that could be incurred if thing did go wrong if I do get partnered up with someone I have in mind. That way I don’t leave too much of a burden on my partner. With that said I will take the time to save a little safety net.

House hacking was definitely my first option, but I’ve had a hard time convincing my girlfriend/mother of my child of the benifits we would gain from house hacking. She’s not sold onto the idea, she has the shiny object syndrome and wants the nice single family house with a picket fence. Yes

As for wholesaling I have considered it but I hear it takes up a fair amount of time if you want to run a successful wholesaling business that I probably don’t have at the moment with my crazy work schedule and trying to make time for my family.

I will definitely take you up on that offer once once I’m really postioned to hunt and land my first deal!

Michael Plante · Answer

How long if you work 2 full time jobs?serious question because I often worked 2 full and sometimes 2 full and one part time to get to retire at 48168 hours in a week

50 for sleep

85 for work

Leaves over 30 hours for laundry, YouTube and gf or bf.  That is more than enough

work 2 jobs. Live on the income from one and bank the other

Emmanuel Gonzalez · Answer

@Jaron Walling Yea you’re right the pitfalls and challenges are things I haven’t taken much into consideration. I think I’m getting driven by fomo more or so and feeling like I’m behind for my current age. (26)

This is where my patience will be tested I suppose, I’ll use that time in the mean time to hyper study analyzing the numbers and my specific market as you suggested and get positioned correctly. Thanks man, I really appreciate the advise.

A little advice on starting out with my current position?

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