Age Old Question: Should I Get My License?

Question

I am new to the real estate world. I have read a few BiggerPockets books and indulge as much as possible in podcasts, this website, YouTube videos, etc... in order to learn as much as possible about this industry. I have decided that I will pursue investing. My goal is to own multiple properties and generate financial independence through real estate investing.

Currently, I own a consulting business and work for myself. My monthly income ranges from 7k-10k. I know that this seems nice but it is in a field that I do not want to work in for long and the stress of the work I do is something I am not passionate enough to endure. So, real estate is where I want to go!

I have managed to get a little bit of a savings (close to 25k). This I will use to get started in investing. I have bad credit that I am working on repairing. I have a very low DTI ratio. And I am a people person with enough motivation to power a ship. lol.

So, here is my worry: I want to make the jump and invest myself fully into real estate property investing but I am worried that I will run out of money and go belly up fast. I was pondering the idea of becoming an agent during my first few years as an investor to network further with the real estate community and provide some sort or paycheck as a safety net for me along the first few years.

Thoughts?

Nathan Gesner · Answer

My short answer: stick to your current job while you get started with investing. Don't jump ship until your investments are generating enough income to at least keep you afloat at the bare minimum level.

Your $25,000 will provide you 3-4 months of living expenses, maybe six if you're frugal. How do you know if you'll even like real estate investing? How do you intend to produce enough income to live on in less than one year? If you bought five pigs with $5,000 down on each and they cash flowed an astounding $500 a month, that's still only $2,500 a month to live on. And it's almost impossible to find properties with that little down and that kind of performance. You're more likely to find properties that cash flow $100 a month.

Stick to your job, learn to invest, build a portfolio, and then jump ship when you have at least 75% of your living expenses covered AND an emergency reserve on hand.

Carl Flint · Answer

@Sean O'Dowd

Wow, thanks a ton. Your response gives me confidence in moving forward. Really, I can't thank you enough. I am going to take that with me: "If there is something (anything) I can do to increase my odds of success, it's worth doing."

Thank you for your help.

Asif Vavanan · Answer

Here is my advice:

1. Keep the current job and keep that income coming.  Trust me its not easy to be in real estate investment without a constant income coming every month to cover you basic needs.

2. Getting the license will def. help in the long run.  I do not have mine yet, but i have an amazing agent that i work with who gets me the details.  Getting the license will have its own benefits, you can see as many houses as you can without waiting for agents and the more houses you look the easier it becomes. Keep your current job, and you have to overtime as an agent during weekends and evening time to show houses to other or yourself.

3. The first deal will always be the hardest, so use logic and make sure to run your numbers.  You will never going to hit home run on the first deal. Just look for a base hit and get experience.

Good Luck with everything.

Sean O'Dowd · Answer

Hey Carl! Congrats on getting ready to make that next move-it's a jump that not everyone makes so worth acknowledging that right off the bat.

Your story resonated as I actually was in the exact same place: working in my own consulting business before I went into real estate full time. If it's helpful, the way I thought about it was: if there is something (anything) I could do to increase my odds of success, it was worth doing.

In this case, it feels like getting your license is something that would increase your odds of success as an investor. In my mind, it makes it seem like a worthwhile investment in your own investing career.

Hope that helps!

Carl Flint · Answer

@Nathan G.

I appreciate your unbiased feedback. You’re advice is top notch. Thank you for helping out this in perspective. I like how you made me realize that even if I had one property that did well I won’t be financially untouchable.

Marc Winter · Answer

Nice back story.

My advice:  have 6 months to 1 year's living expenses saved, get your real estate license, and get training.  Do some listing and sales.  Learn the ropes.  Inspect properties every day.  It's the only way to really know market values.

If you do the above and inspect faithfully, you will come across a bargain and know what to do with it.

In the meantime, you may earn a nice chunk of cash as a sales agent.

good luck

Carl Flint · Answer

@Asif Vavanan - you bring up a good point. How do full time investors get health insurance? Like good health insurance comparable to policies you will get from an employer (PPO)?

Carl Flint · Answer

@Asif Vavanan - thanks for your input. After attending Turner's seminar yesterday, I can say I know exactly what you mean by a "base hit" lol.

Are you a full time investor?

Carl Flint · Answer

@Marc Winter

Thank you so much. I’ve read and re-read your response. Your input sincerely helps me. It’s refreshing to get such a clear cut answer. Thanks again.

Age Old Question: Should I Get My License?

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