Quitting Your Job is the WORST Decision for Newbies? Right?

[Scott Trench]

I've been seeing a lot of folks around BP that seem to be here with the express purpose of quitting their jobs to invest in real estate. 

The problem that I see, however, is that many of them seem to think that they can quit their jobs and invest in real estate to replace that income straightaway. To me that seems like a dangerously foolish plan. 

I get that quitting a job may be the right call for the 9-5er that has a truly poisonous existence at his/her company and wants to start fresh in real estate. On the other hand, I also feel like the majority of folks are reasonably content with their jobs, but would like to slowly build up passive income to replace their 9-5 over time.

To THAT end, I feel that quitting your job is the absolute worst decision you can make when trying to enter into Real Estate Investing. Your job (or the stable, long-term income stream from that job, rather) is the primary asset backing most conventional mortgatges - which I think are one of the most reasonable and likely means for many newbie investors to get financing for their first few real estate investments.

Basically - if you quit your job, you can't get a mortgage... which DELAYs your first investment substantially by making access to financing much more difficult or impossible, or worse will create very unfavorable financing terms and dilute your ownership.

By the way, I'm NOT talking about the person who is ready to quit their job and become a full fledged entrepreneur. If you are willing to hustle 12 hours a day in the real estate industry to build your thing, then good for you - you'll probably make way more money in a few years if you can hustle like an entrepreneur and build your empire full-time. I'm instead talking about the 9-5er looking for financial freedom in the medium term, and wants to add quality properties to their portfolio.