Give up my IT business and go full time into BRRRR?

Question

Job situation currently:

Quick background, running an IT business for 3 years now, makes about 150-250k gross per year, struggle to find the right employee to help so it takes my time m-f 8-5.

Location: Central California

I also have an online store that brings in 150-200k NET per year and that’s what we live on and use to build a savings. That takes my time most nights, and weekends to receive/pack/ship those products but is super flexible with time.

On top of that, I self manage 6 of my own rentals, the cash flow pays for my current mortgage and repairs so it makes living in my primary house free.

Experience now:

My wife and I have 6 rental homes locally, all rented, all cashflow. I do all the repairs, and have done all the rehab since I have the ability to fix almost anything. (I have a general contractors license in CA) I would say about 4 of them have 100k+ of untapped equity since we never did any cashout refi.

Question:

Our cash savings currently is about 250k free and clear, My question here is should I give up the IT business, focus on buying 1 house cash, spend my  time on rehabbing the house, (guessing 2-4 months is what that would take), do the other RRR parts and build more wealth this way. Do you think that would outweigh the potential of trying to build my IT business?

Nate Bog · Answer

That’s what I want to do, I tend to say “yes” to all work when new business calls but the work life balance is more on the work side. What makes it harder that I didn’t add was I have a 1 year old with a second kid due in December, we have day care which makes work during the day doable. My wife runs her own bookkeeping business and helps with the online business (receive, package, ship) and of course keeping rents paid up from the current tenants.

I figured once we use our own cash to buy we wouldn’t have issues getting a refi on a cash flowing house after the rehab. In the last few months we were outbid on a few deals like a house for 290k with arv of 380k. I have been thinking of an Exit of how to sell the IT gig in the next year so at least I didn’t build it for nothing.

Travis Timmons · Answer

@Tabitha Bogdanov love that you chimed in here. I'd encourage you both to look at it as if a friend asked you for advice. You have nothing but great options. Pick one and commit. You have both proven that you're likely to have some success - even if it is try, fail, and adjust. 5 years from now it likely won't matter which option you chose.

I'd hate to walk away from the business and get nothing. I've sold 2 non-asset based businesses and know how difficult and fickle it can be to find a buyer. Give it a shot, but if you come up empty or have to sell at a discount, it still makes your life better and you're doing great financially.

Travis Timmons · Answer

Find a way to do both - at least for the first one. There are so many moving parts in a BRRRR deal that you need the security of your primary income. Not to mention the fact that you're going to have SO many more options on the refinance portion if you have that income.

BRRRR is a great way to build your net worth, but it is going to tie up a lot of your cash and the pay off is more equity than income/cash flow to pay for daily expenses.

And I can't tell if you have 1 business or two. If you are pulling in $200-400k, keep that and just pay a GC/manage tradespeople. The "highest and best use" for your labor is your current gig, not fixing up houses.

If I am missing something, let me know. It's a different story if your wife has a good income or if you could turn the business "back on" if you needed to. I know how difficult it is to build a business that makes $150-200k per year. Think really hard before you give that up.

Heath Thomas Jr · Answer

Have you tried working with a recruiter to fill the role? Would need more info on the IT company but I agree with Travis you probably shouldn't give that up. At the very least, could you find some part-time help to free up some of your time? Get a GC and tag along on the renovation. Just because you have done it yourself before doesn't mean you necessarily are doing it in the most efficient/cost-effective way.

At the end of the day, building wealth through real estate like you are thinking might be the best move, but you shouldn't just drop things that are working now for something potentially better. Figure out a way to do both before determining which way you want to go.

Theresa Harris · Answer

I agree with Travis, you need the secure income to buy rentals.  Finding good people to work for you is a problem whether it is running your own business or having rentals.  Doing both the online store and IT business is a lot.  If you gave up one, I'd work on trying to sell the IT business.  If it is only taking your time M-F from 8-5 you must be doing something right as most small business owners work more than 40 hours a week just running that (if they want it to be profitable).

Ryan Cheek · Answer

Hi there,

It sounds like you've built an incredibly diverse and successful portfolio, balancing multiple streams of income and managing your own rentals, which is no small feat. Given your background, especially with your general contractor's license and hands-on experience with rehabs, transitioning more into real estate seems like a natural progression.

Here are a few thoughts:

• Potential of Real Estate vs. IT Business:With $250k in cash savings and significant untapped equity in your rentals, you’re in a strong position to leverage your existing real estate knowledge to grow your portfolio further.The real estate market, particularly with your ability to do your own rehabs, might provide you with more immediate and scalable opportunities for wealth building, especially if you can find properties that need work and force appreciation through value-add strategies.
• With $250k in cash savings and significant untapped equity in your rentals, you’re in a strong position to leverage your existing real estate knowledge to grow your portfolio further.
• The real estate market, particularly with your ability to do your own rehabs, might provide you with more immediate and scalable opportunities for wealth building, especially if you can find properties that need work and force appreciation through value-add strategies.
• Balancing Both:You don’t necessarily have to give up the IT business entirely. If it’s possible to scale back your involvement or bring in a partner/employee to manage the day-to-day, you could still benefit from the income while focusing more on real estate.
• You don’t necessarily have to give up the IT business entirely. If it’s possible to scale back your involvement or bring in a partner/employee to manage the day-to-day, you could still benefit from the income while focusing more on real estate.
• Cash Flow vs. Capital Gains:If your current rentals are cash-flowing and covering your mortgage, adding more properties that you can rehab and rent out or sell could significantly boost both your cash flow and equity positions.The decision might come down to whether you’re more interested in building long-term wealth through real estate or continuing to grow the IT business. Real estate offers tangible assets that can appreciate and cash flow, but your IT business could also have growth potential, especially if you find the right help.
• If your current rentals are cash-flowing and covering your mortgage, adding more properties that you can rehab and rent out or sell could significantly boost both your cash flow and equity positions.
• The decision might come down to whether you’re more interested in building long-term wealth through real estate or continuing to grow the IT business. Real estate offers tangible assets that can appreciate and cash flow, but your IT business could also have growth potential, especially if you find the right help.
• Considering a Hybrid Approach:Since you’ve got strong systems in place for your online store and rentals, perhaps a hybrid approach might work—slowly transitioning more time into real estate while maintaining a steady presence in your IT business. You could test the waters with one or two rehabs, see how they perform, and then decide if a full transition makes sense.
• Since you’ve got strong systems in place for your online store and rentals, perhaps a hybrid approach might work—slowly transitioning more time into real estate while maintaining a steady presence in your IT business. You could test the waters with one or two rehabs, see how they perform, and then decide if a full transition makes sense.
• Leverage Your Skills:With your contracting experience, you can save significantly on rehab costs and add value quickly, which might give you a better return on investment compared to the time and effort spent growing the IT business further.
• With your contracting experience, you can save significantly on rehab costs and add value quickly, which might give you a better return on investment compared to the time and effort spent growing the IT business further.

• With $250k in cash savings and significant untapped equity in your rentals, you’re in a strong position to leverage your existing real estate knowledge to grow your portfolio further.
• The real estate market, particularly with your ability to do your own rehabs, might provide you with more immediate and scalable opportunities for wealth building, especially if you can find properties that need work and force appreciation through value-add strategies.

• You don’t necessarily have to give up the IT business entirely. If it’s possible to scale back your involvement or bring in a partner/employee to manage the day-to-day, you could still benefit from the income while focusing more on real estate.

• If your current rentals are cash-flowing and covering your mortgage, adding more properties that you can rehab and rent out or sell could significantly boost both your cash flow and equity positions.
• The decision might come down to whether you’re more interested in building long-term wealth through real estate or continuing to grow the IT business. Real estate offers tangible assets that can appreciate and cash flow, but your IT business could also have growth potential, especially if you find the right help.

• Since you’ve got strong systems in place for your online store and rentals, perhaps a hybrid approach might work—slowly transitioning more time into real estate while maintaining a steady presence in your IT business. You could test the waters with one or two rehabs, see how they perform, and then decide if a full transition makes sense.

• With your contracting experience, you can save significantly on rehab costs and add value quickly, which might give you a better return on investment compared to the time and effort spent growing the IT business further.

Final Thoughts:

Ultimately, it might come down to where your passion lies. If real estate excites you and you see more potential for growth and flexibility there, it might be worth exploring further. However, if the IT business still holds potential and you can find the right help, balancing both could provide you with diversified income streams and security.

If you ever want to discuss more about scaling in real estate, particularly with multi-family or new construction opportunities, I’d be happy to connect. I specialize in helping investors grow their portfolios strategically, and your skill set would be a great asset in this space.

Best of luck with whichever path you choose!

Ryan Cheek

Tabitha Bogdanov · Answer

I’m the wife. He has his online business (est 2014) that he gets payroll from. The IT business (est 2020) in which he also gets payroll from and the rental properties which are currently ran under sole prop. He asks if he should sell the IT business because his limitation right now is time. He can keep thing going as they are (not growing in our current circumstances) but knowing we’ll have a newborn by new years he is contemplating freeing up his working hours during the week by selling the IT business which should allow him to grow his online business, without taking much more of his time. This could increase consistent revenue and give him the flexibility he needs to focus on really starting BRRR.

He can make anything profitable (in my opinion). So does he give up one source of revenue now, to give him the opportunity to multiply his revenue elsewhere. Or does he keep doing what he’s doing, which to me with our growing family isn’t sustainable.

Ultimately I support whatever he decides, but we aren’t in the real estate industry most of the time. It’s currently mostly passive income even though he has the skill for it. So we need input from people who are in it.

Give up my IT business and go full time into BRRRR?

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