Rental Property Investor · Dallas, TX · Member since 2015 · 501 posts · 504 votes
I've been a landlord since 2008, but only about six months ago did I decide I wanted to get more serious about real estate investing. I'm an engineer by day, which is why every time I hear an investor or a guru say they were an engineer in a past life, it catches my attention. I don't intend to quit my job, but I have become curious why so many have. The head of one of the local REIAs in Dallas/Fort Worth, a local multi-family investing expert, and the head of a turnkey investment company based in CA but focusing on Dallas are three examples that come to mind.
Here are my possible explanations:
1. There is no particular abundance of former engineers and I am just noticing them more because I am biased.
2. Engineers are good with numbers and analysis and these skills transfer well to REI.
3. Engineering offers good entry-level opportunities out of college but in the long term is a lousy career path (many of the successful investors I've met quit their day job after about 15 years working in the corporate world).
Has anyone else noticed the trend or have ideas why?
Austin, TX · Member since 2014 · 139 posts · 89 votes
10y
It's a combination of things. Making more cheddar than the average mouse is part of it. Actually having studied a degree that requires math is another. (But we use math for practical purposes, not navel gazing stuff like the mathematicians or the physicists.) We know our way around excel pretty well too, which ain't a bad skill to have in REI. Engineering is about figuring out how things work and finding solutions to problems. Real estate is just another problem for us to figure out.
On the flip side we tend to be more introverted and small-c conservative than sales and marketing types, so we struggle with those parts of the business.
I think you also get to a point in engineering where you have to decide whether to stay on a technical path or go over to the pointy-haired dark-side of management. The big money is usually along the management track -- for the select few that make it to the CxO level or who strike out to start their own business. Those of its who aren't interested in that rat race might start to look into other pursuits.
All that said I doubt that many engineers actually end up investing in real estate even if a disproportionate number of investors are engineers. I think more get active in the stock market or take up hobbies like restoring cars.
Developer · San Diego, CA · Member since 2015 · 1k+ posts · 1k+ votes
10y
I've noticed the same thing. I always thought it was because good early career prospects led to extra money to invest ... And that extra money led some people to REI.
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
10y
I totally agree with Andrew Wong
Engineers get paid pretty well starting out. It's easy to get complacent with that decent starting salary and healthy mid career money. One starts to wander at that point and dabble in other things such as children or rei.
Developer · . · Member since 2014 · 520 posts · 162 votes
10y
Lots of former software engineers/computer science fold on the east coast. I know too many in REI (including myself) for to be a coincidence. I think it's something with the way we tick. Very project/task based.
Austin, TX · Member since 2014 · 139 posts · 89 votes
10y
It's a combination of things. Making more cheddar than the average mouse is part of it. Actually having studied a degree that requires math is another. (But we use math for practical purposes, not navel gazing stuff like the mathematicians or the physicists.) We know our way around excel pretty well too, which ain't a bad skill to have in REI. Engineering is about figuring out how things work and finding solutions to problems. Real estate is just another problem for us to figure out.
On the flip side we tend to be more introverted and small-c conservative than sales and marketing types, so we struggle with those parts of the business.
I think you also get to a point in engineering where you have to decide whether to stay on a technical path or go over to the pointy-haired dark-side of management. The big money is usually along the management track -- for the select few that make it to the CxO level or who strike out to start their own business. Those of its who aren't interested in that rat race might start to look into other pursuits.
All that said I doubt that many engineers actually end up investing in real estate even if a disproportionate number of investors are engineers. I think more get active in the stock market or take up hobbies like restoring cars.
Investor · Albuquerque, NM · Member since 2015 · 36 posts · 10 votes
10y
@Paul B.
I also noticed that a lot of REI's are engineers. and it struck me as odd at first but that quickly changed once I started researching REI.
As a Civil Engineer, I worked 8 years in construction and learned to manage contractors to complete construction projects. This familiarity with contractors, contracts, project management, and cost estimation meshes perfectly with Real Estate Investing! That is why I have come to love it.
Secondly, as previously stated, engineers get paid very well so they can afford to dabble in the stock market, real estate, expensive hobbies or whatever else. I actually find it more impressive to see non-engineers that are way more successful than I because they had to be more creative in their financing methods. I believe that everyone has an "engineering mentality" in them...thus the reason why humans are so innovative in the way they overcome obstacles.
The biggest reason why I started in REI was because after an exhaustive analysis of which investment vehicle would allow me to become financial free the fastest, REI beats everything.
I like my job as Civil Engineer but I do not love it. Quite frankly, I don't like to work and the sooner I can stop the 9-5 rat race. ..the better. I cannot wait to have the problem of "being bored" when I am financially free at a young age. I will find something to do when I get bored. ..because that is what you do when you get bored :) I think that I will be REI'ing for the rest of my life but it will not feel like work because I love it. I am all about "work smarter, not harder" and so if I can condense a 30 yr. 9-5 job to a 30 yr "choose your own schedule" job. ..that is great. ..or just become financial free in 15 years and enjoy traveling at a young age with my wife instead of when I'm old.
Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
10y
Also guilty...but began investing in RE more as an 'engineering challenge' to fixing old homes damaged by salt damp. It was very profitable on a small scale & the rest is history. It did encourage me to take minors in Electrical & structural design & I co-habitated with a great architect for several years. When we graduated it was which of the 6-8 job offers were we going to take. The money was exceptional & I travelled the world on their dime, enjoyed the challenges (sans the politics), acquired a lot of RE then retired early to pursue the love of REI.
For myself, Engineering concepts as applied to REI, have been invaluable, saving me a lot of money & aggravation. However, my wife still complains I missed all the courses on budgeting costs for rehabs & just balancing a check book.
Investor · Kansas City, KS · Member since 2013 · 5 posts · 1 vote
10y
My husband is a retired engineer who spent almost 40 years playing with airplanes in flight test. He loved every minute of it. He tried several things after he retired, but real estate investing seems to be what has captured his attention for the long term. He is good at fixing things and solving problems, but not at marketing, so we do buy and fix to rent, then turn it over to an excellent property manager.
Deerwood, MN · Member since 2014 · 184 posts · 122 votes
10y
I don't know about others, but I am fixated on rate of return. I tried the stock market, and could not beat the averages-indexes. I like doing home improvement projects, so rei was a good fit. I see my houses as little oil wells pumping out cash. Looking to retire from engineering within ten years.
Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes
10y
All good points above.
My main reason is that your salary is capped, whereas your liability is unlimited. I started out my engineering career designing airports, making a paltry $40K/yr. I can't imagine what the impact on my life would be if I designed something that collapsed.....it would hardly make up for the measly salary I was collecting at the time.
Now can make that amount in one flip, with relatively no liability.
Investor · Gaithersburg, MD · Member since 2013 · 659 posts · 441 votes
10y
I didn't read all the replies so far but I am an engineer. I'm a computer/network engineer and the problem is, every 5 years, the technology completely recycles (with a few exceptions) so it's a CONSTANT learning curve. I know most jobs have a learning curve, but with engineering (any engineering field) it's extreme and constant. I don't have the energy to basically refresh my knowledge every 5 years. It's just too draining. Everything I learned in college was completely obsolete by the time I had been out for 3 years. There are always some basics that remain, but it's probably 10% basics and 90% complete overhaul every 5 years.
Real Estate is 90% the same, 10% change. for the most part, things rarely change (or change more slowly) which allow me to focus on finding deals and not constant re-education.
And before people berate me on how much things change, keep in mind, I'm speaking in general terms. Laws written in the 70's and 80's still control most of what you can do with real estate. Equipment created in 2010 (engineering wise) is already out of date. that's my only point.
So to your point #1, yes, it's like when you get a new car, you notice it more on the road. there is some of that.
To #2, yes, this is probably pretty true but lots of other fields are too.
To #3, this is probably closest to what I referred to above. after 15 years the constant reeducation starts to get VERY old. That's why it's rare to see an engineer that's been "engineering" for 40 years. I myself even moved into management/executive a few years back but still do "some" technical work. I've been in the industry about 15 years and I'm looking to be out of the technical part of it completely very soon.
Civil Engineer · Missoula, MT · Member since 2015 · 46 posts · 21 votes
10y
Engineering, especially civil engineering, is a good combination of technical skills and management experience that transfers to REI really well. We're good at analysis and not as likely to jump into a deal without really going over all the factors involved. Although the money and math skills help I don't think that's what gives engineers their edge. The pay is comfortable but it's not like we're able to do cash deals left and right. I'd like to think all the years spent in math classes will really pay off in REI but I don't see calculus 3 being applied to many REI calcs.
Lender · NY / FL · Member since 2013 · 240 posts · 44 votes
10y
@Justin B.You are exactly right, I work in IT also. Staying current with technology requires constant education to stay relevant in your position.
REI can present some complex problems. Solving these problems provides a direct reward which I think is part of the attraction. I personally like the mechanics of a deal and think some people naturally have the mind for it.
Investor · Cary, IL · Member since 2015 · 51 posts · 12 votes
10y
Ex software developer here. Got a computer-science and mathematics degree. Then spent 8 years in corporate America with 4 years being for a Fortune 100 company.
I just got really bored and hate sitting in an office 10 hours a day and then 2-3 hours a day in my car. That's not counting the time spent on re-education. I even spent 4 years in management but always thought there was more to work then that. After 1-2 years I was looking for something else. I've done tons since then bought restaurants, created a marketing company and managed professional athletes. I absolutely love real estate.
Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes
10y
I am developing a large Night Club and restaurant in Baltimore.......NO WAY could we do this without engineers, they are smart and I respect them.
I believe that sometimes engineers may over analyze a deal, while the less educated investors will go ahead and pull the trigger and make an offer and accept the risk.
I think engineers don't want to take risk or make mistakes, if they are building a bridge, they need to be right on with their calculations, a mistake in designing a building or a bridge can be costly.
One of our engineers miscalculated the load on a side wall of one of our buildings, before we were finished the deconstruction of the wide opening wall, he saw where he made a mistake and was quick to notify us and suggested a better way to do the job.
I am of knowledgeable as a real estate contract engineer, but I could not design a building, soft ware, or electrical system.
Investor · SSF, CA · Member since 2015 · 127 posts · 24 votes
10y
I’m an engineer also. Here are my reasons for making a switch.
1) Better long term investment of our time. Many of us in the startup sector have been burned (crappy IPOs, our equity watered down with each round of funding, etc). Real estate gives us more control over the value that we know that we can add.
2) Niche targeting. Those of us in the IT / tech sector know about many ways that we can enhance the value of properties. We know those “little things” which create lots of value for those with second offices. When we see others doing things like putting flyers on doors, we think to ourselves, “Hyper targeted ad words would probably be a better bet.”
3) Leverage points. When you’re an engineer (particularly on the product side), you’re always asking yourself what the exact impact of various changes are. When you get used to thinking like this (and are canned if you don’t!), you can easily adjust to the real estate sector.
4) Automation. A lot of real estate opportunities come from finding the needle in the hay stack. Those of us in the IT industry who are used to digging through “hay stacks” (e.g. system and network logs) are used to creating filters to find the exact thing that we need.
I have a degree in Electrical Engineering and I am also a Six Sigma Master Black Belt. I think there are several reasons why engineers are drawn toward real estate. We're smart, have mad math skills, and we have high paying base salaries from our daytime job. We also tend to work a ton of hours and wish we had more time to do other things. Real Estate offers a lot of freedom that you just can't have as an engineer and is a great vehicle to early retirement. I made it there by 35 ;)