Should I quit on my contract job?

Question

Hi, Everyone,

I have been here for little while, but never had chance to introduce myself.

I just started doing wholesaling 2 months ago, however, I have quite real estate investing experiences since 2011 in Toronto, Canada, I have done some great deals, one of them is rezoning project, I can generate 350k profit on one property end of this year or beginning of next year. But it takes too long to see the result and longer the time, bigger the risk, especially in Toronto market, someone says Toronto 2015 is US 2006 market wise.

So I decide to move down South Florida, I just started doing wholesaling 2 months ago, I have quite few team members, formed entities, will open up my bank account in week after, have started making some offers through realtors, just haven't got any offer accepted yet, the market is getting hotter and no longer buyer's market for sure in some areas.

I haven't become RE fulltimer, my Mon-Fri contract day job has gone boring after 14 years working in IT development world. I want to quit because I need to dedicate on my RE business.

Currently I spend half day communicating with them and also other relevant parties. and another half day doing my IT work for client. It's always lack of time, often stay up late until 1-2 am and have to get up around 6am because of the early daily meeting on the site.

I feel I should be full time RE investor because I know what's going to happen, what to do next, however, I don't have enough time to move faster.

All these can be solved by quitting the contract job. However, financially this is my only monthly cash-flow, even I have 6 months reserve, but I don't really know when my new RE business start generating sufficient income, what if longer than 6 months? it's my fear and worry.

Anyone, any advices, you are more than welcome to bring them up, thank you!

Belinda D. · Answer

@Aaron Liu,

Don't Quit the part time job!!! You need and will continue to need the income its currently generating for you right now. Think about what you just told us, your JOB is your ONLY monthly cash flow.

Your REI cash flow has to be enough to replace the cash flow from your job plus it has to be enough to pay your REI expenses, your personal expenses, provide some extra cushion for other monthly expenses and emergencies and it also has to be enough for you to comfortably sleep at night without being worried about lack of money.

Believe me the 6 months emergency fund is not enough for you to live on (rent, food, etc and pay all other expenses). One year emergency fund might still not be enough. I found out the hard way and I am still licking my wounds.

Having that job is an advantage at this time for you, because you can also use it to borrow if needed. It is security for you right now. Since you are in IT maybe you can ask your employer for an opportunity to work from home, even if it's a couple days a week.

At the end of the day, the final decision has to be your own. Think about it v. carefully and put your plan in writing, the pros and the cons. Your dream will become your reality, but do not forget that you still need to live in the present.

All the best to you.

Mike H. · Answer

Wow. Interesting call there. Seems odd that you would quit your job if your wholesaling isn't generating any income at all for you.

On the other hand, it sounds like you're working in IT as a developer and the demand for developers is pretty high these days.  Worst case scenario is that you give it a go 100% FT as a wholesaler and if you run out of money in 6 months, you can always get a job in IT again.

Just not sure Id advise most people to quit a job for real estate if their real estate wasn't generating any income at all yet.

It sounded like you were putting in some pretty good hours with the real estate investing. Typically, if you can't make anything in 4 to 6 hours a night, I'm not sure how working 10 to 12 hours a day is  going to help you that much more. Hopefully, in your case, it will. But that seems to be a huge leap of faith there.....

Good luck to you and let us know when you find your first deal. Its clear you are now doing what you love as you definitely seem to have a passion for investing and maybe that will make all the difference going forward for you.

Dennis Williams · Answer

Nice Aaron Liu!!

Aaron Liu · Answer

Thank you! I did it anyway, the day job has become my obstacle in many ways, if I keep doing like this, not only I won't have enough time and energy to dedicate on my REI, but also unfair for the client, they are paying me for full time work I contribute to their team, not for 1/3 of my time, lacking of work-from-home option and high pressure from the one who is a bit aggressive, all these stuff, made me beyond my limit... I have doubts and fears on REI wholesaling, to be honest, but in long term, I have made more than IT income since 2011, just not monthly cash flow.  Burning my boat then I can move ahead with my team! See you guys in Florida!

Larry Turowski · Answer

@Aaron Liu If you had a proven business model then there wouldn't be as much fear.  I think you need to prove to yourself that you can make this work part time and then scale by going full time.  While I have known people who have simply taken the leap done very well, it wasn't without a fallback plan: "Well, I sleep on my friends couch for 6 months and reduce my  expenses."  Or, "I know I can always get another job, so I'm only risking 6 months salary."

Until you have a proven business model and a suitable fallback plan, I wouldn't quit.  There are people who will take a flying leap and succeed.  But they have a certain lack of fear that you (and I) do not, it seems.

Should I quit on my contract job?

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