Laid off newbie investor seeking advice

San Diego, California
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Laid off newbie investor seeking advice

Steven Wade
Escondido, CA · Member since 2017 · 12 posts · 6 votes

Hi Everyone,

I just got laid off from my job, and I'm trying to plan next steps as a beginner investor. I'm in San Diego County (Escondido), and my wife I were just starting to look for deals out of state in San Antonio. We were planning to BRRR using cash and money from a HELOC for the original purchase, but the HELOC fell through due to the employment change. I know there are some alternate options for funding the deal such as private/hard money, but I'm not sure about trying that for our first deal, when we don't really have much experience out of state. I'm wondering if it is best to wait until I get employment again to get the HELOC and continue to invest, or if there is another option I'm overlooking.

I'm also considering if I can transition to an career that would better position myself to invest in Real Estate, specifically becoming an agent. So my question is, do you have any advice on what you would do to progress toward financial independence through Real Estate if you were in my situation? 

Being unemployed currently, I find myself with more time to hustle than I had previously, so if any investor in SD county needs an extra hand on a deal, feel free to hit me up.

Thanks,

Steven

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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
7y

Your hustle efforts should be directed entirely toward finding re-employment. A solid W2 is the foundation investing is built upon.

I would not advise transition to a new career as that will take considerably longer to build back up to the income level of your present career. The best career for investors is the one that pays the most. Stay focused, don't jump around.  Agents are a dime a dozen, income will be sporadic and could disappear with a down turn in the economy. Assuming your present career was good paying stick with it. The only purpose of working is to earn money and to qualify for financing.

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  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    Your hustle efforts should be directed entirely toward finding re-employment. A solid W2 is the foundation investing is built upon.

    I would not advise transition to a new career as that will take considerably longer to build back up to the income level of your present career. The best career for investors is the one that pays the most. Stay focused, don't jump around.  Agents are a dime a dozen, income will be sporadic and could disappear with a down turn in the economy. Assuming your present career was good paying stick with it. The only purpose of working is to earn money and to qualify for financing.

    3Reply
  • Ryan P. Kotschedoff
    Real Estate Agent · San Luis Obispo, CA · Member since 2018 · 79 posts · 39 votes
    7y

    I think becoming and agent is a fantastic option. There is so much money and experience that comes from working as an agent that will help you invest in real estate. It also is useful to have your real estate license because I find it is easier to invest and the access to the mls is useful. Also, you don't have an agent taking your commission. As for investing, I don't think you need to wait until employment. (Maybe investing will become a full time job at some point). I think one of the best ways to get started is with hard money lending. Hard money lenders allow you to invest with confidence because they look at the deal as well, so you have a second person looking over your deal. They won't give you the money in less they are confident in the deal that you presented them with. Best of luck!

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  • Ryan P. Kotschedoff
    Real Estate Agent · San Luis Obispo, CA · Member since 2018 · 79 posts · 39 votes
    7y

    Thomas does make a good point because you will need to qualify for some loans so having a job the pays is important in some cases. I think finding a job before you invest is not crucial if you have some money in the bank or have something to fall back to if the investment goes wrong. Also the chances of making good money your first year as an agent is very minimal so that will be tough, but things always get better as an agent the longer you stick to it. Remember, 87% of agents quit there first year because of this reason, so its important to get through the hardest year of being an agent, which is the first one. (If you plan on being an agent anyway)

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  • Andrew Neal
    Real Estate Professional · Brentwood CA / Dallas, TX · Member since 2016 · 185 posts · 146 votes
    7y

    I agree that looking for another job should be priority for the above mentioned reasons. Also if you change careers keep in mind that lenders typically want to see a minimum 2 years history in that field. Key here is staying in the same or similar field. I changed jobs prior to buying a primary residence but since it was in the same field (marketing) the lender was fine with it.

    You can also still get your license and dabble as an agent while working a full time job.

    Just my two cents!

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  • Kevin Keith Beck
    Flipper/Rehabber · Escondido, CA · Member since 2018 · 49 posts · 51 votes
    7y

    Hey Steven,

    I too am currently at that crossroads.  

    I took off a year to write a book and donate a kidney to a friend (recuperation was a *****). Now that time has passed and with my age, getting back into employment has proven challenging and not looking very attractive.  I think I'm like you and am hungry to make investing work for me and my goals regardless of the sage advice of others. I understand the points about being gainfully employed and having a great credit history to bolster your loan worthiness, but for me, it may be too late for that and "creative financing" may be my only option.

    I'm in Escondido too and have been reaching out to other BP locals to try and get a grasp on the possibilities of making it work here, in San Diego.  Currently I am educating myself as much as possible and attending events whenever I can.  I have started to build the infrastructure and systems to 'fish for leads' via the internet (SEO), but will need others to round out the team.  In the meantime, my girlfriend is getting her real estate license so that together we can flip homes.  That's my specialty.  I'm a retired GC with tons of rehab experience and design savvy.  Our goal is to wholesale, flip for profit, and buy & hold small MF for the long haul.  We both like design and home remodeling, so that will be our primary focus once we get the biz off the ground.

    If you'd like to get together and talk, I'd be happy to.  Just let me know.

    Take care and good luck,

    Kevin Beck

    2Reply
  • Curtis Rouse Jr
    Realtor · Atlanta, GA · Member since 2015 · 266 posts · 182 votes
    7y

    Hey @Steven Wade as others have mentioned, I would definitely be looking for employment while still pursuing real estate in the meantime unless you have a nice chunk of money saved on the side to do things like marketing and education to get you started. With the abundance of money out there for deals through hard money or private money you don't necessarily need the money, just a good deal and possibly some reserves just in case unexpected scenarios arise (they always do fyi). Best of Luck!

    0Reply
  • Grayson Wester
    Lender · San Antonio, TX · Member since 2018 · 109 posts · 108 votes
    7y

    Welcome to the club @Steven Wade! Although I'm sorry to hear that you got laid off I'm also really excited for you. That happened to me once and I was in a similar position to yourself. It was terrifying and liberating all at the same time. If you've got a nice chunk in savings and/or your wife works, it might be worth giving yourself a deadline for how long you're going to commit to getting your investing business off the ground. My wife and I did that and it really helped. We decided that I would give it a good solid run full time for several months before I started to look for W2 options again - I'm glad we did that. Whether you work a W2 and do this on the side or go for it full time - you will be successful. I've actually got a couple clients in California and Washington that work full time jobs and invest in San Antonio. It's possible!

    If I can help introduce you to any wholesalers, agents, etc. here in San Antonio let me know. I'd be happy to help!

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  • Steven Wade
    OP
    Escondido, CA · Member since 2017 · 12 posts · 6 votes
    7y

    Thank you all so much for the great advice and the kind offers. A bit of good news for me, it looks like I have a job in the works again so I can get back going with the loan and getting the house. I appreciate the insight about it being harder to get a loan etc if you do a career switch.  

    1Reply
  • Casey Murray
    Investor · San Diego, CA · Member since 2015 · 290 posts · 80 votes
    7y

    @Steven Wade Everyone can agree having W-2 income tremendously helps with lender qualifications. Assuming you have great experience in your industry, I would pursue finding a job in that area. 

    Regarding being a RE agent, you can shadow a full time and experienced RE agent for a week or two to really get an idea what it's like. I would encourage assessing your strengths and weaknesses. Some people are better at being W-2 employees rather than entrepreneurs and vice versa. Either way, don't give up! Best of luck.

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