Quitting your job.

[Nathan Gasti]

I am at a crossroads in my real estate investing career. I want to quit my job to pursue flipping full time and have enough money saved to live comfortably for 8 months. I also want to buy my first multi family for passive income but that would eat up my savings and I'd have to continue working a job I dislike. Would you guys quit to flip or buy an apartment and continue working? I fully believe that if you want to take the island you have to burn the boats. 

[Jay DeCima]

Nathan

I wrote this for one of my students.

8 RULES OF CAREER CHANGERS

1. Learn your local market. Know what properties should cost and what they can reasonably sell for. Learn how much rent you can get. Do these steps before you buy, not afterwards.
2. Learn to spot or identify hidden bargains quickly, then act fast to acquire them. Remember, competition is keen. You must develop a sixth sense for sniffing out hidden money-makers.
3. Develop a business sense…think like a retailer. This will help you to pay wholesale prices when you buy. Buying at retail prices and selling for retail prices simply won’t work. Don’t do it!
4. Invest…don’t speculate. Investing is a plan to make money. You must be able to identify exactly how you will do it. That’s why step one is necessary. Specu­lators are guessing without a plan.
5. Learn how-to do deals where you have 100 per­cent control or nearly so. Basically, this means owner financing with you doing the management. Avoid short payback notes and variable rate mortgages offered by the institutional lenders.6
6. Learn how to live on tax-free or tax-sheltered income. Rents you collect are normally tax sheltered. Rehab loans, like Title Ones, are tax-free same as bor­rowing on equity or refinancing. When you collect $100 rent you get to keep $100. When you earn $100 in wages, you keep only $70. Taxes eat up the money you can easily keep to benefit yourself.
7. Learn landlording first hand from doing it. Manage your own customers (tenants). Many inexpe­rienced investors farm this function out to professional property managers. I consider this a serious mistake for new investors. Maybe it’s okay later on, but owners should know the job inside and out first.
8. Once you have developed a plan that works well and consistently makes you money, stick with it until it quits working. Most investors suffer this common weakness. We’re all suckers for a better mousetrap. Avoid the “too good to be true” temptation-it generally is.

Good luck.

Fixer Jay DeCima