Reality Check Needed – Going Full Time

[Dave Savage]

Background: Recently my employer has decided to relocate our facility out of state and due to commitments in the Rochester, NY area I will not be moving. I am getting a generous severance package and have been saving a capital to begin investing (~1-2 flips worth) to begin my real estate investing. My wife also has a stable job to provide income for our family. In the past I have completed one flip(profit $24k) and managed a number of SFHs.

My Decision: I am seriously considering jumping into flipping full time with the goal to complete four flips in 2013($10k profit average assumed), and 7 in 2014 which would cover our living expenses in addition to my severance, and then grow from there with the goal to also begin investing in multi-unit properties for long term growth. I would also get my agent’s license to maximize profit and ability to write my own offers, etc.

Advantages: I can accelerate my network and team building significantly if I am focused full time. Good potential for long term income growth as I build my systems. Ability to do something I am passionate about. Control over my destiny compared to a 9-5 job. Respect within the real estate community which should help accelerate my Buy and Hold portfolio which is my ultimate goal.

Disadvantages: Potential for low inventory impacting ability to meet goals in 2013 and beyond. Risk of lack of capital (I have one private lender available to support 1 house in addition to my capital) drying up impacting ability to perform multiple flips at a time to scale the business. If I don’t succeed I can’t ensure what the job market will be when I need the income in 2014.

Obviously I would like to have more experience under my belt before starting full time and have a more established network to feed me deals but my main thought is that if I don’t take this opportunity now when I don’t need significant income in the first year to jump in I may never do it. Also by committing to the effort full time I will be laser focused on making it succeed, and ready to jump on deals (on which the numbers work) without hesitation due to any work commitments, etc.

What other pros/cons should I be considering? Does it seem possible to jump in full time with limited experience and succeed?

[Bill Gulley]

Sounds like you just need encouragement, go for it!

Sandy may have been a blessing for you. I'd suggest you use your funds to justify bank loans, open an account and pledge the account as well as the property and use your money for improvements, doing one at a time. Use a private lender as a last resort if paying over 10% for money.

Talk to you wife and get her to agree, 100% in to support you in your work. Family is first, need to make them feel secure. You take the lead!

Good luck!