Change of Status - 6 month challenge

[Bill S.]

So in the vein of previous posts like The 90 day challenge and 1 year challenge I am faced with a 6 month challenge. The story goes as follows.

I have/had a w2 JOB. It's ok, I'm well paid and it provides for my family and is flexible to allow for time to deal with RE stuff too. Well Friday I got notified that they are changing my status from salary to hourly and I am to only work when I have billable work (I work in the consulting field). The last 6 months I haven't had much work and so it's not a total surprise but it still stings. I'm the last of a group that has slowly shrank to lonesome me via attrition over the past 2 years. We/I don't/didn't do the kind of work that is the core of the companies business so they won't miss us. Really it's just a gentle way of letting me go and in a way that they aren't on the hook for unemployment. This is not the first time it's happened to me. About 10 years ago I had the same thing happen. I was re-employed in 2.5 weeks so while it cost financially it was pretty much more of the same. This time there are more options. I'll use this post to chronicle the process as I'm sure there are others who will or who have faced the same dilemma.

Trying to keep the post shorter, I won't go into too many details. We have about 4-5 months of available reserves if I make no more money. We would then have to sell one of our properties with lots of equity that is just treading water which would allow us to carry on for another year or so, again assuming zero other income. I don't want to go backwards (spend cash) or sell property but will do what is needed.

I'm considering the following options.

1) Find another w2 job.

2) Offer consulting services in the same field as my w2 job. This requires a bit of self marketing. Things appear to be health job wise here in my field. I know a number of others who have been successful at this. I am all set up to do this from a legal standpoint. Logistically very straightforward.

3) Launch my services as an RE agent for sales. I am a licensed RE agent in my state. I have sold a number of properties over the years. I am set up for this from a legal standpoint as well.

4) Expand my services as a property manager. I currently manage properties for a number of people in addition to my own. I'm all set up for this legally as well.

5) Pursue fixing and flipping. I have done this with success a number of times. You do make your money when you buy and I bought well in all but one case, there I broke even.

6) Pursue wholesaling on a full time basis. I have begun a direct mail campaign and have had good response to my very low volume effort but have not done a deal yet.

7) Become a licensed contractor and do handyman work. I have been project manager on my fixups and my fix and flips so this is not a huge step but I have a long way to go setting up the legal aspect.

8) I could sell off a number of properties and pay off the debt on others and create enough cash flow to squeak by.

9) Some combination of all of the above.

Right now we are just in a holding pattern until we can get some feedback and council from others and see what perspective they offer. I hope to have direction by the end of the week. I am ramping up my direct mail campaign. I have a unique source of leads that seems very good and I am trying to figure out how to expand my list on a daily basis.

Tasks this week:

1) Meet with advisors.

2) Get an assistant to help expand my list for direct mail.

3) Make a decision about direction.

4) Keep perspective and balance by being there emotionally with my wife and family. I know I can do whatever I want but my tendency in the past is to put my head down and GO. Leaves those around me in the dust. This is a journey we are in together so need to keep perspective. I'm really scared too.

To chronicle this journey, I'm going to post at least once a week here with an update. Perhaps more if it seems necessary.

Hopefully we'll see a success story unfold.

[Bill S.]

Update - a little more on the situation. I have been doing direct mail marketing to locate motivated buyers. I've been kind of working off the following numbers. 1% response rate (every 100 mailers I get one call ) and close about 1 deal from 60 calls.

I built my list based on Michael's  Podcast 81 on direct mail marketing. Great shout out to him for the great advise. I follow his script when answering calls as well.

Thanks to @Joshua Dorkin for this site. There is no way I could have done this without the great advise from the site.

I bought a list from online and paid my daughter to print the envelopes (our printer must be fed one at a time), stuff and stamp them. She got about 400 out after working all day. My list is about 1,000. We sent those out (still need to finish the list). I got 5 calls. 2 were remove me from you list. 1 was make my dreams of winning the lottery come true. At this point I read the sticky in the real estate marketing section of the forum and realized I wasn't alone). 1 was redevelop my property to make my neighbors mad. 1 was buy my property so I arranged to meet with them. I was scared to death I was over paying but I was to the point if something even looks close I'm going to get the best deal I can and see what happens. I got it under contract. I had no buyers list so I put it on Craig's List offering to pay a commission to any agent (thanks to Wendell for his coopitition concept in Podcast 65), that brought a cash buyer. I got about half a dozen calls and one agent passed it to another wholesaler who had a buyer. I assigned the contract a few days later and we closed yesterday. Considering how the numbers work for direct mail this is nothing short of a miracle (thank you God). Could not have come at a better time as our reserves were about out.

I also have another one under contact (from another direct mail campaign-that I built with a VA as suggested here on BP) that I have assigned to fix and flipper (also found via Craig's List). It is a thinner deal but appears that it will close.

@Anson Young was a great encouragement on this deal by jumping in and helping market it even though ultimately it didn't work for him.

Slowly building my buyer's list. Hope to one day cut out the other wholesalers and get a larger piece of the pie for me.

Just have to ramp up the direct mail machine to keep the deals flowing.

Our market is hot (low supply and high demand) here so on one hand it makes it hard to find deals on the other hand it makes it easier to sell when you do find the deal.

The saying goes, you find the deal and the money will be there appears to hold true.

This has been the most grueling road trip of self evaluation and redirecting my own thinking and self talk. I realized when I last posted in May I was only talking about all the obstacles rather than the opportunities and that was bringing me down. I didn't have the resources to document the obstacles because if I spent the time writing them down, I became overwhelmed and quit doing even the little things. I focused on doing one thing that moved my business forward each day, even if it wasn't the best use of my time. Often it was only get a few more direct mail envelopes stuffed and stamped (I know I shouldn't be doing that but some days anything is better than nothing). I do know this if no mail goes out, no deals come in.

There are many here on Bigger Pockets that have provided encouragement and helped move me forward over the past months (wish I could mention them all here). It has not been easy but I'm quite certain that without BP I would have quit and if I hadn't quit, I would still not have a deal. Thank you all once again. Looking forward to continuing in success and sharing with the great BP community.