How I Went from Launching Rockets to Investing Full-Time

Is your goal to leave your “day job” and invest in real estate full-time? Or, are you looking to replace your paycheck with passive income?

While many people share these goals, they often approach it differently.

For example, I’ve seen people do what I refer to as “burning the ships,” or the Napoleon method, essentially quitting their jobs cold turkey and willing their business venture to succeed. “Burn the ships, succeed or die,” was Napoleon’s cry. There is no retreat. This approach can be a little harsh and risky, but I’ve seen people do it and be successful.

I’ve also seen paralysis by analysis. This is when people do the complete opposite, losing themselves in all the information out there. It can be easy to do, but unfortunately, no matter how much we read, at some point we have to take action.

Personally, my journey went from launching rockets at the Kennedy Space Center to investing in real estate and private lending full-time before eventually starting a self-directed IRA company, and none of these changes were sudden. I acted early and continually, but instead of going into the business, I grew into it. Here’s how…

Stage 1: Gaining an Education

From a young age, I developed an appreciation for “mailbox money.” My mom had her apartments and my dad had his rental properties, so I did whatever I could to help them out. When I was 10 years old, I remember my dad asking me to run into the post office to grab our mail while we were out doing errands. When we got home, he had me open each of the rent check envelopes and fill out the deposit slips. I thought I was just helping, but a seed was planted.

Throughout the years, I did everything from building a new family home to cleaning septic tanks on Holidays, calculating and designing concrete arches, painting vacated apartments, and working construction. Of course, all these tasks were learning experiences.

But even if you had a completely different upbringing, you can still get involved in real estate and learn from others. For example, you can join Real Estate Investment groups (National REIA), meetup groups, or mastermind groups, attend events like the Mid Atlantic Summit, or even ask or pay for mentoring. These are all good ways to quickly move up the learning curve that weren’t available years ago. Plus, the Bigger Pockets platform offers plenty of opportunities to make these types of connections. I’ve even seen some individuals do private lending as a way to watch a flipper or rehabber, basically getting a mentor in addition to making interest with the loan. Talk about killing two birds with one deal!

Although I had grown up around real estate, when it came time to choose a career, I had other ideas. In high school, my father told me to have a skill to bring to the marketplace. I did well in math and already had some experience with construction, so I went on to get an engineering degree from Cornell University. After I graduated, I got a job at the Kennedy Space Center in Cape Canaveral, Florida.

I had student debt, but my job required a lot of travel, so I was able to live on the travel stipend and put as much of my salary as I could towards paying off my loans. As many people do, I looked for properties and took on deals whenever it made sense.

Stage 2: Building a Real Estate Portfolio

My first deal was a property near the ocean that I purchased with owner-financing, and I put an option on the lot next to it for right of first refusal. For those starting out, owner-financing is a good way to break into the business, because sometimes you can benefit from lower closing costs, a lower down payment, and customized repayment plans. There are also many opportunities for first-time homebuyers to get funding with limited credit requirements and lower down payments (i.e. FHA loans).

At the time, I received owner financing at 6% with 10% down ($1,700.00) on a purchase price of $17K, but now a buyer could get as low as 3% for a single family residence. Since I had experience building homes, I built one on that land to add value and equity, which was the first step in developing my portfolio.

I still have that property today, so my strategy was “buy and hold” from the beginning. From there, every time I purchased a property, I seemed to get more and more depreciation and tax benefits. As many people do, I was losing a good chunk of my W2 income to Uncle Sam, so this allowed me to keep more of it.

I bought around four properties in four years, got married, and started to invest in other alternative assets. The three things that split up my time were family (I was young, and my family was growing), working my day job, and looking for passive income, including investing in railroad ties, lumber, wells, and more.

If your time is divided up in this way, maybe you’re wondering when you should leave the day job and focus on investing full-time.

Stage 3: Leaving the Day Job

Launching rockets was fun, but it didn’t make as much money as you do when you’re in real estate. As my father used to say, “no go, no dough,” meaning that if you don’t show up you don’t get paid. I needed something that wasn’t like that, and I wanted to spend more time with my family.

Plus, we had already received word that the launch program was on its way out and the Russians were being considered to run rocket ships to and from the space station.

In the meantime, I got more into commercial real estate with triple-net rents and private lending with less risk. I had enough income coming in from alternative investing, so the decision to leave my job was an easy one.

Many folks have a leave by date or number in mind. So, if you haven’t made the change yet, what would make it easier for you?

Stage 4: Building Wealth Tax-Free

Once your time is freed up to focus on investing, sometimes you learn new tricks of the trade or strategies you had never considered before. For me, this happened after I had already built a portfolio of buy-and-hold properties as well as other alternative assets.

I was almost 40 when my father died. When I came home to sort out his estate, I learned that he had died land rich and cash poor. I got a call from his attorney telling me that he had a promissory note in default that was going to foreclosure. I scrambled to find a loan to refinance. At that time, private lenders would post opportunities in the paper, so I called one up after finding him in the classifieds.

My dad’s commercial loan had a defaulted 28% interest rate, but thankfully, I was able to pay it off with the private loan at 12% on a free and clear property. When going through the paperwork, I noticed that my lender was investing from his self-directed IRA. This was the first time I heard of anyone doing that.

After many years of researching and learning more about this strategy and the tax advantages (information was limited then), I started utilizing a self-directed account for my deals. Even later, my sister and I decided to start an IRA company ourselves.

Whether it was buying those first few properties or eventually getting into self-directed investing, each stage in my journey included growing pains. For those just starting out in real estate, my biggest piece of advice is what my dad always told me, “You don’t go into business. You grow into business. Do your best to prove concepts that are out there.”

Throughout the years, I’ve had mishaps, deals gone wrong, and faced some pretty bizarre scenarios, but real estate is a learn by doing business. One of the best ways to prepare is to surround yourself with like-minded people and a solid team of professionals, who are successful at what they do.

Just as you wouldn’t want a brain surgeon who has never done surgery, you wouldn’t want an attorney without a solid track record in court. To find the right team members, whether that be your CPAs, attorneys, or tradesmen, consider joining networking groups in your area or even reaching out to folks here on Bigger Pockets!

I’m sure many of you have stories to tell as well. Have you been considering leaving your day job to focus on real estate investing? If so, when’s your leave by date?

If you have already built a real estate portfolio and left the 9-5 job behind, what advice would you pass on?