@Cody Petersen Thanks for the reply! :) I definitely want to be in RE long term, but I'm not sure how long I'd want to be a full time agent. Ideally, being an agent would allow me to gain more experience and connections in the RE investment world which I could then apply to my own investments and then I could be a full time investor in the future. That's one of my main reasons of looking into becoming an agent, plus the 'infinite' cap of a salary is attractive and would allow me to grow my capital faster than most W2 jobs I'd be able to secure. There's just so many different avenues that it's difficult to choose one! I think I'm going to dive into being a full time agent and see where it takes me. We should definitely stay in touch!
@Caleb Brown Thanks for taking the time to reply! I love your insight, it's reassuring because I am really leaning towards becoming a full time agent . It's such a big leap, but I'm luckily in a position where I can be comfortable while getting things off the ground, so I think I'm going to go for it. I see you're in the Blue Springs area, we should keep in touch and maybe hit some local RE meetups!
Hey BP, I'm in need of your opinions and advice! :)
So, my question is: Should I be full time RE Agent, or should I find a W2 job and be an agent on the side? I know a lot of people say that it's difficult being a part time agent, but I primarily work with investors and I'm not always on call like 'typical' agents. And if you suggest I should get a W2 on top of being an agent, should it be a real estate related W2 job?
Here is a little background on me to help form your opinion: I'm 20 years old and located in Kansas City. I am currently unemployed due to my previous department being cut from the real estate investment firm I was working at. I DO have my KS real estate license, but I still need to affiliate with a broker. I have a lot of real estate connections and experience, so I could fit well into another W2 real estate investment firm if I can find an open position. I still live with my parents, so I could bare the 100% commission pay being an agent, but I am looking to purchase a MFH to house hack within the next 2 years so that may make it difficult to get a FHA loan. I am also thinking of going back to being a full time automotive mechanic (I am trained and experienced in automotive work and used to be a mechanic before I took the position at the REI firm) and being an agent on the side.
So what would would you guys do? Full time agent? Part time? Find a W2 RE job, or go back to being a mechanic and work in RE part time? Please let me know what you guys think! :)
From my experience, it will be best to see why she wants to back out of the deal and go from there. If she was offered more money from another investor/wholesaler, could you beat/match that offer and still keep the contract with her? If she won't give you the reason or if you can't beat the offer, it may not be worth continuing with the deal. It will be difficult working them and may not go through with any part of closing. Depending on how strong your contract is, you could potentially take legal action against them for breach of contract if they sign with someone else and/or back out, but that is costly and takes a lot of time.
@Account Closed
I know I'm generally short on the sunshine and rainbows, but I'm not here to blow smoke up anybody's crack, and this is what I've gotten from this thread so far.
So you mentioned why the flip team you were on failed: the acquisition team (which you were on) was buying stuff that the construction team couldn't keep up with. So the investors running the show tightened the acquisition requirements and asked you to find stuff that was worth more and didn't need as much work. And you knew that wasn't sustainable.
You called your time on that team "killing it." Were you, really? Only by the requirements of a failed operation, it sounds like. I think you need to look at that squarely, head on. A few guys who ended up being proved out as losers told you that you were doing well. This does not mean that you are a loser or a winner. It just means that you can't measure yourself with a loser's yardstick and call yourself a winner.
Derrin, I would say that this clearly indicates that you do not fully understand what the construction team is going through. The work, the processes, the jobsite politics, the scheduling, what goes into the work of flipping a property. And if you don't really know what's involved in flipping a property, do you know what's involved in turning it into a productive and reliable rental?
Maybe that should be your next step. Working on the renovation/maintenance side of the business for a while. It's not just the work, it's the scheduling, how the different tradesmen work with each other, the jobsite politics, how the team leads work with their guys, there's a lot that goes into it that I think too many new investors ignore to their peril.
Hey, Jim!
I can totally see where you are coming from. I was a bit vague with my reasonings as to why the company decided to close its acquisitions department since it is apart of my short term confidentiality clause that I agreed to.
We had a strict set of metrics we had to hit in order for us to proceed on a deal; multiple of which had to do with the amount of rehab and if the profit would be worth it in the end. I made sure to run all my numbers properly, and passed on 80% of the properties I encountered because of the amount of work they needed. It didn't fail because we were buying a lot of houses that needed a lot of work. The flipping side of the company didn't come to a point where it failed at all, actually. Things just took longer than the company wanted. We actually got through rehabs relatively quickly, but we just acquired so many that they were always backed up.
The company operated for over a decade with that structure, and it just so happened they wanted to change the direction of the company once I was there since I overwhelmed them even further. I knew it wasn't sustainable because we weren't able to close on properties quickly. With that said, I figured they would do the obvious: find a way to rehab more properties. I know it isn't as easy as it sounds. I've been in jobs that operate similar to construction for years. I've done construction/rehab on the side. I know a 'decent' amount, and I understand how things can go with construction, but I agree with you. I would love to learn more about how things operate on a day to day basis and how things could be optimized. I'm just not sure what else I could've done, because I was meeting everyone's needs.
Now, I would love to focus on the renovation side of things. Once I begin my own flips (whenever that may be), I will be super excited, yet nervous, to begin subbing out rehabs and seeing how it really operates. In the meantime, do you have any advice/suggestions on how to go about learning more of that side of flipping?
You definitely have the drive to become a successful agent. You should work as an actual agent and do investing on the side as you have the money. You were actually working for someone else before, even if you got paid on commission--while you were technically in real estate, you weren't an investor. And that's okay. A lot of people have this nutty idea that they will get one house and quit their job. And then what? Live on beans and rice forever and tell everyone they're "early retired" living on passive income? Use the job! Learn the market! Acquire the best properties for your goals over time! The world is your oyster. ;) lol
Honestly, if you got your first fourplex in 2 years...then your next one five years later...then another three years later...you'd have 12 doors in less than 10 years, which would be fabulous. You want a lot more money just hanging out in the bank than you probably think at your age. I personally wouldn't quit my day job until I was netting more than $100k a year on my rentals, and after self-insurance and the rest, that would be pretty beans and rice if I was still trying to save like $25k a year for more investments. It just takes a whole lot more money than you think to have a nice life on rental income. Like $200k a year before a big capex expense wouldn't make me groan because I'm now not able to buy my next unit when I hoped. That can be 50 doors...or more. 50 doors gives you a very comfortable middle-class lifestyle from cashflow and then a bangin' wealth level. A real estate millionaire is wealthy according to normal standards, but they aren't rich in terms of income. You can turn your wealth into income, of course, but then it's not wealth anymore. lol.
People quit their jobs way too fast. I like watching one guy who buys houses for less than $20k and rehabs them from the inside out completely by himself for less than $15k and then rents them out....for all of $600/mo, because that's the rate in that area. Seeing all the work he does, and all the time it takes him, and the fairly low resale value of the houses, it just kills me. He's happy, he's debt-free, he does woodworking on the side for more income and youtube as well with sponsorships, but all of that incredible work for a measly $2000 a month he's up to now after years, when he's spending so much on the cost of the rehabs and so much on the houses (which is a lot when you're only making $2k per month) is just mind-blowing to me. If I busted my butt for nearly 10 years, I'd want some actual creature comforts by the end of that, not making "bored cashier"-type money. There's nothing at all wrong with being a cashier, of course, but it's a far cry from killing yourself working 12 hours a day.
I could possibly see myself becoming an full time realtor since it will benefit me in many ways, but right now I feel much more inclined in the acquisition, investing, and flipping parts of real estate. This choice is tough, especially since I wasn't expecting to make such a big decision all of a sudden. Being my age, I know I have time as my advantage, but I've talked to hundreds of people that wish they were able to get started in REI at my age, and it makes me feel like I need to make something happen soon.
I know I won't be financially free after 1-2 properties, and I know it's going to take a LOT of time and work to get to that point of being "financially free". Maybe I phrased my words wrong when I asked "how to become self dependent in real estate" in my original post. I am not meaning I want to retire early, in fact, I want to do just the opposite. I want to work my A$$ off in real estate, but I'm not sure what path to take in order to be able to do it on my own. Working for someone established is great, but this sudden company closure has shown to me that no matter how established someone is, you're still relying on them and it can come to a sudden halt. I'm still open to working for someone, but I still want to begin my own journey in real estate investing so I can have another source of income and another option to devote my time and effort into if needed.
I'm really looking into a MFH house-hack since it's the easiest way to begin my portfolio. However, I still live with my parents for little to no cost, and they aren't pressuring me to move out any time soon. This makes me wonder if I should just buy a SFH with a conventional loan that needs cosmetic updates, fix it up a bit for some sweat equity, and rent it out or sell it. It would eat heavily into my savings though, so that's my only hold back.
If all else fails, I could go back to manual labor as a job, but I'd be really upset if things got to that point. I worked intense jobs for 5 years hoping to someday transition into real estate, and it'd really suck to go back.
I'm just sort of baffled at where you think the money is coming from for you to acquire these properties to begin with. House-hacking can be great, but....where's your down payment and proof of income for the conventional loan?
It is not actually simple or easy to house-hack a SFH into a legit MFH. You have zoning, first of all, that excludes it in many jurisdictions. You have lots of contractor expenses--and heavy costs, dividing utilities, adding kitchens. You really need to know construction. Most SFHs just don't cashflow as rentals, either.
I'm also a weeeee bit concerned with the idea of sweat equity when you are 19 with no construction experience. I learned on my first house, poor new owners. looool. And I had a contractor who stood beside me and taught me the whole time. It can be a lot harder to learn to do stuff well than you might think.
How will you pay for health insurance?
Without active income, you don't get a 401-k, and that really matters, too.
You weren't an investor before. You were an employee. Probably a contractor, actually. This is a totally different thing. You will make so much better money as a real estate agent than as a grunt for a fly-by-night wholesaler. It may seem exciting to get those deals, but they weren't your deals. They belonged to the investors. Get your license and work for a big RE office. That's the job I mean that you should do--not being a mechanic again. There's nothing wrong with being a mechanic, but unless you own your own shop or specialize in big trucks, the pay and benefits aren't very good, and you can easily outdo that with real estate.
I totally understand all of your concerns! I may not be giving the best details, I just hate boring everyone to death lol. I was pre-approved for a FHA loan for $400,000 and I am continuously adding to my savings for when I am ready to invest in my own property. I have great credit as well. Unfortunately, now that I don't have a steady income anymore, I'd have a tough time getting approved again. Right, I get I wasn't the investor, but it's been a pretty loose term since a lot of wholesalers have gotten apt to use it, so that is why used it.
Also, I'm aware of the concerns with converting a SFH to a MFH, but that is not what I was saying. I was contemplating if I should buy a MFH first OR buy a SFH. If I bought a SFH, I could build sweat equity and rent it out, since I'd still be able to live with my parents until I saved up enough to buy a MFH and house-hack. I have plenty of construction/rehab knowledge, and I have all the tools to do so. My dad taught me and I've done plenty of projects with him, and he'd be another viable resource if needed.
So, I sadly have never had health insurance or a 401k, so I'm not too worried about going without those for a little bit longer. I was a full time employee for said company. I did acquire all the deals that allowed the company to function. I did only receive a small portion of profit for each deal, but it proved that I could do it. I'm not opposed to becoming an agent, I just want to explore other options before making a choice. I'm going to get my courses done ASAP and look further into becoming an agent. Do you have any tips on becoming a successful agent and choosing a good brokerage to work with?
You've had a super interesting journey in such a short time and you've already experienced more about real estate than most people ever will! I agree with others that getting your license is a logical next step and with your hustle you will no doubt kill it, but only if you actually want to work as a realtor. If being a realtor doesn't sound stimulating to you then I would just look for the highest paying job that you can find (and flexible hours are helpful too). Unfortunately you're going to have to work until you can afford enough investments to support you financially.
Hey Brian!
I agree, my short time in real estate has been a super interesting time to say the least. I am more than grateful for the opportunity I was given, and I wish it lasted longer than it did, but things happen for a reason. I know that I could make being a realtor work if needed, especially with my ability to build great rapport and ability to work with clients/customers, but it doesn't particularly interest me as much as the investing side does. I am going to get my license regardless, as I know it will benefit me in the long run, so I will definitely keep it in mind.
As far as a high paying job, I am on the lookout for one, but not sure what path I want to take. I really want to stay in the real estate realm. I have a few connections I could try, but if all else fails, I could go back into manual labor and continue saving my money up. This is not what I want to do though. I know I could establish my own business and make my ends meet until I am able to optimize and begin figuring out how to increase my income, but once again, it comes down to me not know what path to take and where to get started. I feel like "I am trying to build highways before I invent the car". As mentioned in my reply above, I know I won't be financially free after 1-2 properties, and I know it's going to take a LOT of time and work to get to that point. My ideal outcome is working for myself in real estate (whether it be flipping, wholesaling, agent, etc.) and being able to provide for myself while building a business that will allow me to begin investing in my own real estate portfolio. I'm not in this to get rich quick and retire early. I want to work, and I want to work hard. I just don't know where to put the effort to gain the greatest reward.
You definitely have the drive to become a successful agent. You should work as an actual agent and do investing on the side as you have the money. You were actually working for someone else before, even if you got paid on commission--while you were technically in real estate, you weren't an investor. And that's okay. A lot of people have this nutty idea that they will get one house and quit their job. And then what? Live on beans and rice forever and tell everyone they're "early retired" living on passive income? Use the job! Learn the market! Acquire the best properties for your goals over time! The world is your oyster. ;) lol
Honestly, if you got your first fourplex in 2 years...then your next one five years later...then another three years later...you'd have 12 doors in less than 10 years, which would be fabulous. You want a lot more money just hanging out in the bank than you probably think at your age. I personally wouldn't quit my day job until I was netting more than $100k a year on my rentals, and after self-insurance and the rest, that would be pretty beans and rice if I was still trying to save like $25k a year for more investments. It just takes a whole lot more money than you think to have a nice life on rental income. Like $200k a year before a big capex expense wouldn't make me groan because I'm now not able to buy my next unit when I hoped. That can be 50 doors...or more. 50 doors gives you a very comfortable middle-class lifestyle from cashflow and then a bangin' wealth level. A real estate millionaire is wealthy according to normal standards, but they aren't rich in terms of income. You can turn your wealth into income, of course, but then it's not wealth anymore. lol.
People quit their jobs way too fast. I like watching one guy who buys houses for less than $20k and rehabs them from the inside out completely by himself for less than $15k and then rents them out....for all of $600/mo, because that's the rate in that area. Seeing all the work he does, and all the time it takes him, and the fairly low resale value of the houses, it just kills me. He's happy, he's debt-free, he does woodworking on the side for more income and youtube as well with sponsorships, but all of that incredible work for a measly $2000 a month he's up to now after years, when he's spending so much on the cost of the rehabs and so much on the houses (which is a lot when you're only making $2k per month) is just mind-blowing to me. If I busted my butt for nearly 10 years, I'd want some actual creature comforts by the end of that, not making "bored cashier"-type money. There's nothing at all wrong with being a cashier, of course, but it's a far cry from killing yourself working 12 hours a day.
I could possibly see myself becoming an full time realtor since it will benefit me in many ways, but right now I feel much more inclined in the acquisition, investing, and flipping parts of real estate. This choice is tough, especially since I wasn't expecting to make such a big decision all of a sudden. Being my age, I know I have time as my advantage, but I've talked to hundreds of people that wish they were able to get started in REI at my age, and it makes me feel like I need to make something happen soon.
I know I won't be financially free after 1-2 properties, and I know it's going to take a LOT of time and work to get to that point of being "financially free". Maybe I phrased my words wrong when I asked "how to become self dependent in real estate" in my original post. I am not meaning I want to retire early, in fact, I want to do just the opposite. I want to work my A$$ off in real estate, but I'm not sure what path to take in order to be able to do it on my own. Working for someone established is great, but this sudden company closure has shown to me that no matter how established someone is, you're still relying on them and it can come to a sudden halt. I'm still open to working for someone, but I still want to begin my own journey in real estate investing so I can have another source of income and another option to devote my time and effort into if needed.
I'm really looking into a MFH house-hack since it's the easiest way to begin my portfolio. However, I still live with my parents for little to no cost, and they aren't pressuring me to move out any time soon. This makes me wonder if I should just buy a SFH with a conventional loan that needs cosmetic updates, fix it up a bit for some sweat equity, and rent it out or sell it. It would eat heavily into my savings though, so that's my only hold back.
If all else fails, I could go back to manual labor as a job, but I'd be really upset if things got to that point. I worked intense jobs for 5 years hoping to someday transition into real estate, and it'd really suck to go back.
That's awesome!! Congratulations on your success, I'd love to get to that point. Would love to stay connected with you too, especially since you're not too far from me. I'll DM you my email/number :)
I would become an agent. I am 21 and have been licensed since I was 18. Your grit and hustle will pay off. With being an agent you can grow the business with how much work you put in. You can find the deals like you were and network with investors to close them. From there save till you can invest.
It's awesome that you mention that, because I am currently going through my two 30 hour courses so I can get my license. I plan on getting KS first, then MO. I am super excited to see how that comes into play in the future. What strategies do you recommend that utilizes your license? I am mainly getting it to gain MLS access, network, help friends/family buy/sell their properties, and to be able to buy/sell my own properties and save the commission.