All Forum Posts by: Skip Gilliam

@Skip Gilliam

You can absolutely leave your job within 2-3 years by investing in real estate (rental property) ... assuming you are able to find attractive buys in your area (I have absolutely no idea what your market looks like). When I started investing my goal wasn't to quit my job, but after about four years I was able to do it anyway.  Having said that, I am going to go out on a limb to say that you will not actually do it ..... no matter how bad you say you want to leave your job. 

That comment is based on me jumping to a conclusion about you from one statement you made

- we just moved in to our new custom home a few months ago. (Paraphrased)

As you focus on replacing your salary and how many "doors" you need to accomplish that, you are ignoring a MUCH more important part of the equation .... Your monthly expenses.... If you were to choose a more modest lifestyle regarding your consumer spending, you would be able to leave your job substantially sooner.... We make choices in life and a lot of those choices are expensive.... I have found that the best things in life truly are free and my most valuable asset is time.  I made the choice to live in a modest home a drive a modest vehicle.... The return on those decisions is priceless... I have an abundance of free time to use as I choose... I wake up in the morning with endless options of how to spend my day.... I wouldn't trade that for a BMW or Mercedes .... But a lot of people do.... In fact, most people do.

Please don't take offense .... As I said it is an observation based on a big assumption from one statement of yours.... But as I watch the world franticly go by on their way to work everyday to pay for all of their possessions .... You can understand how it is easy for me to jump to that conclusion.

I wish you all the best in achieving whatever goals you decide to pursue.

jeff

@Skip Gilliam

Good question.

It wasn't cash, but might as well have been. I bought the house for $10K :) The banks wouldn't work with me at the time. Too small of a loan. I had right at 10K in the bank, so I did a share secured loan. They locked up my 10K for collateral and then loaned me 10K. As I paid down my loan, my original 10K became available to me equally. It was an interesting setup, but it worked. I put about 25K more into with a lot of sweat equity and had it appraised for 75K. I'm closing (TODAY!!) on the cash out refinance for 52K (70% LTV). I'm paying off a 10K LOC i took out on the same house, and after paying closing cost, $38K is going in my pocket. 30 year mortgage on 52K is $261/ month. I'll rent the place for $700. This has worked out well.

@Skip Gilliam

Heres a couple questions/ things to consider...

If you left your job today, could you make it on your wife's income? Beans and rice style if you had to? Or could you rearrage some things so that was possible?

I love real estate and am moving towards full time real estate investing. I currently own and opperate a small landscapig and lawn care company in Hartsville, SC. I hope to be making similar income as you currently do with flipping houses very soon. I whole heartedly believe that much more is possible with the right systems and people in place. There are poeple on this board who do insane ammounts of volume. The sky really is the limit in real estate. It all depends on how you play your cards.

I'm 29 and have been involved in real estate since 2009, but only in the past 2 years become really serious about it, thanks in part to bigger pockets. So, take my advise for what you think it's worth. I'm not a total newbie, but far from an expert.

I've bought 2 properties, and learned a ton on both. I sold one for a $13K profit after renting it for a year and a half. The other one, I rented for a year and a half, rennovated it, and will be closing next week pulling 38K out with a cash out refiance, and renting for $700 a month with a $260/month payment. 

With that kind of money in retirement accounts, it's worth reading up on self directed 401K and self directed IRA's. There are specific rules that must be followed, but you can do some neat stuff there like lending to flippers. With your w2 income, you will be very favorable to banks if you don't already have a ton of debt.

Trying to make a 100K a year? Heres one way that could happen. Team up with a flipper who REALLY knows what they are doing. Do 10 deals a year with $20K profit/ deal. Thats $200K profit. I've seen a lot of 50/50 deals. That would mean the flipper made 100K and you made 100K. Yes, that's a very simplified example, but not unreasonable. Yes, taxes must be considered, which I'm no expert on. I'm doing something very similar to this now with a trusted individual who has the money. I'm working my way up to being able to help people like you as well, but I'm not ready for that yet. Maybe in a year or so, after I have more deals under my belt :) Trust is the big key to something like this. There is a lot of room for bad things to happen, but if it works, it will be beautiful.

The other thing to consider is flipping versus buy and hold. Most people on here will tell you that flipping builds cash and renting builds wealth. My strategy is flips in the short term to build cash to invest in rentals for the long term. 

Spend time on the forums to get a solid grip on the real estate game. Theres a lot to soak up, and it takes time. Listen to the podcast as well. 

Oh, and welcome to the site, Sir!

I have always gotten in excess of 25% return on my cash investment. I only buy duplexes and triplexes. I could never make a SFH work financially so I don't try. I can buy a duplex for the same price as a SFH and get rent off two units. Typically the bigger the place, the more bedrooms, the more I make. I don't have a place with less than $1200/month cash flow/income. My biggest returns come when I buy a place that needs work as I can get it much cheaper and add bedrooms/baths ect through renovation. I also know the rental market extremely well and can spot underpriced rents which impacts ROI.