Should
You Do Real Estate Full-Time?
Many
self-acclaimed real estate gurus state that everyone should quit
their jobs and immediately jump into full time real estate
investing. They often claim incredible results from students with
little experience. We would like to caution that life-changing
decisions are not usually simple and that full time investing is
not for everyone. Let's discuss some pros and cons of full-time
versus part-time investing.
The Full-Time Investor
Entering into the real estate profession on a full-time basis
offers several advantages over a part-time commitment. Being
successful requires you to develop knowledge in many aspects of
real estate, and more time focused on real estate leads to greater
knowledge. The more your learn, the more you earn, since you do
not need to rely on as many professional services or partners for
help. You also learn to recognize a deal (or a dud) faster, which
gives you more time to do more business or spend with your family.
As a full-time investor, you work your own hours. When we say
"full-time," that may mean as little as twenty hours per
week if you are good at finding deals. The rest of your time can
be spent pursuing other vocations or hobbies. Or, if you are so
inspired, you can work forty or more hours and use the extra cash
flow to buy rental properties or diversify your holdings in the
stock market. The point is that you need to satisfy your cash flow
needs before you can start "investing" your money.
One final point you should consider is whether you want to be
"self-employed." If you have always worked for someone
else, being your own boss sounds very attractive. In some,
respects, this isn't quite the truth. Being your own boss means
being an accountant, bookkeeper, stock clerk, receptionist and
office manager all-in-one. You have to do deal with tax returns,
payroll, office supplies, customer service, bills and all the
other hassles that come with a business. You don't have friends to
chat with at the water cooler. You don't have paid health
insurance, a company car and a 401(k). You take your problems home
with you every night.
Sound like fun? It is, once you learn how to master your time and
run your business. Being the master of your own life and career is
well worth the other hassles of dealing with your own business.
The Part-Time Investor
The part-time investor holds a "regular job." This may
be by choice or for the time being until his real estate ventures
are bringing in enough cash to quit his job. If it is the latter
reason, don't quit your job because the real estate
"guru" told you so. Quit your job when it is not worth
the income that it brings you. In other words, if you are making
more money per hour flipping properties on the side, you are at
the point that where your regular job is costing you money. Only
then, is it time to quit!
One of the advantages of starting out part-time is that you can
maintain cash flow while learning the business. It may take weeks
or possibly months to find your first deal. That same deal may
take several months to turn around, especially if you decide to
fix it and sell it retail. Think twice before telling your boss
you’re leaving; you will have plenty of time to make the career
switch once you have real estate experience. You may, on the other
hand, like your occupation. If so, continue to work at it, and
invest in real estate on the side.
The best case scenario, if you are married, is to have one spouse
work a regular job. The other spouse work the real estate business
for creating wealth, retirement income and a nice college fund for
the children. Of course, in today's market, you could be laid off
due to unforeseen circumstances. If you earn additional income
flipping houses and invest the proceeds into rental properties,
you will be covered if your main income is lost. This is
especially the case for married women that often forego a career
and raise a family, only to find themselves divorced with no means
of making a living. We don't want to sound cynical about marriage,
but with a fifty-percent divorce rate in America, it never hurts
to have a system for making money.
Someone with a full time job tends to have little free time to
focus on real estate. A part-timer should learn most of the same
skills as a full timer. Thus, the key disadvantage to flipping
properties on a part-time basis is that it takes sacrifice to
learn the business. Something has to give; television, lazy
weekends, meaningless hobbies and even some family activities must
be compromised. As with any education, time spent learning about
real estate will bring its own rewards, especially if the people
in your life understand your goals and your plan to achieve those
goals. If you are married, make sure your spouse reads this
material with you and participates in the fun process of making
money.
Treat Real Estate as A
Business
People are lured to real estate because of the quick buck that it
promises. Don't hold your breath, you won't get rich quick. An
"overnight sensation" usually takes about five years.
More than ninety percent of the people who take a real estate
seminar quit after three months. Real estate investing should be
treated with the seriousness of a career. It takes months, even
years for a business to cultivate customers and have a life of its
own. You need to treat it like any other business.
About the Author .
. .
William Bronchick, CEO of Legalwiz Publications, is a
Nationally-known attorney, author, entrepreneur and speaker. Mr.
Bronchick has been practicing law and real estate since 1990,
having been involved in over 600 transactions. Visit his site at http://www.LegalWiz.com
Thanks for visiting!
Excellent
Service, Outstanding Results!
Oleg Potemkin (RA) Hawaii Realty
Associates, LLC
Ali'i Place, 1099 Alakea
Street, Suite 1520, Honolulu, Oahu, HI 96813
Direct: (808) 398-9987 Fax:
(808) 538-8081 E-mail: info@hawaii-realty.com
