|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
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 youre 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
Copyright 2000 All Rights Reserved. No part of this publication may be copied
or reprinted without the express written permission of the Author.
William Bronchick, Esq.
Back to Real Estate Investing Articles