Sounds like a dream job posting right?
Of course it does, because that’s exactly what it is, a dream… No one is advertising to hire “real estate investors” without expecting them to be one of the following: a) money (investment) partners or b) a cog in their already established business.
Sure, an established investor may need someone with capital to partner up with to do more deals or a bird dog to scout properties for them, but the JOB of being a full-time real estate investor is one that you carve out for yourself.
It takes time to build up your investment business to the point that it can sustain you without the need to have a traditional job. How quickly you get this point depends on a lot of factors. An investor looking to replace a monthly income of $10K through single family rentals will have a longer road than say the wholesaler who’s trying to replace a $40K per year income and is fine with the income clock resetting to zero at the end of every month.
Seeing as there’s no magic, universal formula for quitting your job, knowing WHEN is going to come down to numbers and risk tolerance. Either way, depending on your chosen niche, you’re going to have to do a bit of math…
Target Monthly Income ÷ Average Monthly Cash Flow per Rental = # of Investment Properties
So, if you’re looking to earn 6K per month passively and you typically cash flow $300 per property AFTER expenses, you’re going to need a portfolio of 20 homes to walk away from your 9-5.
Target Annual Income ÷ Average Profit per Wholesale or Flip = # of Yearly Transactions
For the wholesaler or flipper, you’re going to need to figure out what you need to earn per year and divide it by your average profit per deal. If you average a wholesale fee of $5K and want to earn $50K this year, of course you’ll need to do 10 deals. Working backwards from there, consider the number of leads you need to generate to close 10 deals – THAT becomes your primary focus and the “replicable and repeatable” system to help get you off the boss’s time clock.
Also, look a little closer and you’ll notice that for the buy and hold Investor, the target income is broken down per month, whereas for the wholesaler and flipper it’s based on a yearly basis. The reason for this is that rentals are typically consistent, besides some vacancy in between tenants, your income monthly is fairly stable. For the fix and flipper or wholesaler, it’s a little harder to close deals each and every month, especially if you’re just starting out.
You may go three months without a good deal and then have two fall into your lap within an afternoon from marketing you did six months ago. So breaking up your income on an annual basis is a great way to stave off a panic when you have a few dry months. And because of the nature of the fix and flip business model, the flipper has to have a bit more risk tolerance than the buy and hold investor.
PROPERTY LOCATORS WANTED
Setting up yourself to walk away from your job starts from day one…
You have to build your business into one that has replicable and repeatable systems that will allow you to scale up as your experience and capital allows.
If you’re able to create one closed deal by marketing and speaking with a few distressed sellers, you should be able to repeat that success. Documenting the steps you took to close the deal and repeating those steps are how you grow.
In addition, the professional investor has a strong team in place to help close more deals than the competition…
…and beyond are all essential cogs the machine of the professional investor. You simply can’t do it all by yourself and understanding this from day one is CRUCIAL!
Making the transition from 9-5 worker to full-time real estate investor is a dream of many entering the business. Getting to that point is one that takes planning, dedication, and hard work. Taking the time to understand both your financial needs and what it will take achieve them within your chosen niche is crucial.
If the ultimate goal is to not have to chase deals monthly no matter what your chosen niche is today, at some point you will have to start building your investment portfolio. A wholesaler or flipper can still do deals while adding a few rental properties to their portfolio – especially with a reliable funding source like transitional funding, private money lenders, or hard money lender. Doing this over time will allow for you to build a consistent passive monthly income while living off the proceeds from your flips. There’s nothing tying you to one niche as an investor, this is your business and you can expand at will.
As you get some experience under your belt, every property should be considered for it’s highest and best use, i.e., how to wring the most return of every property using a variety of strategies? Of course, this is dependent on where you are in your investment career at the time – but when you take the time to give each property careful consideration for how you can maximize your return, you’ll find yourself seeking creative deal structuring, new partnerships, and funding possibilities.
Contact us if you are interested in becoming an investor firstname.lastname@example.org or call us at 844-FLIP-DIVas.
Here you’ll learn and network with full-time real estate investors, learning while you earn from the pros from the comfort of your home. Hating your 9-5 is a problem many of us have or have had at some point until we decided to make a permanent change. You have everything you need in front of you to turn your side business into your main one if you’re willing to dedicate the time and effort to make it happen.