Posted by Steve on July 01, 2001 at 14:28:46:
Hey Jt, my name is Steve and I’m also a RE Investor and live In Indiana. I read your post, If you need answers to your quetions Feel free to email me at spiderp005@cs.com would’nt mind helping a fellow nieghbor.
Steve,
Is this the time? - Posted by Tommy_FL
Posted by Tommy_FL on July 01, 2001 at 12:26:42:
Hi everyone,
I have been investing in RE the hard way for 2 years now(Carlton Sheets) and now own 3 rental properties…No major problems, so far so good, in middle class neighbourhood, positive cash flow…etc. Then last month, I ordered Ron Legrand’s course (The cash flow generator)and Robert Kiyosaki’s book Rich Dad, Poor Dad. This has given me the urge to QUIT working for someone just for a living and to be an RE entrepreneur full time. My only liabilities are my rental and my residence mortgages which I am thinking of L/O and move into another fixer-upper. I have a car payment but almost no credit cards debts. I have been an Accountant for the last 15 years and do not feel the thrill of going to work any longer. Am I being realistic? I live in SE Florida and the market is HOT. Any word of wisdom please.
Re: Is this the time? [long response] - Posted by Ronald * Starr
Posted by Ronald * Starr on July 01, 2001 at 21:43:51:
Tommmy FL-----------
You’ve gotten good advice already. It sounds like you’d like to quit your job. I can understand that and I think a lot of us would. However, I am sorry to say, I don’t think you are ready for that yet.
Unfortunately, I don’t know much about you except that you are an accountant and own three rental properties. I own several more than that and I don’t have enough income to pay my living expenses. I doubt if you do, Unless you have a big pile or cash you haven’t yet told us about, I think you’re premature to quit your job.
I did that, quitting work without adequate income. After a few years of struggling along, I went back to work. I’m now accumulating rental properties and will likely quit again within a year, hopefully before this year is out. When I have enough income to pay the bills.
I’ve learned on CREONLINE.COM that there are three types of money to be made in real estate: cash flow, mainly rental income; longterm wealth accumulation, mostly properties with equity and prospects of appreciation; and immediate cash, which mostly comes from quick turn-over of properties for more than they cost.
To get away from the job, the latter makes more sense. Develop a system for buying and selling properties rapidly at a profit. Do a few property deals while you continue your job, then go on your own when you have proven you can consistent make money with it.
A few other possibilities. If you enjoy property management, you might get a job as an onsite manager for a small apartment house. If you do a good job of screening renters, you probably will not have too work very hard for your living space and possibly some cash.
Are you a tax accountant? Perhaps you could specialize in working with real estate investors on their tax returns or for a property investment company. You can learn about real estate while making money, both from studying and from your clients or employers. I suppose you could even be a non-tax accountant and work for a property ownership company, doing accounting work for them.
If you study up on notes and cashflows, you could advise people on investing their money, and make money from note brokers for the referrals. If you study up on delinquent tax liens and deeds, you could help people invest money for very good returns, and get some money that way yourself. If you are not the salesman type, perhaps you are the number-slinger type. Then you might want, instead of buying and selling houses, to buy, restructure, and sell notes. This is a number-crunching game, with a lot of time spent on the computer and calculator, and only a little time dealing with people.
But, as far as quiting work entirely now? Probably not. You’re the accountant, why don’t you divide your monthly expenses (less income from the three properties) into the pile of cash you have now on hand? How many months will that last you? Will it finance you for the next year? Because it might take about that long to make some significant money from real estate. Hopefully not, but would you really like to run out of money in five or six months, just when you had a lead on a $40,000 profit property?
While you have the job, you might want to try to get some personal unsecured lines of credit from a few banks. This could be used to buy bargain properties you might run up against. Later, it might come in handy to pay the bills if you are a little short of cash for a few months between payoffs on real estate deals.
My vote? Wait a while. Maybe restructure so you do less at the job and more with real estate. But, from the information you gave, I think you would be better to wait.
Good InvestingRon Starr**
Re: Is this the time? - Posted by JT - IN
Posted by JT - IN on July 01, 2001 at 13:25:43:
I think Ed is “funnin with ya” a bit.
Deciding to make that move a little too early can impede your ability to grow as fast as you like. Be sure that your income is stable enough, from passive investments, at something like 1 1/2 times what you need to live on, leaving room for a vacancy or so, before embarking full time. Even though your JOB is getting in the way, time wise, it is providing a stable income, which allows for you to concentrate on RE on a part-time basis. Be sure, before you make that move.
One last thing, on making that move, is that once you are full-time, then RE investing becomes your job, and no longer an avocation. Even with the best case scenario, there are times that full-time investing will give you some of the same ill feelings and trappings, that you feel about your current JOB. It is just human nature, to want to be somewhere else, than where we are. So, enjoy where you are today and do not rush the move. (As a full-time investor, I sometimes wonder who was supposed to pull the plug on the swamp, as I swim up to my ears in alligators).
Good Luck on your decision.
JT - IN
Re: $3,200,000. Should be - Posted by Ed Copp
Posted by Ed Copp on July 01, 2001 at 13:05:03:
your “net worth” right now, according to the infomercials that I see in my town here lately. You should be O.K. whatever you decide to do…