Re: Quick Life Question… - Posted by Rick, the Probate Guy
Posted by Rick, the Probate Guy on May 25, 2009 at 07:27:08:
Jim - here’s my experience:
When I was about your age (34 to be exact) my employer fired me (because they had this silly rule about people showing up and doing the work they were being paid to do). Anyway, it had sure taken them a long time to get around to firing me and I appreciated them doing it because I didn’t have the guts to quit.
Now, I had been doing real estate on the side for years by that point (sometimes when I should have been doing my j.o.b.) but didn’t have a regular cashflow from rental or resale profits. I wasn’t confident enough to believe that I could make a go if things unless I had a regular income.
A friend help me get a j.o.b. as a loan officer at large mortgage brokerage that specialized in sub-prime mortgages (before the industry had a name!). I was terrible at it, the training sucked, the manager thought that I should be an expert from day one (I guess because I drove a Ferrari convertible in those days).
Anyway, after four months I hadn’t made a dime, I wanted out, they wanted me out, and I was gone.
But not exactly to square one. While I had really learned the business, the seed was planted that:
- I really loved the private money part of lending,
- I could learn it as I went along
- It was very realistic that I make a good enough living at it that I’d have excess funds for which to invest and grow that nest egg.
Jim, I was realistic that before I could be an investor, I had to make a living and pay the bills first. That’s probably most every investor’s initial challenge.
So, I found a small hard-money broker to work for and after a couple of months felt I had enough understanding of the business that I could go off on my own, and that’s what I did. I never regretted it.
And make no bones about it, there are two sides to making money in real estate: Real estate investing and the BUSINESS of real estate. They are not the same.
People who are agents and brokers, appraisers, title and escrow staff, are in the real estate business.
Even people who buy and sell for quick profits, are in the real estate business, not investing, if they don’t hold property or notes. This is real estate speculation. Tell many such a real estate person that they are actually speculators, not investora, and you’ll watch them turn red with anger.
It’s really just professional gambling, the game is real estate, and the gambler hopes the cards are stacked in his/her favor. I’ve gambled countless time on this myself and most of the time I’ve made money.
So, with this in mind, when you have at stake is: your time, your ability to pay your current bills (and perhaps support a family), the opportunity cost of not developing an alternative career, and perhaps your inheritance. Personally, I would take the inheritance part out of the equation and pretend it doesn’t exist. That forces you to make choices based on your ability to make a living now, and perhaps value your education (formally or informally) of real estate, whether it be some facet of the business, or investing, or both.
Your best investment is in your education however you ought to me mindful and realistic that you need an income before you dare invest. And I feel that your best bets will be made with money that you earned in this business rather than money you inherited. (Read this last sentence twice!).
See you at the REI clubs and the seminars!
