The first thing we tell you is “don’t quit your day job.” But you just won’t listen to me so the next thing I’ll tell you is “how to quit your day job.”
Passion is overrated. Job stability is underrated. Financial security is a big plus in life. Your real estate career will take off and blossom if you can stay in your job while you get started. You’ll enjoy financial security and the luxury of easing into offer-making. This is clearly the best way to do it. So who cares if you stay at a meaningless or boring job for another year or two? I assure you you will prefer the boredom over the anxiety of not being able to pay all your bills.
Today I’ll give you a glide path that takes into consideration everything you’ll need to think about as you make this big life transition.
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News and Resources:
Starr Has Questions:
- Emily, Wayne, PA, “I’ve done three flips in the past two years. I really want to quit my job and do this full time, but I need to do four to five flips in a year to do that. How do I get to that level?”
- Aldo, McDonough, GA “I bought a home in 2010 and today homes in the neighborhood are selling for almost three times what I paid for mine. Should I sell now while the price is high?”
Blessing of the Day
May the hinges of our friendship never grow rusty.
Expected Air Date: Fri 8/26/2022
[0:00] The first thing we tell you is don’t quit your day job but some of you are just like my kids when they were teenagers you just won’t listen to me so the next thing I need to tell you is how to quit your day job and that’s what we’re gonna do today,
On flipping American.
[0:34] Real estate. Wherever you are, whatever your situation, there is an opportunity for you and now, here’s that flipping America guy, Roger Blankenship. Thank you, Kathy Curtis. Hello, America.
Job stability is underrated. Financial security is a huge plus in life.
You’ll also enjoy financial security and the luxury of easing into the entire offer making process in the pipeline cycle of your real estate. This is clearly the best way to do it.
So who cares if you stay at a meaningless or boring job for another year or two I assure you,
You will prefer the boredom over the anxiety of not being able to pay all your bills,
Today I’m gonna give you a glide path that takes into consideration everything you’re gonna need to think about as you make this big life transition.
[1:41] If you wanna follow us at Flipping America you can.
If you have questions about real estate or real estate investing, you can send them to questions at flipping America. Net,
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[2:38] What kind of brought on the topic for today is this question that came in to star and.
It’s Emily from Wayne Pennsylvania. I’ve done three flips in the past 2 years. I really want to quit my job and do this full time. But I need to do four to five flips in a year to do that and I’m glad you thought about that. She says how do I get to that level
Alright, Emily. We’re going to dedicate this show to you today and we’re gonna talk about how to get to that level because we do have other people who want to know
First of all I want to just say that the best time to quit is when your business income and your net,
Salary do you out of your business is 125. Times your living expensive one and a quarter times because.
It’s a little uncertain and you do have some higher expenses now that you’re self employed.
[3:29] So, you don’t wanna go for 100% replacement. You want 125%,
It’s you gotta be able to make this go the worst thing you could do is just go ahead and quit your job,
Please please please don’t do that I know that your job may not be interesting your job may not be meaningful your job may not be fulfilling but the job certainly is filling,
If it pays you enough to live on. And I know that you may not be making as much money as you want either. And that’s alright.
This is a get rich,
Slowly type of thing,
So, I’m gonna help you, okay?
And accelerate it, you know, put the pedal to the metal, floor it on the on ramp, okay? And I would also suggest.
[4:43] Since in this economy as I’m now speaking there are a lot of jobs going unmet take anything you have to to keep the lights on,
And use every minute of spare time to accelerate the process,
Don’t let your family or you starve or don’t your credit get damaged because that’s gonna be important to you. It’s easy to damage and hard to repair.
[5:09] Take anything that you have to to keep the lights on. You know, there was a time where I went by and saw the guys saying that the street corner,
I guess I would do anything I needed to feed my family but I sure hope it never comes to that but you know, if it comes to that,
Do what you have to do.
The first question I want you to ask yourself is,
And I’m thinking in terms of dollars. Sit down with your significant other if you have one and kinda map it out. Pencil and paper. Spreadsheet if you really must but pencil and paper’s fine and figure out what do you really need?
Are you making enough in your current job.
Not before you get to the end of this show but almost,
Because this talks about the process that we’re gonna use to get there. So, ask how much you need and then the next question is, what do you have?
[6:37] What you have is going to seriously affect how quickly you can get rolling and be able to quit your job. Your assets are going to greatly,
There aren’t really ramps that have multiple points of entry I’ve seen some ramps in the Atlanta area where you may be on a ramp on your way to the interstate and then another ramp joins you but I’ve never seen that happen more than a couple of times.
We’re gonna use that sort of as a metaphor here. It’s the on ramp to self employment in real estate but there are several points of entry.
And the first point is.
The next point is.
[7:31] And the next point of entry is you’ve got money and skills.
And the next point is you’ve got backers and we’re gonna take the time to look at all of these
Positions and what it means for you and what you need to do in order to get on to that on ramp and get going with your career depending on where you enter the ramp
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[8:47] Ok to recap now just remind you where we’ve come from we’ve got an on ramp into quitting your job and in this on ramp we’ve got several points of potential entry,
Five of them actually. If you’re broke, you come in at one part. You got the longest ramp.
If you have a little bit of money but less than 15 1000 you come in a little bit further down the ramp but you still have a long way to go if you come in with money,
You’re down the ramp. If you come in with money and skills, you’re further down the ramp and if you come in with backers already,
Still wouldn’t do it. I wouldn’t quit my job even then. Until we’ve proven that we can make the money even with our backers. So let’s,
Go back and start with broke if you’re broke you wanna get into this game and you wanna make a career out of it what can you do if you’re broke.
[9:38] Number one.
[9:48] Get your feet on the street start make it meeting with potential sellers and learn how to structure the deal and and put the deal out there and well even before you learn how to even meet with the sellers maybe you can just find possibilities,
And point experienced investors to them and they’ll pay you a finder’s fee,
If you remember the movie Fargo the guy didn’t have any money he found a good deal he had a lot of potential,
But he wanted to be a 50 50 partner in the,
Table is the exposure to the property take a finders fee move on,
And know that one of these days you’ll be the it’ll be in that other position you’ll be paying out to find your ski and you’ll be making the big bucks,
But when you’re starting out just take your finder’s fee save your money,
Then you can learn how to do some creative deal structures and or put together some acquisitions of your own.
[10:51] You know maybe do learn subject too or sell or financing.
Keep your W two job. Save your money from that. Do the things that it said to do and rich Hispanic Babylon book that you’re gonna go read. And,
Save your money and then you can also take on wholesaling after you get a little bit more skills you can actually put properties under contract.
[11:23] And it then when you get really advanced as a wholesale, you can even learn how to do double closings.
If you got a little bit little bit of money but still less than $15 thousand you have some other things that you can do you can start out a little bit further down the road.
As i go down this entrance ramp to the interstate.
[11:50] You’re in a career, you’re in your new career.
Are not broke but have less than 15 1000. You can do all of the things I just talked about.
In addition you maybe have enough money to partner with a rehabber putting a little bit of money into a project maybe a fix and flip maybe you can put in five or 10 1000 say look just wanna a piece of the profit and and and I wanna hang around and watch how the thing goes I’ll stay all the
A lot of rehabbers will do that,
Be careful. Will you select? Make sure it’s somebody has a good reputation. Somebody that’s not gonna take you for a ride.
Especially if you have less than 15 1000.
Then when you make a little money save your money because your options are still limited when you’re broke or when you have less than 15 1000 so save your money.
You could wholesale some deals when you make money.
[12:52] You can do some options and and leases and subject two types of things that require a little bit of money down.
And you know, there are a lot of places you can go and learn about options, leases, and subject too including flipping America. But whenever you make a little bit of money, save your money.
I help the guy get started,
And when you have, you know, some money, put aside, then, it could be time to quit.
[13:39] And so I really thought that after and it seemed like a smart guy. I’m really, I really thought that after he did that first flip, he would save his money and so forth. The next time I saw him, he was driving a brand new red Mercedes Benz and he didn’t
Pay 45 1000 cash for that.
Oh well I’ll start saving my money on the next one. That is a dangerous thought. It’s a little funny
But it’s dangerous,
You won’t be saving your money and you’re never going to achieve your goal.
Alright now let’s talk about if you’ve got some money we’re talking about more than 15 1000 preferably something around 100 1000.
[14:32] Do you want to turn that into cash now,
Or do you want to cash flow if you wanna turn it into cash now then you’re gonna buy short term opportunities,
Depending on how much cash you have but certainly you have enough for a down payment to get a private money or a hard money loan,
All of the things that you could do when you were broke, we only had 15 1000. Sure, you have all those options. Plus,
Cautiously pursued doing some hard money loans of your own or private money loans of your own. You can fund loans to other investors. Focus your attention on your job and get your money working for you out there. You can also join partnerships.
I put together JV partnerships for almost all of the flips that we do and I provide the expertise on the flip and none of the money.
Yeah that’s because of who I am and where I’ve been,
Anyway you could participate in some of those partnerships you can put them together in your local Ria clubs
And or reach out to the flipping america rear and partner with some of our people there. You have a lot of options when you have money and then when you make money,
Save your money because.
[16:02] If you have money and skills.
But you can also do more aggressive flips,
And even new construction and if you can figure out in this market how to make a profit building new houses you can make a fortune.
Footage but that’s what you have to do to make some money to make some serious money then,
You know, it it’s up to you. The reason I’m not a big fan in case you are a new listener is I don’t like projects that take a year to do,
I wanna be in and out, moving the money, keeping my investors happy, keeping myself happy, and also keep in my attention span,
Because it’s hard for me to stay focused on a project for a full year.
[17:04] It’s just the nature of who I am.
You know, I am actually leaving tomorrow after this is record. The show is recorded. I’m leaving to,
Go to a different state and I’m gonna spend a day looking at properties and then the next day I’m going to another different state and I’m gonna spend some time looking at
Right now, you don’t need to know.
[17:43] Save your money.
[17:53] Then, all of the options are available to you.
Start with lower things and,
Prove to yourself that you can make it happen in make your backers the return that they’re looking for and then when you make money from this.
Of course I want you to save your money but I also think you should invest your money and and and what you say? Well, invest your money in cash flowing. Properties. If you have backers,
Now, this is I’m gonna let you in on a.
A little secret that’s been a part of what I have done for the last 20 years cuz I started this business in backers 20 years with backers 20 years ago and I still have backers today.
[18:46] These are people who put up the money for the projects and we split the profits and one way or another either either through private loans.
[19:00] The secret is.
[19:04] I will always are almost always do my flips with money from backers and the profits that I make I will use to buy cash flow.
[19:14] That’s being an investor doing the flip is basically running a real estate rehab business.
It’s not really investing because you’re actually working it. You’re
Taking phone calls and taking meetings and going to the site and doing things,
And that’s when you’re investing in that is how you grow wealthy in this business.
When you got a little bit of money, then you could partner with a rehabper and do a deal. Continue wholesaling, continue doing all the others. Once you graduated to wholesaling, you don’t need to go back to bird dogging. Oh, oh.
[20:10] I still a bird dog different asset classes now after 20 years and thousands of deals if it’s a different asset class i’m not gonna,
Tied up under contract and try to sell that contract,
Options leases and subject to. If you have money, remember, you have to make a decision, cash flower, cash now, cash now is something that involves a quick turn property like a flip but cash flow is where you’re investing in rental properties.
Apartment syndications that sort of thing. Money and skills you got all the options available too. You can do a bigger project or you expand your territory and then if you have backers, you have all the options open to you.
And I have suggested that you use the backer money for your short term projects and then use your money to invest in cash flow,
Now that brings us to a.
[21:12] As unlikely as it seems to be given state of unemployment in our economy right now,
The second thing you do is look out for your credit rating take any job that you can find even if it’s something that you hate,
Even if it’s something that there’s no future in take it for now.
[21:44] Because then you’re gonna get the opportunity to invest in real estate and you know one of the things that I’ve noticed is when you have money.
Make a little,
If you were thinking about quitting your day job 100 you wanna be consistently making 125% of your current income and I also add to this I think that you should have,
In saving somewhere before you quit I think ideally you would have 6 months now it’s unlikely that you’re gonna go 6 months without a payday
In your new career but
That gives you plenty of cushion but 3 months is a minimum because you could go 3 months without a payday in the business ask me how I know
Yeah I’ve got the T shirt no,
I’ve been there many times. I’ve gone 3 months without a payday and if you don’t have a big enough cushion, it can get pretty stressful.
[22:58] And then you get to a certain age which I have passed and going back to a W two job is not even really an option,
Because no one wants to hire someone who is as old as I am right now and that’s okay because we have,
You know, follow these rules ourselves. We have built up preserves. We’ve tried to.
[23:30] A quick word about a course that we’ve got called Create the Life that you want and then I’ve got another question.
[24:02] Of the year and most of us know the pain and maybe the self-inflicted shame of not reaching those goals.
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I sold a house to a guy,
[26:08] I would see Aldo and that’s a little bit of an unusual name and I would talk to him when I was in the restaurant and I was there a lot.
Then, I got a contract on this property and I didn’t really pay that much attention to the name but then when I showed up with the closing, this was back when I still went to closings. There he was. How interesting? Well, I just got an Email from Aldo,
And he said the house that he bought from me.
Back in 2010 no surprise there.
[26:47] Should you keep on hanging on? Well, you know, the answer to that is like an adult diaper commercial. Although, it depends.
[26:57] That’s the answer to a lot of real estate question. It just depends.
Are you going to downsize? Are you going to?
Upsize or you’re not old enough really to think about a retirement community. I don’t remember you being much more than a kid when you bought this house from me.
[27:27] The thing about it is, if you sell now, yeah, great. But you gotta buy something else.
So and you’re buying at a time when prices are high and interest rates are high.
Ideal for you in it to sell even though the house is worth a whole lot more.
And this brings to my mind a rule that I think we should keep in mind. When you’re talking about your own home where you live.
What’s going on in the marketplace as a whole shouldn’t be a driving factor in your decision to buy or sell if you need a home buy,
If you are ready to move sell.
Now if in I think we probably change our way of thinking about this during the collapse of 2008 to 2012 when.
You couldn’t sell because you were upside down. Those days are long gone.
[28:36] There is a compelling reason for you to stay in a home that you no longer need or want. Now, the truth is, if you’ve been there for less than 5 years, you haven’t paid down enough of your mortgage to really.
Make a whole lot that way equity wise but the values have gone up so dramatically over the last 5 years that you.
[29:15] That brings us to the end of our show today my friends I hope that the thoughts here have helped you and here is an Irish blessing for today.
[29:24] May the hinges of our relationship.
[29:30] I like it.
[29:37] You’ve been listening to Flipping America real estate investing for everyone. Listen three times a week on stations across the country or on the flipping America.