Posted over 2 years ago

How Real Estate Allowed me to Quit my Full-time Job and Work Part Time

Do you ever dream of stepping out of the corporate rat race so that you have more time and flexibility to pursue your own interest, but know you can’t afford to quit your job right now? There is hope and you can do it with good planning and hard work. Two years ago I transitioned out of my full-time job as an internal auditor at a health insurer into a part-time position in the corporate world. The following year my wife was able to quit her job and be a full-time stay-at-home mom for our three children. We were able to do this because of our real estate investments.

This was not a get rich quick scheme or an overnight success, but a 10 year journey of making disciplined real estate investments and living below our means. About 10 years ago I started following Warren Buffett and immediately attached myself to his lessons on value investing and buying assets at discounted prices. I then applied these lesson to real estate instead of the stock market.

A little background on me. I have always had an entrepreneurial drive. Even as a young child I would sell lemonade from my wagon or go door-to-door and sell single marsh mellows out of a bag to my neighbors for a nickel each. I am now 36 years old. I spent my first five years out of college at a regional CPA firm in Chattanooga, Tennessee. I then spent the following eight years at two insurance companies performing internal audits. While I never hopped out of bed thrilled to go to work at my corporate jobs, they did have several advantages that I recommend young entrepreneurs consider before going out on their own.

  • 1.W-2 Paycheck – It provides you a W-2 paycheck that is steady and that banks will like to see when making real estate loans. Use this paycheck to provide seed money on your first few deals.
  • 2.Experience – I have learned so much about business systems, what successful businesses do vs. what unsuccessful business don’t do, networked with lots of smart and successful people, and also learned the things I don’t like about working in a corporation.
  • 3.Workplace Benefits – Corporate benefits are fantastic. Health insurance, 401(k) contributions, life and disability insurance, paid time off, etc. You don’t get these benefits paid for when you are self employed.

So during my time working full-time in my corporate job I was hustling on nights and weekend searching out real estate deals and managing my properties. This resulted in lots of 60+ hour weeks, but I loved the real estate investment game. It didn’t even feel like I was working when I was running my properties.

The two keys to being able to build a cash flowing real estate business are living below your means so that you can take every extra penny you earn to further build your portfolio and buying with a margin of safety. Buying with a margin of safety is essentially buying dollar bills for 65 cents. Even if you buy a house and have several unexpected expenses pop up you’ll have plenty of room to still pay for these and make a profit on the property. It’s important never to pay too much for a property. This removes your margin of safety and causes all sorts of other problems. You make your money when you buy a property. If you aren’t sure about a deal pass on it and wait till you find the deal that you understand and like.

Over the years a few books and websites have been very helpful in shaping my investing mindset and have helped me get to where I am. Below is a list that I recommend you check out if you would like to get started in real estate investing. These are solid resources that are not gurus who sale get rich quick courses, tapes, books and boot camps that are so prevalent in real estate investing.

  • 1.The Essays of Warren Buffett by Lawrence Cunningham – This book summarizes Warren Buffett’s annual letters and does a good job of explaining value investing, margin of safety, and the independent mindset that you must have to be a successful investor.
  • 2.The Millionaire Real Estate Investor by Gary Keller – Book that provides a detail strategy on how to search for properties, analyze cash flows, and accumulate a profitable real estate portfolio.
  • 3.dolinsksite.ru – This is a free real estate forum that is a wealth of knowledge for new and experienced real estate investors. I think of it as “Facebook for real estate investors”. There are forums, weekly podcasts, articles, and blogs that allow you to learn about various real estate situations in a supportive environment.
  • 4.Every Landlord’s Legal Guide by Nolo - This provides a layman’s version of the laws that you will need to follow when renting storage. It even has a section in the appendix that provides state specific requirements when renting.

While real estate investing won’t make you rich overnight, if you are willing to put in the hard work and have the disciplined mindset real estate can help you reach financial freedom.



Comments (2)

  1. Tiny 1398866209 avatar 423chandler

    Hey Pat L. - 

    I agree the book was written about 10 years ago, so there are probably a few parts that could be updated.  However, I still think the main themes and lessons conveyed in the book are applicable today.  

    A few key themes in the book that i think are timeless.

    1. Buy investments well below market price so that you have a margin of safety.

    2. You are going to have look at lots and lots of properties in order to find good deals and learn what is truly a good deal.

    3. As you grow build up a solid network of handymen, CPAs, etc so that you can systemize parts of your business and grow.

    4. Live below your means and using that savings to invest in real estate vs. Spending it on non-income producing assets.

    Thanks,

    Michael


  2. No avatar

    Thanks for the posting, Michael.

    I noticed that the Gary Keller book was written in 2005. Considering how much the real estate market has changed since 2005, do you still think the book is still worth reading vs. other up-to-date books?

    Thanks again,

    Pat