Should You Do Real Estate Full-Time?

Many self-acclaimed real estate gurus state that everyone should quit their jobs and immediately jump into full time real estate investing. They often claim incredible results from students with little experience. We would like to caution that life-changing decisions are not usually simple and that full time investing is not for everyone. Let’s discuss some pros and cons of full-time versus part-time investing.The Full-Time InvestorEntering into the real estate profession on a full-time basis offers several advantages over a part-time commitment. Being successful requires you to develop knowledge in many aspects of real estate, and more time focused on real estate leads to greater knowledge. The more your learn, the more you earn, since you do not need to rely on as many professional services or partners for help. You also learn to recognize a deal (or a dud) faster, which gives you more time to do more business or spend with your family.As a full-time investor, you work your own hours. When we say “full-time,” that may mean as little as twenty hours per week if you are good at finding deals. The rest of your time can be spent pursuing other vocations or hobbies. Or, if you are so inspired, you can work forty or more hours and use the extra cash flow to buy rental properties or diversify your holdings in the stock market. The point is that you need to satisfy your cash flow needs before you can start “investing” your money.One final point you should consider is whether you want to be “self-employed.” If you have always worked for someone else, being your own boss sounds very attractive. In some, respects, this isn’t quite the truth. Being your own boss means being an accountant, bookkeeper, stock clerk, receptionist and office manager all-in-one. You have to do deal with tax returns, payroll, office supplies, customer service, bills and all the other hassles that come with a business. You don’t have friends to chat with at the water cooler. You don’t have paid health insurance, a company car and a 401(k). You take your problems home with you every night. Sound like fun? It is, once you learn how to master your time and run your business. Being the master of your own life and career is well worth the other hassles of dealing with your own business.The Part-Time InvestorThe part-time investor holds a “regular job.” This may be by choice or for the time being until his real estate ventures are bringing in enough cash to quit his job. If it is the latter reason, don’t quit your job because the real estate “guru” told you so. Quit your job when it is not worth the income that it brings you. In other words, if you are making more money per hour flipping properties on the side, you are at the point that where your regular job is costing you money. Only then, is it time to quit!One of the advantages of starting out part-time is that you can maintain cash flow while learning the business. It may take weeks or possibly months to find your first deal. That same deal may take several months to turn around, especially if you decide to fix it and sell it retail. Think twice before telling your boss you’re leaving; you will have plenty of time to make the career switch once you have real estate experience. You may, on the other hand, like your occupation. If so, continue to work at it, and invest in real estate on the side.The best case scenario, if you are married, is to have one spouse work a regular job. The other spouse work the real estate business for creating wealth, retirement income and a nice college fund for the children. Of course, in today’s market, you could be laid off due to unforeseen circumstances. If you earn additional income flipping houses and invest the proceeds into rental properties, you will be covered if your main income is lost. This is especially the case for married women that often forego a career and raise a family, only to find themselves divorced with no means of making a living. We don’t want to sound cynical about marriage, but with a fifty-percent divorce rate in America, it never hurts to have a system for making money.Someone with a full time job tends to have little free time to focus on real estate. A part-timer should learn most of the same skills as a full timer. Thus, the key disadvantage to flipping properties on a part-time basis is that it takes sacrifice to learn the business. Something has to give; television, lazy weekends, meaningless hobbies and even some family activities must be compromised. As with any education, time spent learning about real estate will bring its own rewards, especially if the people in your life understand your goals and your plan to achieve those goals. If you are married, make sure your spouse reads this material with you and participates in the fun process of making money.Treat Real Estate as a BusinessPeople are lured to real estate because of the quick buck that it promises. Don’t hold your breath, you won’t get rich quick. An “overnight sensation” usually takes about five years. More than ninety percent of the people who take a real estate seminar quit after three months. Real estate investing should be treated with the seriousness of a career. It takes months, even years for a business to cultivate customers and have a life of its own. You need to treat it like any other business.

Starting Your Own Real Estate Business

Real estate is often looked at as a service industry. Most brokers do provide a service. They accompany people who want to buy homes, business property and other properties, but it is a business and well. A for profit business.Real estate forms go beyond landlord tenant forms and purchase agreements. These legal forms are typically governed by local and state law. They have to be worded correctly according to the regulations that are set forth or there could be liable problems down the road, for both the involved parties and the real estate professional. In every state of the union there are licensing agencies for these professionals. To become a licensed real estate professional there are classes and tests that have to be passed to get that license. Al are trained within the locality that they plan on practicing in, in the proper use of these legal forms, wording for the forms and potential ethical dilemmas. The people that work in this profession can also be sued for improper handling of the sale and transfer of property and the legal forms that they prepare. There is a lot of time and effort put forth to become a real estate professional. Building a business out of all this time and effort is a separate task entirely.Most newly licensed real estate agents do not go into business for themselves, they usually work for someone else. As a matter of fact, in most states, a licensed agent or sales person is required to put in a certain amount of hours under a real estate broker. This practice allows the sales person to gain experience and to hone these types of skills. Most folks are not able to start a this kind of a business right away. They have to spend time working under a broker and learning the ropes. Once the time has been put in than there is more testing that is required to get a brokers license. The testing and the class work actually continues through out the professional life of the real estate professional. There is periodic testing done to allow the people that work in this field to keep their license in good standing.It takes not only time and effort to start this kind of a business, but it always takes money. Working from home is an easy solution for an owner but over time with an increase in business it may be required to hire other experienced staff and office support.Delegating duties is one of the keys to owning and operating a real estate business. Office staff can assume a lot of the day to day duties so that sales can be focused on. Some of the day to day duties that an office support person could do is filing, managing legal forms, answering phones, scheduling appointments and doing research into up to date real estate forms like landlord forms and tenant forms and other research.