Key Takeaways
- It is entirely possible to realize success no matter which path you choose: part time investing or full time investing.
- Part time real estate investing will require a different strategy than full time investing.
- Before you make the transition to a full time real estate investor, make sure you know what you want to accomplish.
Making the transition from a part time to a full time real estate investor is a big decision, and rightfully so: dedicating every waking hour to the real estate industry carries huge implications. So before you go making any rash decisions to abandon your status as a part time real estate investor, mind due diligence and determine exactly what it is you want out of real estate. If for nothing else, part time real estate investing has its benefits, but those that are able to dedicate themselves to the craft could find the transition well worth it.
In dropping the part time real estate investor moniker from your “title,” you are committing to allocating most of your time and all of your projected income into your investing business. While this is certainly the right move for many investors, it may not be for everyone. Like everything else, there are pros and cons to every decision. There are things you should discuss and ask yourself before making such a big move. Change is never easy, but if you have a solid plan in place and a vision of your business moving forward, it will greatly help ease the transition.
Full Time Investor Pros And Cons
The first thing you need to ask yourself is whether or not your income would increase if you invested full-time. This sounds obvious enough, but just because investing would be easier doesn’t mean it makes sense to quit your full time job. To contemplate such a change, you need to have enough business in place to substantiate investing full time. This not only means looking at your current pipeline, but having contacts and leads that can generate deals for the foreseeable future. It is only at the point that you feel you are losing business that a change should be made. If you are quitting just to have more free hours or a flexible schedule, you are not doing it for the right reasons.
You are giving up a lot to invest full-time. In addition to a steady income and health insurance, you are now fully responsible for your own income. Many investors welcome this pressure, but there are also many who cannot handle the new-found burden and wish they had a paycheck coming in. Before you commit to invest, you need to have a budget in place, reserves in the bank and a business plan in order. Investing full-time means treating it like you would any other business you would open. Completing a couple of successful transactions doesn’t necessarily mean you are ready to jump right in. If you aren’t ready to treat investing like a business, you will quickly regret your decision.
Investing full-time means changing the way you live your life. If you have a spouse and family, it will be an adjustment that needs to be discussed beforehand. The first few months may be lean until you get a few deals closed. Even if you have closings right away, it will be an adjustment in how you get paid. Instead of getting paid every week or two, you may see a larger amount every month or six weeks. This means you need to budget and spend accordingly. There will also be changes to how you prepare for tax season and what you need to do with your bank accounts. The bottom line is that you need to have your family on board with your new schedule and your new business. Business may be robust, but if it causes too much stress it may not be worth it, or it may take longer to adjust than you anticipated.
Even if you have invested for a while, committing full-time is an adjustment. This means that you need to have an idea how to maximize your day. Talk to as many seasoned investors and find out exactly what they do with their day. If they do a brunt of their work online or with some form of technology, it is possible that you may not have to quit your current job. The key to any good investor is maximizing their time wisely. If you quit your day job and sit around all day and wait for deals, you are not quitting for the right reason. You need to feel that you can do a mailing campaign or oversee more rehab projects with your time. Before you quit, have an idea of how you would spend your new-found time and how that equates to your income.
Finally, many investors think they have everything in place when they start, but find they are quickly overwhelmed on their own. Before you go at it full-time, make sure you have enough capital, contacts, resources and support before you start. Quitting your job and trying to figure it out as you go sounds like a good idea, but it could lead to disaster. It is better to wait a little longer before you know you have things lined up and can handle the business rather than quitting and waiting for it to come. You will need capital to support your full-time business. If you start out with a minimal budget, you can turn to credit cards and borrowing to support your business. This can lead you to chase your tail even if you are closing deals. Take the time and wait until you are fully ready before you get going.
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Part Time Real Estate Investor Tips
I want to make it abundantly clear: it is entirely possible to make a living as a part time real estate investor. However, you will need to be much more efficient with your time if you are going to work fewer hours. That said, there are some important part time real estate investor tips to help get you on the right path:
- Find A Partner: If you find yourself craving the benefits associated with becoming a real estate investor, but are otherwise limited in your capacity to invest the hours necessary to succeed on such a high level, try recruiting a partner.
- Automate And Outsource: Today’s greatest investors already know it, and it’s about time you did, too: If you don’t value your own time, nobody will. That said, dedicate your own personal strength to the things that matter the most, and leave the monotonous tasks to outsourcers. You’d be surprised how productive you can be if your day isn’t bogged down by the little things.
- Pick A Niche Investing in real estate is a complex endeavor, and it’s only made more complicated the more you choose to get into. If you are intent on investing part time, try stick to (and mastering) one particular niche. While it’s possible to be a jack of all trades, your limited time int he industry may be better spent focusing on one area.
- Find Your Why: Working as a part time real estate investor requires passion, drive and determination. If you find yourself looking for the aforementioned features, try determining your own why. Why is it you are investing int he first place? Few things will push you to succeed more than your “why.”
There are countless part time real estate investor tips that could prove useful to the average investor, but these select few have proven universal. There isn’t a part time investor that I am aware of that couldn’t benefit from implementing any or all of these ideas.
How To Transition From Part Time To Full Time Real Estate Investing
Learning how to transition from part time investing to full time isn’t exactly rocket science; in fact, it’s much easier. If you have already established a strong foundation to build off of, taking the leap from part time investor to full time entrepreneur will have more to do with the amount of time you have to allocate to the practice than the actual tasks at had. If for nothing else, part time investors are doing exactly what full time investors are doing; just less of it. If you were already doing things correctly, making the change will have more to do with a scheduling shift than a paradigm shift.
Nonetheless, there are significant differences that warrant your attention. If you want to overcome them and make the best of your situation, I recommend teaming up with a partner. While working with a savvy partner is a great move for part time investors, it’s also a great way for full time investors to kickstart their careers. Two heads are better than one, are they not? With a partner, you can narrow your focus and work on the tasks deleted to each individual. That way, the odds of becoming overwhelmed are significantly lessened. Trust me, that’s a huge advantage when trying to invest full time.
Again, I want those looking to transition from a part time investor to a full time investor to really consider narrowing their focus. IF you recently made the leap to full time, or are currently considering doing so, don’t get in over your head. Try focusing on one niche, like wholesaling, and learning everything you can about it. Dedicate yourself to a single niche and watch your expertise grow. In doing so you will gain confidence in the industry and in yourself. And once you are comfortable, try another niche. Case in point: take things slow. Take investing one day at a time and learn things at a pace that is comfortable for you.
Investing full-time can be the move that propels your business to the next level, but it is not to be taken lightly. Look at the pros, cons and real advantages of having more time to dedicate to your business. If you feel they are worth it, it is time to make the leap. However, if you have doubts, you should stick with your full-time job for as long as you can.
Are you done with part time real estate investing and ready to make the transition? Perhaps you already have and are wondering how to proceed? Whatever the case may be, feel free to lets us know how things are going for you in the comments below.
