Every day, hundreds – if not thousands – of people decide to make the jump from a nine to five job to being their own bosses. Whether it is starting a personal blog or learning how to invest in real estate, there is always transitional period. Going from the same corporate job you have been working for years to being self-employed can be a very exciting time, but you need to be prepared. We do not recommended just up and quitting your current job out of the blue to dive right into your new business. Without taking the necessary steps, any excitement you have will be very short lived. If you are thinking about making a change, here are some tips and advice to help ease your transition into the field of real estate investing:
1. Devise A Business Plan: It is important to remember that the real estate investing business is just that – a business. Like any other business, you need to have a plan of attack. Before you leave your nine to five job, you should have a good idea of how and where you plan on investing. You should have multiple financing options lined up and have spoken with a handful of real estate agents. You should also have an understanding of what expenses will be involved in running a business and how you plan to find deals. Without new incoming leads, all the planning in the world won’t do you much good. Your business plan does not need to be perfect – you aren’t making a presentation for your shareholders – you just need to have an overall understanding of how you plan to run your business. Whether you write this on a yellow notepad or create a PowerPoint presentation is up to you. However, before you make the leap, you need to iron out your business plan.
2. Reserve Funds: Once you commit to the real estate world, you will not longer be receiving those reassuring weekly paychecks. Even if you find a deal your first week, it could be several months before you realize a profit. This underscores the importance of having ample reserve funds. Not only do you need these funds to run your household, but their absence could also impact your real estate decisions. If your sole focus it to make money as soon as possible, it could start to cloud your judgement. You might end up making an offer on a deal that you would normally never entertain just to make that extra cash. Additionally, you will need those reserve funds to run your business. While you might not need a dedicated office space, there are several startup expenses which need to be paid. Everything from a new computer to a new a phone are expenses that will quickly add up. We advise that you have anywhere from two to three months minimum in reserves before you get started. If you have to wait a bit longer until this is in place, you will benefit in the future.
3. Develop A Schedule: Perhaps the biggest adjustment from a traditional job to being self-employed is that there is no set schedule to follow. While this is one of the main reasons for making the change, not everyone is automatically going to be an organization pro. One of the first things you should do is take the time to physically write down a schedule for your day. You should treat self-employment like you would any traditional job. Get yourself in the habit of working at the same times every day. Having the flexibility to come and go when you please is great but it is easy to abuse that privilege. The quicker you can establish a routine while getting work done on your own time, the easier the transition will be.
4. Find A Work Space: One of the biggest changes to the business world in the last decade is where the business is actually carried out. In the past, if you wanted to prove your mettle, you needed to have a dedicated office space. However, with all of the changes in technology, you can essentially work anywhere you please. Say goodbye to the days where it is necessary to have an office address on your business card. All you need to get work done is a good laptop and a sturdy table. If you work from home, it is crucial to stay organized and not mix business with personal tasks. If you work from your local coffee shop or library, you will need to fight through distractions. Regardless of where you choose, you ultimately need to find a space you where you are comfortable.
There are a few reasons why networking is a critical part of your transition. The obvious reason is that networking will jumpstart your business and give you a chance to close deals quickly. The second reason may be more important. Networking gives you an opportunity to get out in your market and talk with other professionals. It can be a big adjustment going from working in an office where there could be dozens of people around you to sitting alone in your kitchen looking for deals. Networking allows you to hear other people’s stories and bounce ideas off of them. You never know who you are going to talk to at your next meeting or what great idea you are going to hear.
The first year – especially the first three months- will be the hardest, but once you get through the initial adjustment period, you will figure out your routine. Leaving a nine to five job isn’t easy, but with the right preparation it can change your life for the better.