Real Estate Investing For Beginners with a Full Time Job

Today we are looking at real estate investing with a full time job and how you can do it. We are going to see how to create a business that runs itself, while you are working a full-time job.

It is possible!

I’ve done it, my students have done it, and you can too.

Benefits of Real Estate Investing With A Full Time Job

Having a full-time job is actually fantastic, when you are starting a real estate business.

Even though the word J.O.B. means Just Over Broke, your boss is only paying you enough to keep you working, there are some great things about having a job.

I utilized them as much as I could while I was building my business.

Having a job can help you build your business even faster. Imagine you are older and living on Social Security. It is harder to invest in real estate, because you have limited funds coming in.

Here are some good things about having a full-time job:

• Full-Time Job Security
  Even though your employer could fire you at any time, you have the ability to rely on your job to bring in money.
  
  On top of that, you can save the money coming in to buy more properties. If you are on a fixed income, it is harder to get more money to buy more properties.
  
  
• Employer-Sponsored Benefits
  While you are employed, you can take advantage of the benefits offered by your employer, like health insurance.
  
  
• Fuels the Ability to Buy More Properties Faster
  If you get a raise, don’t spend that money! Set that money aside to save for your next property.
  
  
• Access to Loans
  I often talk about the BRRRR Strategy, which is simply recycling your money to buy more properties. It is so much easier to get a loan when you have a job.
  
  If you don’t have a job, the bank will not believe that you will be able to pay the loan back. Lenders need to see a W-2 and two years of employment to give you a loan.
  

I actually postponed quitting my job for an extra six months, because I was working on financing four properties. I knew that if I quit my job in the middle of that financing, the bank would not approve my loan.

I quit my job after the financing was complete.

Now that I do not have a job, banks look at my tax returns. They just want to verify that I have income coming in every month.

Real Estate Investing Is Your Business

Change your mindset. You do not have a full-time job and a side real estate business.

When someone asks you what you do for a living, tell them you are a real estate investor and your side job is working for your full-time employer. Identify as a real estate investor with a side job.

You are what you tell other people. As soon as I made that shift in my mindset, so many positive things happened. Things will change!

Necessity is the mother of invention

-Plato

I love this saying! If you are telling yourself that you want to quit your job, it becomes a necessity and you are going to find a way to make it happen.

Where there’s a will, there’s a way

– Proverb

You are going to find a way over that hurdle and through that roadblock. In the future you might not have this job, so start working toward your goal to quit.

You will make a way. As you start thinking about how to get around these roadblocks, you will see the problems dissolve around you.

Real estate investors are entrepreneurs — we see a problem as an opportunity.

When you are just starting out, it is hard to see the light at the end of the tunnel.

I’ve been there!

You may see a very dim light at the end of the tunnel, when you are getting $200 or $300 from one or two properties. That light gets bigger and bigger as you buy more properties.

Your mindset needs to shift from where you have a job and a side business, to where you are a real estate investor and you buy that first property.

After you buy that first property, you start running down that tunnel.

The Mindset of a Real Estate Investor

• Dedication:
  Develop a dedication to getting this job done, getting this business built, buying that next property. You will need to figure out any problems that come your way.
  
  
• Persistence:
  Keep going and going until you make it work. Entrepreneurs are people who get things done where most people won’t.
  
  
• Education:
  Get as much education as you can to help you work through those roadblocks when they come up.
  
  Seek out people to gain knowledge. Sign up for coaching with someone who has already been there.
  

Schedule in the Time For Investing

• Dedicate Time to Build Your Business:
  This can be difficult when you are working 40 or 50 hours per week, but find the time to do it.
  
  When I started my business, I was working 14 hours a day. On my lunch break, I would do work for my real estate business.
  
  Every moment I wasn’t working my job or focusing on my family, I was working on my business. One hour a week is not enough. I recommend at least five to six hours a week.
  
  Push yourself so you can quit your job. If this is important to you, make the time!
  
  
• Time and Organizational Efficiency:
  Make it a routine. As you are driving to work, listen to a podcast, get education, call mortgage brokers and property managers.
  
  On your lunch break, mowing the lawn, or driving to the gym, do more work to build your business.
  
  I stopped listening to the radio for five years to listen to podcasts and learn.
  
  Capture that time to build your business.
  
  
• Systems and Organization:
  It is so much easier to invest in real estate in today’s world, because there are so many tools available to you, including Evernote and Dropbox.
  
  Look for tools you can use to make your business more efficient.
  
  
• Pay Others to Do the Work For You:
  I don’t manage my properties, my property managers do.
  
  You can have contractors, realtors, wholesalers, mortgage brokers, etc.

Build A Team of Others Working For You

Have other people working for you, day in and day out, while you are sleeping, working, on vacation, etc. Some of these other people include:

• Property Managers
• Realtors
• Mortgage Brokers
• Bankers
• Wholesalers
• Contractors
• Handymen
• etc.

Your job is to build a team of people who are working for you. The biggest thing you can do for your business is hire others to do all the work for you.

Listen to Episode 8, or go to the podcast show notes, where I talk about how to build and automate a business.

Money and Finances

One of the biggest question I get from my podcast listeners and students is: How do you get the finances to buy properties? Here are some ways to do that:

• Increase Income:
  • Ask for a raise. Don’t tell your boss why you need the raise, tell them the reasons why they need to give you a raise – show them how you benefit their company.
  • Get a side job. If all of my properties went away and I couldn’t make money, I would  drive for Uber or Lyft.
    
    
• Cut Expenses:
  • This won’t be forever! I cut so many expenses when I first started out, and now I added them back in.
  • Cut out coffee and going out to eat, sell your car to get out of your car payment. I still drive a 2007 Honda Odyssey.
    
    
• Increase Savings Amount:
  • It is so easy to buy properties when you have cash, and often you get a cash discount.
  • Force yourself to save $100 a month. A few months later, increase that to $125 a month. The more you save, the more properties you will be able to buy.
    
    
• Continue to Save Until You Quit Your Job:
  • Don’t overspend! When I was starting my business, we had an opportunity to go to Disneyland with friends, and we turned them down. I needed that money to buy a property.
    
    
• Find Other Investors Who Want to Lend You Money:
  • This could include family members, friends, and acquaintances.
  • When you start telling people you are a real estate investor, you will find people who will want to invest with you.
    
    
• Talk with Mortgage Brokers:
  • Keep talking to mortgage brokers to figure out what your credit score needs to be, how much money you need to make, and what they need from you in order to get a loan to buy a property.
    
    

Networking

• Tell everyone you are a real estate investor
• Find other investing groups. To find a local group, search for REIA and the city you live in.

Step-by-Step Process

This is the actual process I took, to buy my first property:

• Find an Area To Invest:
  This doesn’t necessarily mean the area you live. My first property was in another state.
  
  
• Build a Team to Work For You:
  Find property managers, realtors, wholesalers, etc. Have your team ready to go, before you buy your first property.
  
  
• Find a Property:
  Use online tools, like Craigslist and Zillow, and then run your numbers.
  
  
• Have Your Property Manager Fix up the Property:
  Get the property ready and listed.
  
  
• Find a Good Tenant:
  Never, never, never place a tenant without running a background check. If you use Cozy to list and manage your property, the tenant will pay for the background check.
  
  
• Repeat the Process Over and Over Again:
  Real estate is a rinse and repeat type of business. It takes me one to three hours to find and buy a property in an area I already invest in.
  
  

Here is the step by step process I would use to build my business:

1. Increase my income
   Drive for Uber, work part time at Walmart, or some other way to increase my ability to earn money
   
   
2. Cut expenses
   This allows you to free up money to invest
   
   
3. Save as much money as possible for investing
   
   
4. Talk to friends and family to see if anyone would like to invest with me.
   
   
5. Save enough for an FHA loan. This is a 3.5% down payment
   
   
6. Buy a duplex. Live in one and rent out another
   
   
7. Refinance the property and get a normal loan
   
   
8. Keep saving
   
   
9. Buy another duplex with an FHA loan and rent out both units of the 1st and the other property in the 2nd
   
   
10. Repeat the process

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