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.
Like any skill or craft I’ve always found it helpful to remind myself and practice the basics. Juggling 1000 things at once I’ve found myself cutting corners, especially in my sales and marketing process… months go by and I wonder why business isn’t as good as it used to be last year???”Oh, well it’s because of the economy…” <-- it's only an excuse!Corner cutting starts with simply not "smiling" when on the phone or in person, then it moves into skipping the simple sales or presentation steps when previewing properties or during listing presentations. Cutting corners is cutting your commissions.Luckily, you remind yourself, like I do, from time to time and practice the basics. For me, it starts with the simple "toastmaster" pitch process. Tell them what you're going to tell them Tell them Tell them what you've already told them It's a simple foundation template to any type of sales, presentation, or negotiation that can be adapted to any type of situation. Where I find it super helpful is when I take buyers out to preview properties. I tell them how many homes well see today, where they are located, how much time it will take, and what my professional opinion is out of the bunch. I stick to my agenda and do as I said, adapting along the way if necessary. I wrap up over coffee, tea, or dinner; reviewing how many homes we saw, what homes they liked, and close with my professional opinion. I find this process highly useful and valuable to my clients. It helps calm the nerves, gives them something to look forward to, and establishes confidence in me knowing I'm on top of the ball. Moreover, it's highly impressive to buyers and allows me "not" to sign agent buyer agreements (which, I've found to be very bad for building quality referral generating relationships).From time to time I like to remind myself and practice the basics. It can be as simple as a sale process, going back to the door knocking, or taking the time to create real estate flyers for your properties.Regardless of what you do, it's good practice to revisit the basics. They'll help to remind you how fun this business was in the first place. It the easiest and cheapest way to jump start my business.What do you do to "jump start" your business? I'd love to hear about it!