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The ONE thing you will need to start investing in real estate with a full time job.

The ONE thing you will need to start investing in real estate with a full time job.

“Find joy in everything you choose to do. Every job, relationship, home… it’s your responsibility to love it, or change it.”

-Chuck Palahniuk (Author of the book, turned movie, “Fight Club”)

 

I get it! You’re on the grind, working to bring home that bacon, sacrificing 40, 60, 80, 100+ hours a week and it lingers in the back of your mind how you can get into your real estate endeavors if you’re strapped for time. You’ve read some books, attended some events, and now you’re mentally prepared to pursue your financial dreams but you don’t know where to start nor can you scrape up the time to start building your real estate business.

 

I made this entrepreneurial journey of mine a bit more difficult by jumping straight into building a business and leaving the consistent pay behind. It’s much easier to start a business when you have a job.

 

Here’s one thing I learned in the beginning of my career: Profits generated from the business are to be reinvested into the business to help it grow.

 

When I first started, the only profit I was making was from a few rental sales and some bartending gigs I would work once every quarter. (Whew, glad I’m not there anymore).

 

When I say that it’s easier to build a business when you have a job, I’m referring to a job in which you’re not living paycheck to paycheck. A job where you have some spending money. You only need ONE thing in order to maximize your time and effort. ONE thing that will help you start your business while working a full time job. It’s also the ONE thing that runs all other businesses that drive our world.

 

That ONE thing:      A system.

 

A system is a repeated way of doing something in order to get an expected result.

 

 

A great book, the 4 Hour Workweek by Tim Ferris is highly criticized for the unlikelihood of working just 4 hours a week.

 

To be honest, I don’t believe it’s about trying to work 4 hours a week. It’s more about the importance of systems to help you leverage your time. He also talks about hiring virtual assistants and freelancers which has become extremely powerful over the years with websites like fiverr.com and upwork.com.

 

Think about this, if you’re investing in real estate, are you the lender? The contractor? The attorney? The title company? The seller? No. You’re the real estate investor. That’s the only hat you’re wearing. The only main job of the real estate investor is to decide what to buy and what to sell. Everything else is either not your job or can be handled by somebody else.  Sure a real estate investor will network with other investors, analyze their markets, have marketing material, and so on and so forth, but none of that will matter if the trigger to buy or sell is never pulled. Just like you can’t play “House,” you can’t play “Business.”

 

Just like a CEO, their main priority is focused on growth while overseeing the operations of a company. While they’ll understand how the customer service, shipping, sales, and research department works, they obviously aren’t doing the day in and day out jobs of those departments. They just focus on their job which is growing the company and making revenue-producing decisions.

 

See;   the guy in the picture below understands me….. CEO.

 

 

Now, obviously you can be a Lender who also invests in real estate, or even a real estate investor who’s going to do the repairs themselves as the contractor, but the focus of this article is for those who find themselves busy with their main jobs and are looking for leverage. Those who only have time to be the CEO!

 

There are four core departments of your real estate investing business. Develop a system for each of them and you’ll find the time to run your business efficiently and your boss will be completely oblivious to the fact that you’re making money in real estate.

 

The core four departments of your real estate business are Acquisitions, Rehab, Sales, and Financing.

 

The awesome part about these departments is that you won’t need a 2,500 square feet office with designated areas for these four departments. You don’t need corner offices or cubicles nor will you need to start posting on Indeed.com looking for employees. All these departments can be ran from your phone. You can thank the aggressive laziness of us millennial’s for making everything so easily accessible on a smartphone.

 

 

Acquisitions

 

“The key to making acquisitions is being ready because you really never know when the right big one is going to come along.”
-James McNerney

 

This is the most important department and the one that deserves the most attention. After all, if you have no deals, you have no business. No business, and the other three departments aren’t even necessary.

 

Simply put, you have to get deals. Whether you go looking for them, or have people look for you, you will have to find deals.

 

Your END GOAL is for your system to be so effective, that every morning when you walk into your full time job’s office, there is a list of deals waiting for you to analyze in your inbox. I say your END GOAL because some of you will read this article, try to find one deal, fail, and then give up.

 

(No, seriously, if us millennials were in charge of growing this country’s farmlands we would fail!)

 

 

We would plant the seed in the spring and then come back in the summer looking for our harvest, blindly realizing we get our harvest in the fall. It will take time to develop this system, that’s all, just time – and the way I see it, time is going to pass you whether you do anything or not.

 

I’ll even help you take one step towards that system. Contact your agent and tell them to set you up on a search from the MLS (Multiple Listing Service), the database where agents post properties for sale. You’ll be able to find a couple of deals on the MLS and the auto search features sends you an auto-email around 4am every morning with all the new properties that came onto the market.

 

Boom! I just made is possible for you to literally get to your desk in the morning and have leads for you to analyze right in your inbox. Once you get good, it’ll only take you a few minutes to analyze if a deal is good or not.

 

There are a plethora of ways to find deals but I highly recommend direct mail if you’re working a full time job. It’s the easiest way to be hands off while getting your phone to ring with individuals who would like to talk to you about selling their home. This strategy is also the most expensive when it comes to marketing for deals, but again, if you have a full time job with consistent money coming in every other week, then you’ll be able to use some spending money to get your direct mail campaign underway with the click of a button.

 

You can start attracting leads with the click of a button. How much time does that take ?

 

Financing

 

“Jay-Z is as politically correct as some of the politicians. He’s safe. There’s points when you’re acquiring financing, you make adjustments. He’s made those adjustments. It’s his choice.”
-50 Cent

 

This department covers how you’ll be funding your purchase. In the big picture of each transaction, the financing portion won’t take nearly as much time as it will actually finding the deal. Aside from any major unexpected financing issues that occur during the transaction, the most amount of time will be spent on finding a lender. If you have your own cash, then you’ll be able to operate at a much quicker pace throughout each transaction.

 

You’ll have a couple of financing options to choose from, choose one that will apply to your situation. At the end of the day, the goal is either profit from a flip or rental income. If there is a good return to be made on the invested capital, it’s probably a good deal.

 

In the beginning, you may have to shop your deal around to various lenders due to your rookie experience, but eventually you’ll come to learn who you will do multiple deals with in the future. At that point, you may not have to shop around for financing, you can go straight to your preferred partner and keep the ball rolling with little effort and very little time spent.

 

The better the deal the easier the financing process so I definitely suggest that you not waste your time with trying to bring bad deals to the get financed, you’ll spend too much time on a deal that won’t get funded.

 

All in all, a very limited amount of time is needed on the financing portion of the transaction, an amount of time that is definitely manageable with a full time job. Just as long as you have the proper system in place.

 

 

Rehab

 

“If you look at the statistics, people spend most of their time in the kitchen. Aside from the backyard, it’s one of my favorite places to renovate.”
-Vanilla Ice

Although I’m preaching how using systems can help you run your business with not much time needed, this is probably the one field that you’ll have to keep an eye on more often than not. The renovation phase of any investment project can make or break your deal.

 

This is the one area of your business where unless you plan on picking up a hammer and the doing work yourself, you’re out of control to a certain extent. Most investors will check in on their contractors more often than not to ensure work is getting done. It’s a common scenario to be handling your normal day to day priorities with your  job and family; believing that your contractors are getting great work done at your property, not realizing the contractor hasn’t been there all day – they were working at another job site.

 

You’ll have to develop a system to stay on top of your contractors to ensure efficient work. The system should be so strong that your contractors are basically trained to work and report to you; honoring your system. While there will always be unexpected delays, pop up issues, and “what the hell is going on!?” moments, you can’t control that. You can only control what system you will create to vet (most importantly), manage, and train your contractors to respond in a manner that allows you to not be so “micro-manage’y.”

 

 

Sales

 

“You have to develop your whole game to completion.”

-Isaiah Thomas

 

This entails your exit strategy. If you are flipping, this will encompass how you plan to sell the home in order for you to claim your profit. If you’re planning on turning the property into a rental, then you’ll be looking to get the property rented and then refinanced. Either way, you’ll have a system to complete the transaction based on your desired outcome.

 

With flipping, will you be looking to market and sell the home yourself, or will you be using an agent? Which attorney will you use? Which Title company? The better  the answers to these questions, the better your system will be. The more you continue to work with other real estate professionals the more they will get a sense for how you work.

 

No lie, I just told a new mortgage officer I’m working with “I’ll be here if you need me, keep me in the loop, but only work to get my attention with dire emergencies.”

 

That mortgage officer is a professional, he’s handled more than enough transactions, and he knows what to do if there are hiccups during the transaction. The truth is, most of those hiccups, speed bumps, and “seemingly” detrimental issues always get resolved. In the beginning of my career, I found myself fretting and worrying every time I would get a call about an issue. That would take my mind away from more important matters like growing the business.

 

Don’t get me wrong, I’ll still want to be updated throughout the transaction and I’m always appreciative if I were to receive a phone call with an update, I’m just saying when you really start to focus on growth, you focus your time and energy on revenue generating activities and it’s really easy to get distracted with menial things in this business.

 

Usually for those that are flipping, they will hand this job off to an experienced real estate agent – one who will take the dirty work off the investor’s hands of getting the home sold. This will give the investor peace of mind for them to focus on other things while the agent works in the background to get the property sold. If the investor wanted to, they can just sit back, electronically sign documents right on the computer or smartphone, and then show up at the closing table and receive check – or even better, have their agent drop it off to them! Agents are in the service business and if they knew there was an opportunity to build a relationship with an investor who will continue to supply the agent with properties to sell, of course the agent will have no problem delivering a check to the investor.

 

Hell, I’ll even serve their check on a silver platter with white gloves, a black tuxedo with the two tails in the back, and I’ll even lean over slightly as I present the check and say “Your check sir…”

 

Maybe not literally, but don’t second guess me, I go above and beyond!

 

For those that are looking to turn their project into a rental property, a property manager or agent can help with getting the property rented out for you. They would handle showing the apartment to prospective tenants, screening prospective tenants, and handling the lease agreements. At that point, it’s all about refinancing with a lender. Again, the refinance process will not be requiring for you to step away from your 9-5 three days a week. Most of the paperwork can be handled electronically and any other pressing issues can be handled on your lunch break or in the same amount of time that you spend on social media and group chats.

 

 

All that to say….

 

Here’s a quick scenario of a hypothetical transaction for you to see how much time, energy and effort you’ll need to do your job as a real estate investor (the ceo), focusing on pulling the trigger to buy or sell.

 

You can set up your direct mail campaign to get your phone ringing with leads.

 

Don’t want to have your phone ringing at work? Hire a virtual assistant to take your calls. There are various call center companies out there who will answer the call from the seller, read through a script, get the information that you need, and then write an email to you with all the details. How easy is that?

 

Of course you can just take the calls yourself and ask the seller the same questions.

 

You now have a list of potential sellers that are interested in selling and based on their responses to the questions you had the call center ask, you can sort through and see which ones are really motivated to sell. For example, if the answer to the question “Why are you looking to sell you home?” is  “We want to get an idea of what our house is worth” vs. “We live in another state and can no longer afford a property that we inherited” which response do you think will be more motivated to sell quickly? The latter of course.

 

Set appointments with all the sellers who are motivated. You will set an appointment to see the home, meet with the seller(s), figure out what repairs are needed to be made, and figure out your offering price.

 

You can set time outside of work to visit these prospective sellers either after you get off work, or on the weekends. If you really want to be hands off, you can send an agent or contractor that you trust. They will report the details back to you and you can run your own analysis from there. I will make a note, that analyzing a deal without looking at the home is a skill that will come with experience. It isn’t necessarily something that can be done on the first deal.

 

I feel comfortable just looking at the numbers, area, and the seller’s reason for selling to know if I’m looking at a good deal or not. That all comes from experience. It’s all about the numbers which is why it’s important not to work with just any agent or contractor, but one that deals with investors – they know what to look for and can be your eyes out in the field.

 

You now have your deal and now need to find financing for it. If you have cash, it’s time to get the transaction started. If you’re going through a hard money lender or private lender, you may need to make a couple of phone calls, but if your deal is a good one, finding the money to fund your deal will be the least of your worries honestly. Either way, all you need is a phone and a computer to handle your financing. If your lender wanted to stop by the property during normal business hours while you’re at work for an appraisal, you can easily hire a runner for cheap to go and open the door for them, or just have your agent help you. This can all done from your phone.

 

You got your financing in place, you close on the home, and now it’s time for the renovation process. As I stated before, with this area of the transaction, you may want to do a little more due diligence on finding and vetting your potential contractor. Obviously once you get multiple deals under your belt, you’ll know which contractors you can count on and which to avoid. At that point, your contractor will understand how you work and if they are smart, they’ll be sure to provide the best service in order to keep earning your business in the future. Speak with agents, other investors, and even people you know who have used a contractor in the past to see who will be able to be the best contractor for your job. Word of mouth is and will always be the best form of marketing.

 

You selected your contractor, after being properly vetted, and now they begin their work. You’ll need to stay on top of your contractor to make sure they are staying true to their schedule. Again, do not expect your contractor to be perfect or for issues not to arise mid-renovation. I don’t want to say these things are inevitable but you’ll be naïve to believe nothing will go sideways. Have an idea of what the contractor is expecting to get done on a weekly basis and you’ll be able to stop by the property to ensure the work is getting done, whether that’s after you get off work, or on the weekends. You can even send a runner, or an agent to check on the property for you. If you hire a project manager, that will be even better as they have the skills specifically set for that type of work.

 

As you grind and churn through the renovation process it’s now time to execute your exit strategy, whether selling the property or turning it into a rental. These two processes can both be hands off with the help of an agent alone. All you need to do is receive the updates and any paperwork that needs to be signed can be signed electronically on your phone the same way you like a Facebook status or Instagram post; a simple finger tap.

 

As you close your transaction, it’s time to rinse and repeat.

 

You just handled a real estate transaction while working a full time job, mainly from your phone.

 

Is it that easy? Most likely not, but could you imagine if the title of this article was “How to struggle investing in real estate with a full time job?” Would you read that?… Doubt it.

 

Then again, no one wants to hear the difficulties and struggles of investing in real estate which is why so many people give up easy or just never get over the analysis paralysis.

 

The point of this article is to show you that you don’t need as many hours as you think you may need to invest in real estate. The point of this article is to also show you how having a full time job can be your best advantage when it comes to investing in real estate. A quick tip; Banks and lenders love W2 employees. I had to learn the hard way when I first quit my job as I simultaneously gave up some of my credit worthiness by switching to a W9 from a W2.

 

The point of this article is that I know there are individuals who are working full time jobs of 70+ hours a week and still find the time to invest in real estate on a large scale. If I can do it this early in my real estate career, you can do it with a full time job in probably half the time.

 

I say all the time, my only regret when I decided to quit my job and go into real estate was that I didn’t purchase a property first, then quit. Then again, I can’t really consider it a regret because I wouldn’t have learned everything I know now without being able to beat on my craft at a full time level.

 

So what now? What’s the next steps? I’ll tell you.

 

Step 1.    DECIDE that you’re going to do this – and I mean DECIDE. Not think you want to, not have the desire to, not even “I will” ……. DECIDE. Meaning, the only way you don’t get to invest in real estate is if you pass away, God forbid. That’s the mentality you have to have. Think about all the other things you DECIDED on. You got exactly that. When you make a decision, you cut off any other options.

 

Step 2.  Pick an area. If you can’t make up your mind, choose your own backyard. If you feel like your backyard is too expensive, go to a less expensive market. Don’t over analyze. If you want to make it easier, you can ask other investors for their thoughts or you can ask your agent to pull a list of the all-cash sales in any city. Based on where cash investors are buying, you can go there too.

 

Step 3.   DECIDE how you want to start finding deals and do that and ONLY that. Just do it. It doesn’t matter how you find your deals, just pick a strategy and run with it on a 10x level. Whether that’s prowling the MLS, sending a bunch of letters to homeowners, or networking with other investors, just do it.

 

That’s it. Just those three steps. I promise you everything else will fall into place.

 

You don’t need to know who your contractor is…..right away. You won’t need to know who your lender is….right away. You don’t need to know who your agent will be….right away.

 

(This is the part where I shamelessly plug myself as the agent with the solutions to your problems).

 

When it comes down to your decision to invest in real estate:

 

You need a deal.

 

A deal brings you money.

 

A deal makes everything else now necessary.

 

A deal is what makes you a real estate investor.

 

Go out and find the deal. That’s all that matters.

 

Let’s work hard and grind together!

 

 

 

Need help? Ask your questions in the comments below!

 

 

 

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