The first thing you need to ask is ask yourself why you want to be quitting. I was asked this question by a nurse. The world is in desperate need of good nurses right now and they can make a good money. Have you considered quitting your job and becoming a traveling nurse? You could essentially make your own hours and negotiate your wages. You’d be like an independent contractor and you be your own boss. This goes for IT professionals, plumbers, educators, physicians, custodial workers, and almost any other career. An intelligent person can almost write their own contract in this market. You went to school for this! Why quit during this best possible time?
I bet a lot of the reason why you want to quit is the fact that you have bosses telling you what to do all the time. You’ll never get rid of that completely; everyone has a boss. If you keep your job you still have some sort of income. That makes it easier to get a loan from the bank and also easier to save a down payment. If you haven’t saved enough money for a down payment on a property and now is definitely not the time to quit your job.
If you still insist on going out on your own and starting in real estate, here are the steps I recommend.
- Save a minimum of 10% of each paycheck and put it in an account labeled investments. Do not touch this money for anything else other than purchasing real estate. This is over and above anything you currently pretend you’re investing in your 401k.
- Determine your real estate strategy. There could be a whole post just about this so I won’t take much time now but you better figure out what you’re going to invest in right away. Once you have that you’ll know how much about how much you need to save for that down payment.
- Once you found that deal you want to purchase, don’t quit your job until you’ve secured your loan. Ideally you’ll have a few of these properties in order to equal the income that you were receiving from your job. Don’t quit your job before you have an income that you can survive on. There will be a tough 5 years ahead of you.
- Once you’ve built up enough equity in your investment you’ll need to consider taking out lines of credit or refinancing in order to purchase the next one. You’ll have to do this because you won’t have the income most people would be using to save up the down payment on the next property.
- Now might be a good time to look for a partner who has a steady source of income and can be the “money man ” for your projects going forward. Putting in this cash involves a big risk and is worth a lot. Anticipate giving up a large portion of the deal for this equity.
- Continue doing deals and you’ll build up enough properties that banks will look at your balance sheet rather than your income when deciding whether to offer you another mortgage.
It’s a hard road that you have ahead of you but I commend you for your motivation. Just make sure that you’ve strongly considered all the possibilities before jumping in head-on in the game of real estate.