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Time To Do Real Estate Investing Full-time?
| | Friday, December 05, 2003 @ 08:00 AM EST
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Contributed by: Jeff Lira
Jeff Lira Properties
Read more archived articles about Rehabbing
I guess an additional question may be do I have enough money coming in, or put aside, to do REI full-time? The answer to that question was what my wife and I focused on.
Some say that if you're loosing money working for someone else, it's time to go full-time. Some put a monthly REI income on their decision, while still others' decision is made for them by
the loss of a job. We've gone the monthly REI income route.
We began with the purchase of our first home with no money down (a "gift" of equity" got us in); while living in and working on the home for the next two years, we knew that we were going to get into REI and learn how to purchase property with "no money down." After purchasing Carlton Sheets' course, we were further inspired, and hit the ground running.
We decided that the best way for us to do REI full-time was to first create an income property base (I've spoke with some fulltime rehabbers who said that if they were to do it all over again, that's the route that they would have taken). So, we began to call, see and offer on duplexes, which led to triplexes and quads all of which we purchased with either the equity from other properties or from the seller holding a second, essentially "no money down;" then I didn't want to use our money anymore, so I found a partner.
What we've done with our partner is to use his credit and money to purchase our first REO; from the numbers we've run, we (my wife and I) should walk away with about 25k. Our partner will walk away with the same (now, many REIers may not agree to 50%, but my question to them is what's 50% of nothing? What's 50% of 50k?).
Ok, now we have a rehab. in progress, another rehab. on the horizon, a number of income properties, a line of credit, available credit on credit cards and about three k in the bank and our cars paid off! It seems like we're ready, right?. The only issue now is health insurance.
My wife cannot work, so I cannot get on her insurance that her employer may have provided us. I have a few health issues which just about pushes us out of possibly getting private health insurance and a decent cost. So, what now?
The answer to that full-time REI question may not be what you would expect, but it gets us closer to our goal of financial independence and doing REI full-time. What we've decided is that I'll reduce my work week to 32 hours, which is the minimal amount of hours that still allows for full insurance coverage and allows me to continue to do REI, but now more than part-time which is closer to full-time, at least from our current point of view.
But to answer the original question, we think the only way for us to finally go completely full-time is by purchasing, rehabbing and selling more REOs and preforeclosures to pay for the higher insurance costs. We may even consider buying multiple REOs at one time for a better price/unit and subcontracting out the work on them provided the numbers are there.
Our answer came in various parts, and I can say that our going into REI full-time is near. I can feel it, and I think our change will continue to evolve gradually and naturally rather than suddenly for which we're thankful.
Thanks,
OnTheWater
Word Cloud:
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