Should You Do Real Estate Full-Time?

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.

Understanding Investments in the Real Estate Business

Various skyscraper buildings are built every month in major cities and well developed urban areas. The number of subdivisions from low cost housing to luxury villas is escalating. Have you ever wondered why there are non-stop constructions? The answer is quite simple. There is a demand to meet and there is a whooping profit to reap. This is the primary reason why people are looking into making an investment in real estate business, whether struggling businessmen or seasoned entrepreneurs.Like any other venture, it requires a strong business sense and practical information to be successful in this field. These skills are not learned overnight. If you are a neophyte and are just exploring the potential of earning more with minimal risk in the arena of real estate, this valuable info will be helpful as your business endeavor.Identify the needs. Is the building located in a highly commercialize district? Is the newly built subdivision accessible? Real estate properties are categorized in two, residential and commercial. Residential ones include condominiums, flats and villas while commercial ones are used more for business purposes. The key difference between them is the location and purpose which will directly influence the flow of your investment in the real estate business.Oftentimes, commercial properties are more marketable than residential properties. Entrepreneurs generally move fast in terms of the decision making process from searching an ideal location to closing the deal. A businessman, who wants to open a restaurant, must already have an idea where he wants to situate his outlet. He can definitely decide in a short period of time about the location he wants to rent or buy.This is unlike a couple, who is eying a new house and will often take a lot of time to decide on a purchase. They will visit many properties and consider various factors such as the property’s accessibility, mortgage, recreational facilities and the area it is a part of.Therefore, the return of your investment is more likely faster with commercial properties. If you want to have your investment back at a shorter period of time, then you need to identify your current and future needs.Proper financial planning is advisable. As you know, it requires a substantial amount of capital to invest in real estate business. You are not buying household furniture but it is piece of land or house which really costs a fortune. If you have limited funds, then choose wisely the properties you will buy. Time is your real indicator for your return of investment. How long will it take to resell that piece of land? How much will it cost you for total refurbishments before the villa is put on sale?The longer the waiting period, the more money you are losing. As you get your own investment in real estate business, you will get the opportunity to learn and understand the ins and outs of the business. This is the information that you will acquire in the process of learning which will hone your business sense and skills. Again, it is not an overnight success. It takes failures and wrong decisions before you will eventually reap an enormous profit from your investments.