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So you want to become a full-time real estate entrepreneur, eh? You imagine yourself doing nothing but wholesaling or flipping houses or living off the passive income of a rental or apartment building portfolio. You’re living the dream.
But you have a problem.
You have a job.
Don’t despair! In this article I’ll give you a blueprint for successfully making the transition from your 9-to-5 job to full-time real estate entrepreneur.
There are two schools of thought on this, which I will describe in some detail and then make my recommendation.
School of Thought # 1: Burn the Boats
In 1519 Hernán Cortés landed on the shores of Mexico with only 600 men and 11 ships. Conquering an entire empire with only 600 men can only be undertaken by a leader with a death wish, for this was certain suicide. His men, despite being tempted by promises of vast riches and fame, were paralyzed with fear.
Here’s what Cortés did: after his men landed on shore, he ordered his men to burn the boats. The men now had two options: to die or to fight. And fight they did: Cortés and his men became the first to successfully conquer Mexico in 600 years.
Applying this story to entrepreneurship, this school of thought postulates that we should give ourselves no Plan B to fall back on if things get bad. This gives us no other choice but to fight and to succeed. There is no other option.
This is the high risk/reward option, and it’s often the quickest way to find success. The downside is that there is no Plan B.
School of Thought # 2: Build Your Business on the Side
The second school of thought is a bit less drastic. It says that we should build our businesses on the side until the income allows us to quit our day jobs.
The key with this option is discipline. Your day job can be a HUGE distraction if you choose this route. It’s important to NOT have a job that consumes all of your waking hours and energy. An ideal job is one that is limited to 9 to 5 with little or no work spilling into the off-hours, allowing you the ability to pursue your business venture.
Because you have a full-time job, this option will take longer to deliver results.
The main advantage is that you have something covering your monthly expenses until your new business can replace that income.
I REALLY like option # 1.
There is nothing like going all in and focusing all of your time and energy on making your new venture successful. Not readily having a job to fall back on provides added incentive to not make failure an option.
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But you have to be realistic: you need to be able to cover your monthly living expenses. Follow these two steps to make it happen – one way or another.
Step # 1: Reduce your Living Expenses
If you’ve ever played the Cashflow 101 game then you know that if you’re living on a janitor’s salary, it’s easier to get out of the rat race than if you’re a high-paid attorney.
The key to setting yourself up for success is to reduce your living expenses as much as you can BEFORE jumping in full-time to pursue your venture.
I know of people who have downsized their house or even moved in with their parents for a while. Do whatever is necessary.
Step # 2: Create a Long-Enough Runway
You’re going to need a source of cash to get you through the next months until your venture starts producing the income you require.
My advice is that you should have more cash than you think you might need. Inevitably, getting a business off the ground will take longer than you think. Be conservative in your time projections.
Don’t run out of money.
I’ve seen people implement a successful transition from 9-to-5 by using either school of thought. But ALL of them implemented Steps 1 and 2: you absolutely need a way to cover your living expenses.
If you don’t have enough savings, then you will need another source of income (like a job). If you do, that’s fine; just do your best to minimize the hours and energy this job will require of you.
If you have a good business plan that you know will work, then you must commit to it wholeheartedly. Either burn the boats or build your business on the side. Be disciplined and focused, and make it your top priority. And finally, make sure to figure out a way to cover your living expenses to give your business enough time to succeed.
If you follow these steps then you too can achieve your goal of working full-time for yourself.
If you successfully crossed the chasm to full-time entrepreneur, share how you did it! If you want to, share with us what you’ve done, your successes and challenges!