Do You Want to Start a Part-Time or Weekend Business? Real Estate Investing Could Be the Answer
Now is the time to start investing, we are seeing articles and financial advisors blast this message to all who are ready to listen. The real estate market, particularly the rental market is booming. More and more people are choosing to rent, and getting in on the action of becoming a rental property owner is definitely the way to go. In my personal opinion, it is the safest investment there is, people will always need places to live, and as long as you do your research, and choose a property that will weather all trends, you have a steady source of income for years to come. We love the folks over at Think Reality, and Kevin posted a great article on this exact topic:
Kevin Guz | 12 May 2016
For those individuals who have a full-time career but are looking either for a little extra income or ultimately a whole new career, real estate investing could be the answer.
Maybe I am even a little late to the party with this topic. There is so much excitement around real estate investing today—both full- and part-time—by private individuals who are seeking to start a business of their own. I can personally attest to its viability as a great part-time business opportunity. That is exactly how I started in real estate investing, pursuing it part-time while I was already engaged in a full-time corporate career.
I started my part-time real estate investing business approximately 12 years ago with the purchase of one rental property in 2004. Over the next eight years, my part-time real estate investing business continued to evolve and grow until I ultimately scaled it into a full-time business that replaced the full-time career I had been pursuing. I venture to say a lot of people have a similar story—whether they are just considering the process, are beginning it or have completed it and are now engaged in real estate investing full-time.
I wanted a part-time business. I think a lot of people would probably enjoy some incremental income from a part-time business. Furthermore, I ultimately was very enticed by the opportunity to create my own business and replace my full-time career. I think there are also a lot of people who are equally enticed by the prospect of owning their own business.
So let’s talk about real estate investing and how it played out for me as a part-time opportunity and business, then ultimately a full-time career. That, I hope, will help you see how it might play out for you as a part-time investor or weekend investor today or even somebody who is just doing their due diligence, considering, looking into and investigating a part-time business opportunity—specifically real estate investing.
Real estate investing can be tailored to your needs and objectives
I think the most important point to make is that real estate investing as a part-time business is very viable because you can tailor it to your personal needs, objectives, skills and available time and resources. All of these valuable commodities are probably very limited for you while you’re also engaged in working a full-time job.
Let’s talk about some of the characteristics that make real estate investing viable as a part-time business and see if it fits your current situation as a professional who already has a full-time career.
A relatively easy point of entry
First of all, for me, real estate investing had a relatively easy point of entry. What I mean by that is that I didn’t have to invest a lot of time or money into training—although, of course, some education is necessary, as in any business venture that you are going to undertake seriously. But it wasn’t overwhelming in terms of the amount needed, the cost or the time required for me to get up to speed, educated and prepared to enter into a real estate investing business.
There is no licensing required. Sure, you can go out and get a real estate license. However, it is not a necessity. It may simply part of your personal education and training effort, as it was for me. I found that getting my license was a great help in educating me in the intricacies of real estate. There are no complicated or lengthy certifications required. To be perfectly honest, many people are probably very familiar already with real estate because they have bought a home—or multiple homes—for themselves. So they already have been exposed to and are familiar with real estate and some of its legal and transactional aspects.
The other characteristic that makes it relatively easy to enter into real estate as a business is that you are able to really govern how you want to start and to what extent—meaning you can start small and you can grow slowly. It is very easy to throttle that business approach to whatever fits your current lifestyle and the complexities and obligations you already have as a full-time employee.
Let me give you an example from my personal experience. In 2004, I started very small. I bought one rental house in October of that year. I was familiar with buying real estate, so I didn’t need a lot of training. I previously had bought homes for myself, and this was no different in terms of the purchase, search and closing process. I did my own work on that one rental house as I had done on homes before—painting, fixing up, hanging blinds and cleaning up the landscape, etc. I even self-managed it, in terms of marketing the property, renting it out, supervising it as an occupied rental property. Those were things that I had never done before, but they weren’t too difficult to figure out. My point is that starting small worked for me. It was relatively easy to find, purchase, rehab, market and then manage that property as an occupied rental.
It is a low-infrastructure and low-cost venture
Second, let’s talk about the ease of startup. That is one of the great advantages to real estate investing, in my opinion. It is a very low infrastructure startup and relatively low-cost. What I mean by low infrastructure is that you’re not buying a building, an office, trucks, equipment or hard assets like that. That is one of the beauties of real estate: Your biggest purchase is the real estate itself.
There is one caveat, though. While you are not having to spend a lot on infrastructure, keep in mind—and I caution you—the capital requirements of real estate investing can be significant. When you are putting at least 20% down on every property you buy, I encourage you to be prepared that you have that capital in place so that when you find that property you want, you are able to execute a contract, close and purchase that property before somebody else does.
In my case, my first rental property in 2004 cost $60,000, and I needed 20% down. Ultimately, I only had to assemble about $15,000 to cover the 20% down and closing costs in order to acquire that property. The beauty for me was that because I had a W-2 and an income, I was able to get conventional funding for the remaining costs of that rental property. It is a unique advantage and one that many full-time employees out there today also have. It helps control your costs and your capital investments when you do have a job and you are able to get conventional funding on that first rental property, leaving only about 20% of the cost for you to cover plus your closing costs.
Customize your level of commitment
You can control the pace and the level of your personal involvement. You are busy already as a full-time employee with a full-time career, so that may limit the level of engagement you can have as a part-time real estate investor. The great news is that with real estate investing, you can easily adjust that to what you are able to dedicate in terms of time, energy, money and other resources.
Once again, back to my experience, I bought that first rental property in October 2004, and I didn’t buy my second rental property until nine months later—after I had that first property rehabbed, marketed, rented and stabilized. I was managing my level of commitment. I didn’t go out and buy multiple properties at once and overwhelm myself. I paced my investing, based on what I was able to do in terms of my own time, money and energy. Read More…..
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