Dropping W2 Job (by Tex [TX]) Oct 9, 2017 2:26 PM|
Dropping W2 Job (by Pmh [TX]) Oct 9, 2017 2:34 PM
Dropping W2 Job (by NE [PA]) Oct 9, 2017 2:38 PM
Dropping W2 Job (by Pmh [TX]) Oct 9, 2017 2:51 PM
Dropping W2 Job (by Homer [TX]) Oct 9, 2017 2:55 PM
Dropping W2 Job (by WMH [NC]) Oct 9, 2017 2:57 PM
Dropping W2 Job (by Kurt [MI]) Oct 9, 2017 3:48 PM
Dropping W2 Job (by Chris [CT]) Oct 9, 2017 4:55 PM
Dropping W2 Job (by Deanna [TX]) Oct 9, 2017 5:07 PM
Dropping W2 Job (by AllyM [NJ]) Oct 9, 2017 5:15 PM
Dropping W2 Job (by Laura [VA]) Oct 9, 2017 5:22 PM
Dropping W2 Job (by allin [VA]) Oct 9, 2017 5:42 PM
Dropping W2 Job (by Laura [VA]) Oct 9, 2017 5:56 PM
Dropping W2 Job (by LindaJ [NY]) Oct 9, 2017 7:28 PM
Dropping W2 Job (by LisaFL [FL]) Oct 9, 2017 7:52 PM
Dropping W2 Job (by S i d [MO]) Oct 10, 2017 5:24 AM
Dropping W2 Job (by Barb [MO]) Oct 10, 2017 7:58 AM
Dropping W2 Job (by WMH [NC]) Oct 10, 2017 8:44 AM
Dropping W2 Job (by Chris [CT]) Oct 10, 2017 11:31 AM
Dropping W2 Job (by S i d [MO]) Oct 10, 2017 12:36 PM
Dropping W2 Job (by Barb [MO]) Oct 10, 2017 3:20 PM
Dropping W2 Job (by Bill [KY]) Oct 10, 2017 5:40 PM
Dropping W2 Job (by BRAD 20,000 [IN]) Oct 10, 2017 8:47 PM
Dropping W2 Job (by Tex [TX]) Posted on: Oct 9, 2017 2:26 PM
At what point would you retire from your fulltime job. Im planning on just doing my 20 in the swamp and concentrating solely on my rentals approximately one year out God willing.
Dropping W2 Job (by Pmh [TX]) Posted on: Oct 9, 2017 2:34 PM
Not sure why you asking here. That is really a personal financial decision.... --166.137.xxx.xx
Dropping W2 Job (by NE [PA]) Posted on: Oct 9, 2017 2:38 PM
I quit mine before I bought my first rental. --174.201.xx.xx
Dropping W2 Job (by Pmh [TX]) Posted on: Oct 9, 2017 2:51 PM
I wound have quit mine. but got married. so everything changed..... lol. --166.137.xxx.xx
Dropping W2 Job (by Homer [TX]) Posted on: Oct 9, 2017 2:55 PM
I started buying rentals without a job. It would of held me back. My wife had a job in the medical field, but was able to retire at 45 a few years ago. 11 years in to our rentals, Her coworkers were stunned, lol --75.141.xxx.xxx
Dropping W2 Job (by WMH [NC]) Posted on: Oct 9, 2017 2:57 PM
As soon as you can. It's ASTONISHING how much money you can make once you concentrate. --173.22.xx.xx
Dropping W2 Job (by Kurt [MI]) Posted on: Oct 9, 2017 3:48 PM
To me I think I wouldn't be comfortable until I reached a net income (after taxes)from rentals that is at least 1.5 times my living expenses.
I think I would want that ".5" cushion to cover for the inevitable disasters.
WMH, did you have any "margin" before you quit? --192.241.xxx.xxx
Dropping W2 Job (by Chris [CT]) Posted on: Oct 9, 2017 4:55 PM
Don't know I started full time in real estate half way threw collage and never looked back.
Dropping W2 Job (by Deanna [TX]) Posted on: Oct 9, 2017 5:07 PM
Don't drop it until you've had all the bank dealings you want. :)
I took out a loan against a paid-off house owned by the LLC. But I couldn't get a loan in the single-member LLC's name. So I had to personally guarantee it. And then, because I didn't have a W2 job, DH had to personally guarantee me. Even though it was just, say, a $30k loan against a $40-$60-whateverk house, I still wouldn't have gotten it if DH wasn't W2 employed.
If you don't have a spouse or someone to rely upon, it might make things much rockier for you if you plan on continuing to borrow money, regardless of how well-covered by collateral you think it may be. --96.46.xxx.xx
Dropping W2 Job (by AllyM [NJ]) Posted on: Oct 9, 2017 5:15 PM
When you have a hundred grand in the bank to cover all the bad stuff that happens and still give you some pocket and let you sleep at night.. --73.33.xxx.xxx
Dropping W2 Job (by Laura [VA]) Posted on: Oct 9, 2017 5:22 PM
Ask around for a good financial adviser that is also a tax professional AND owns RE rentals. If you were in VA I'd have a name for you :) Mine was a godsend when I was trying to set things up for retirement. It is expensive (nearly 1% of brokerage/IRA account total, per year), but very worth having them run the retirement analysis software while factoring in the specifics of your rentals, for different scenarios. You may find you don't need them every year - just to set you on the right path and then for an occasional check-up.
Or - Fidelity has a good online retirement analyzer that you can use for free for just setting up an empty account, but you have to be able to calculate your own future rental income rates, expenses, depreciation, eventual liquidation amounts & tax consequences, etc.
Good luck! This is not a decision to take lightly! --67.172.xxx.xxx
Dropping W2 Job (by allin [VA]) Posted on: Oct 9, 2017 5:42 PM
I am finishing up w-2 work as we speak. For me I wanted to have as much income from the rentals as the job I was giving up. I ran numbers to be sure that not only could I pay the bills but I should be able to pay for rental maintenance and still save for big stuff. As others have said once you retire it gets much more difficult to work with banks. Also check on health insurance as that is a major cost. I actually went part time several years ago so I sort of weaned myself off the steady paycheck. --97.34.xxx.xx
Dropping W2 Job (by Laura [VA]) Posted on: Oct 9, 2017 5:56 PM
Oh, yeah, Allin is right - check your health insurance choices before you quit your day job- that's what scares the cr*p out of me right now - rates are going up up up and insurers are pulling OUT of individual policies. I'm not sick, but if I became sick and I lost the protections of the ACA, I'd have to go back to a regular job (if I even could) and my salary would be quite a bit less than it was while I was more employable. --67.172.xxx.xxx
Dropping W2 Job (by LindaJ [NY]) Posted on: Oct 9, 2017 7:28 PM
I quit when I was eligible for retirement. I get a pension, and health insurance for the family. Rentals add on day time work for me maintaining and fixing and extra money coming in. --96.236.xx.xx
Dropping W2 Job (by LisaFL [FL]) Posted on: Oct 9, 2017 7:52 PM
My rental income brings in a very nice salary. I can live off it comfortably and never touch my savings.
I required enough in savings to cover all contingencies before deciding it's all I needed.
It's more a matter of what you feel comfortable with. --173.170.xxx.xxx
Dropping W2 Job (by S i d [MO]) Posted on: Oct 10, 2017 5:24 AM
Bank your W2 income for a year. If you can live off your rental income only without suffering an unacceptable loss of lifestyle, you're ready...AND you've got a beefy emergency fund in case the worst should happen.
A lot of this decision is life-style based. Are you going to increase or decrease expenses? I'm scheduled to pay off my personal residence next year. At that point, I could go part-time (25 hours a week) and our family wouldn't even blink. But I enjoy my work for the most part and we have some goals so the plan is for about 8 more years, then done.
Who is doing your maintenance and property management? I think too many "one-man show" land lords forget that if something bad happens to them, unlike a W2 job, there's no one to cover for you. Rents can evaporate overnight if you become medically unfit to be a land lord and you don't have automated systems in place or someone to step in and take over. --173.19.xx.xxx
Dropping W2 Job (by Barb [MO]) Posted on: Oct 10, 2017 7:58 AM
Sid's method is spot on!
I'm looking at my own timeline right now. We will be debt free in about 4 years - house, car, kids done with college. Possibly less - particularly if we travel less. It would be a lot less time, but we made major renovations to my personal residence (over $40K) that we paid cash for so we didn't pay off the house or pay cash for the new car we decided to buy thanks to different needs, and the service dog I've spent a fortune in time and money training. Necessary, though.
In my case, I can probably leave my job in 5 years, as long as hubby keeps his for the insurance. I'll qualify to retire from my W2 job and keep my own insurance plus get a decent pension in 13 years. It seems far away, but really isn't that far away, and in 13 years, all the rentals would be paid for, and many of them torn down and rebuilt. I'm setting them up to snowball the payoffs. I've got 4 months of rental expenses in the bank, so a roof, or an HVAC won't mean running to the loan officer or credit card now.
All a matter of what you want. Insurance is what scares me the most, so I may very well stick it out for the 12- 13 years until I can keep the insurance in my own name. Sad, isn't it? Working for insurance? Lots of people doing it, though. --131.151.xx.xx
Dropping W2 Job (by WMH [NC]) Posted on: Oct 10, 2017 8:44 AM
We finally dropped out when our personal home was paid off (using the last several years of W-2 money and living off the rentals only) and we found a health insurance plan we could live with (catastrophic care.)
Unfortunately the ACA has driven our premiums for that up by 22% (from $450 per month to $2100, plus $920 a month towards deductible.) We had to buy a few more houses to support the increase.
The good news is that once he finally gave up the W-2 job in 2012, we have grown our business by 10 doors (and doubled our the previous W-2 income...) --173.22.xx.xx
Dropping W2 Job (by Chris [CT]) Posted on: Oct 10, 2017 11:31 AM
Coming from someone who never had a W2 income a few thoughts:
Don't bank on living on 100% of your rental income. Stuff happens, it just does. If your rentals bring in $100k a year don't figure on living on $100k a year. Figure on $50k-$75k, stuff happens. Sometimes you can live on the full $100k sometimes not. On some good years you might clear $120k, just don't peg your spending to your best year.
Have some cash laying around. 6 months is a solid number that can smooth out any cash flow issues. You need some reserves to fall back on. This is separate from any reserves for your rentals, this is your money for your expenses. I have a separate money market account set up for this.
Budget for health insurance. Mine is $330 a month, my 57 year old uncle with a few issues pays about $1200. That's on top of high deductibles. HSA's are your friend. Health insurance isn't anything scary its an expense like anything else, if your over 50 figure on a grand a month.
Dropping W2 Job (by S i d [MO]) Posted on: Oct 10, 2017 12:36 PM
Barb, I don't know anything about your personal situation, but don't let fear of healthcare costs stop you from exploring the options.
There's a great website called "retireearlylifestyle" hosted by a couple who "retired" at age 38 with $500K between them. They've been traveling the world and have all kinds of adventures for the past 20 years, and one of the key components of their plan is how to deal with healthcare costs. Some good recommendations there.
Even if their ideas don't fit you, I think most people can do fine with paying for their own insurance and/or a la carte healthcare given:
1) Little or no family history of major hereditary diseases.
2) Maintain a reasonable diet.
3) Moderate rate of exercise.
4) No smoking, no abuse of alcohol.
5) Maintain a healthy weight. I'm sorry, but the "healthy at any size" movement is bogus...at least in terms of insurance premiums! I'll let the experts debate the rest.
Basically, you need to treat insurance like what it is really supposed to be: a protection against CATASTROPHIC loss. Think $50K bill for a bypass. High deductible insurance can be purchased relatively cheaply.
Many insurance plans are very expensive because people either already have one or more risk factors that guarantee long-term, expensive treatments, or they "use" their health insurance for everything under the sun. ACA might not allow many "bare bones" options these days, but there are also medical cost sharing services/groups. Christian Healthcare Ministries is one.
Find a good local PCP who will do yearly check ups and basic office visits for $100 or so, cash paid at time of service. Specialists will often negotiate rates too.
Explore your options to pay out of pocket / self-insure and enjoy yourself! --173.19.xx.xxx
Dropping W2 Job (by Barb [MO]) Posted on: Oct 10, 2017 3:20 PM
Sid - I get it, really I do. I'm in the group that will always need a good insurance policy.
Meanwhile, I enjoy my W2 job, like working with students and faculty, generally like my colleagues, and get 26 days a year in time off, plus sick leave. The sick leave can be banked a great deal, the other days much less.
My boss said the other day that I'm one of the people she knows who "works to live rather than lives to work".
We are going on a Caribbean cruise with the family in about 2 months, then spending two more weeks in late February. I'm also looking at Alaska in May. Sadly, I still won't make the MrLL Conference, because we have another competing conference to attend that starts the same time. See what I mean about traveling less? We are enjoying what we make at the W2 job! --131.151.xx.xx
Dropping W2 Job (by Bill [KY]) Posted on: Oct 10, 2017 5:40 PM
I always love these questions...Iím 36 and obsess/dream about when I can hang it up and live off rental income. I love the FIRE (financial independence/retire early) movement but honestly donít know if I could walk away even when Iíve hit the arbitrary retirement # that I dream about for fear of the unknown (losing half in a unexpected divorce, natural disaster (Houston), lawsuit, insurance premiums, stifling taxes on the so called wealthy, aging parents I will undoubtedly care for, long term care expenses, etc).. I think the fear stems from seeing parents struggle financially and worrying about being in that position at some point down the road if a few curveballs hit the strike zone. My children will inherit Camelot without the irrational fears of their father. --24.26.xx.xx
Dropping W2 Job (by BRAD 20,000 [IN]) Posted on: Oct 10, 2017 8:47 PM
It boils down to your DREAM. The goal that is so strong it keeps you up at night, and puts a fire in your belly, you spend your lunch hours and weekends learning and doing and making calls
Life interrupts your plans so start NOW and you could be free soon. I got a burn for FREEDOM!!! and went crazy busy. Itís absolutely amazing how much money you can make in RE with
Seminars, books, and courses have made me wealthy and FREE!!! Every penny spent and hour invested increases my income.
Jeffrey has a big weekend very soon. If you are serious, get your bod in a chair and learn. My buddy Lee calls it Millionaire School.
Build your business like a maniac until you are making double your W2 income on the side. Maintain that for one year.
Money is made in your brain. Your thinkin* and belief will set your income. First by learning about numbers bigger than your job, then by ideas and concepts which produce more than your job.
Start today. Any activity is better than nothing.