OT: Corporate Vs Rentals (by MB [WI]) Dec 11, 2017 3:20 PM
OT: Corporate Vs Rentals (by Frank [NJ]) Dec 11, 2017 3:51 PM
OT: Corporate Vs Rentals (by Richard [MI]) Dec 11, 2017 4:09 PM
OT: Corporate Vs Rentals (by Sisco [MO]) Dec 11, 2017 4:50 PM
OT: Corporate Vs Rentals (by MB [WI]) Dec 11, 2017 5:11 PM
OT: Corporate Vs Rentals (by Beth [WI]) Dec 11, 2017 6:08 PM
OT: Corporate Vs Rentals (by Beth [WI]) Dec 11, 2017 6:08 PM
OT: Corporate Vs Rentals (by Carolyn [MO]) Dec 11, 2017 7:38 PM
OT: Corporate Vs Rentals (by WMH [NC]) Dec 12, 2017 3:04 AM
OT: Corporate Vs Rentals (by Doogie [KS]) Dec 12, 2017 5:27 AM
OT: Corporate Vs Rentals (by GKARL [PA]) Dec 12, 2017 6:10 AM
OT: Corporate Vs Rentals (by Jim in OC [CA]) Dec 12, 2017 6:21 AM
OT: Corporate Vs Rentals (by Busy, busy, busy [WI]) Dec 12, 2017 7:05 AM
OT: Corporate Vs Rentals (by Laura [VA]) Dec 12, 2017 7:16 AM
OT: Corporate Vs Rentals (by Laura [VA]) Dec 12, 2017 7:21 AM
OT: Corporate Vs Rentals (by MB [WI]) Dec 12, 2017 9:12 PM
OT: Corporate Vs Rentals (by J [FL]) Dec 13, 2017 6:51 AM
OT: Corporate Vs Rentals (by Busy, busy, busy [WI]) Dec 13, 2017 9:53 AM
OT: Corporate Vs Rentals (by Ray-N-Pa [PA]) Dec 14, 2017 7:19 AM
OT: Corporate Vs Rentals (by MB [WI]) Posted on: Dec 11, 2017 3:20 PM Message:
I've hit a point with my corporate job, where I need to make a change...in a nutshell my area in the company has lost four people in the last few months to escape from the new regime and all of their work has flowed my way. I'm barely keeping my head above water at the moment.
Then on Friday, my six year old asked me, "why do you work so much? I hardly get to see you", and then my wife on Saturday confirmed it also by saying "I've hardly seen you this past month".
I've been working towards "Freedom", but I am only about one third of the way to where I would need to be financially with rental income to fully cover my current corporate salary. I need to make a change fast to save my sanity, health, and family, but I wanted to get some tips from folks that have done this already (suggestions, pitfalls, etc).
My favorite possibility in my mind is "retiring" from the corporate life and work on managing my rentals and rehabbing houses to help fill in the gaps. Fortunately, I am in a position where, we'll still make it by with the combined income of my wife's job and the rental income; we just won't be "living it up" as we have been.
Another possibility is finding a new job until I have enough rentals to cover all of my previous income (not as ideal in my mind as I'm still not 100% in control).
I've used mortgages to obtain my rentals, so I know if I become self employed it will be difficult to obtain future loans. Are there any suggestions on what I should do to prepare myself to jump straight to freedom or things I should consider first? I'm ready to get another 9-5 if needed, but I'm open for any advice. --66.168.xx.xx |
OT: Corporate Vs Rentals (by Frank [NJ]) Posted on: Dec 11, 2017 3:51 PM Message:
congrats on reaching the point that you know in your gut that it is time to make a change.
Any chance that the new bosses are overloading to goad you into leaving? Perhaps you can work them to pay you to leave?
From my gut reaction you say that you can get by with what you would have if you leave.
If that the case I will leave you with a line from some guy[!] I have heard on the radio. "Live like no one else, so you can live like no one else.
Good luck....stay strong --173.63.xx.xx |
OT: Corporate Vs Rentals (by Richard [MI]) Posted on: Dec 11, 2017 4:09 PM Message:
This is far from a complete answer. Just a few things to consider.
Do you have savings enough to carry all expenses of you get 50 percent vacancies? Having rentals with mortgages and not enough reserves can be risky when/if your regular pay drops.
If you don't have 6 months complete reserves for each rental, I'd think of selling enough of than to get to that amount of reserves. You don't want to have to dig into retirement funds or borrow more money when you might not have credit or cash flow available.
You might do a few flips to gain cash.
Moving from a good regular job to only rentals will require lots of work.At least as much as your current workload.
There's a difference between having a few rentals on the side while you make regular money and depending only on rentals.
If you don't have a lot of cash one of the main things you will need to do is find a reliable source of money for operating expenses and reserves and for new acquisitions.
Others will add more.
--23.121.xx.xxx |
OT: Corporate Vs Rentals (by Sisco [MO]) Posted on: Dec 11, 2017 4:50 PM Message:
MB, based on the information given, you are not in position to quit your day job. This hectic time for you will likely slow.
Keep doing your best and stick with it, but, never forget what this felt like and get yourself into a financial position in which you can quit. Long term (hope for appreciation) leveraged rentals won’t replace your income....they may supplement your retirement income if your time line is long enough.
--72.172.xxx.xx |
OT: Corporate Vs Rentals (by MB [WI]) Posted on: Dec 11, 2017 5:11 PM Message:
Ironically, I'm within the same organization I had been at the company as before, but our org within the company was combined with another area, so the executives changed which increased the workload to an unmanageable level as they don't understand our business. I'd love to get bought out from them, but they'd never do it as I've seen how they operate.
I do have enough in terms of reserves to cover myself for any vacancy, repairs, or capex items that come my way. I also have a partner that I'll continue to do deals with in the future, so that may continue to assist with the acquisitions portion of things; however, we've been 50/50 partners with financials to this point.
I honestly would be most comfortable to jump into another W2 job due to security blanket it provides, but I think it is time to leave the rat race and make it on my own hard work (I do agree initially I probably won't have any additional free time, but it should pay out in the long run). --66.168.xx.xx |
OT: Corporate Vs Rentals (by Beth [WI]) Posted on: Dec 11, 2017 6:08 PM Message:
I felt a tremendous amount of freedom at a previous job when I realized that I didn’t care if they fired me. Or, if I decided I would simply walk out if I didn’t like it. Neither happened ( I did leave when I went elsewhere).
Is it possible that you decide you will work your best 40 hours/week? No more? If they don’t like it, let them fire you?
I get it... some corporations, some bosses are simply heartless bass tar d s. --24.177.xxx.xx |
OT: Corporate Vs Rentals (by Beth [WI]) Posted on: Dec 11, 2017 6:08 PM Message:
I felt a tremendous amount of freedom at a previous job when I realized that I didn’t care if they fired me. Or, if I decided I would simply walk out if I didn’t like it. Neither happened ( I did leave when I went elsewhere).
Is it possible that you decide you will work your best 40 hours/week? No more? If they don’t like it, let them fire you?
I get it... some corporations, some bosses are simply heartless bass tar d s. --24.177.xxx.xx |
OT: Corporate Vs Rentals (by Carolyn [MO]) Posted on: Dec 11, 2017 7:38 PM Message:
Even though you think you will be able to cover various things that go on with your rentals, there are things that can happen that are out of your control and can almost destroy you financially. Try to be absolutely as prepared as possible.
As an illustration, I will write now about some of the very unexpected things that can happen that one isn't ready and prepared for. Overall I am doing OK, and I am making it. However, mentioned my own problems I think is the best way to warn persons of what can happen.
I had thought I was well set for almost anything that could happen financially. I wasn't.
I went to rentals only with no paid employment more than 20 years ago. I did all the routine maintenance on rentals myself. Everything was going well financially. I had lots of reserves and also helped one of my daughters and her children a lot financially and made charitable donations.
Then various disasters happened, and I am now almost broke.
First, in April 2015 I was hit by another vehicle in an accident that almost killed me. Then in February 2016 I had a fall at home that almost killed me yet again. My third very close call with death was in December 2016.
I spent thousands and thousands of dollars on medical expenses above what Medicare and my major medical insurance cover. I couldn't drive and had to get around by bus and walker. I couldn't do even simple repairs myself and had to hire out everything. (That is still the case).
Still I was managing to barely make it. I used up my financial reserves and withdrew almost all of my IRA funds. My children helped me some financially as they could rather than the other way around. I sold some properties but tried to keep the ones that brought me reasonable rent as I had to have some income.
Then last summer came terrible storms in my area. I had huge damages from various neighbors' trees. Only a modest amount has been covered by insurance, and I am struggling with trying to get repairs done and then paying for them.
Again, I give all this as an example of what can happen. It still is rather hard to believe that all of this could happen.
I am very fortunate in having supportive friends and family members. One of the positive things about all of this is to realize there are many wonderful persons who go out of their way to help others having difficult times.
--136.33.xx.xx |
OT: Corporate Vs Rentals (by WMH [NC]) Posted on: Dec 12, 2017 3:04 AM Message:
Carolyn, my heart goes out to you! Our health care system is so broken...you are still alive and that is a miracle, but the financial costs are just incredible... --173.22.xx.xx |
OT: Corporate Vs Rentals (by Doogie [KS]) Posted on: Dec 12, 2017 5:27 AM Message:
When reading your post, the first thing I thought of was health insurance. Maybe you can get it through your spouse's employer. If so, that makes it easier. That's the biggest reason I haven't done the switch yet. Health insurance is too expensive.
Maybe bank 100% of your salary for 6 months and see how you get by living on the rentals and spouse's salary alone. If you decide you can make it then, an extra 6 month's salary in the bank will do nothing but help you have an extra cushion.
Congrats on making it this far where you are thinking about it. Has to mean your rental business is doing good. Sounds like the day for full time rentals isn't far away. I'm jealous! --98.175.xxx.xxx |
OT: Corporate Vs Rentals (by GKARL [PA]) Posted on: Dec 12, 2017 6:10 AM Message:
Carolyn, thanks for sharing. That's a stiff dose of reality. I pray that all of this passes. Folks don't realize how broken the health care system is until you really need it. --172.56.xx.xxx |
OT: Corporate Vs Rentals (by Jim in OC [CA]) Posted on: Dec 12, 2017 6:21 AM Message:
Your w-2 job probably gives you reasonable cost health insurance, Factor that benefit into any plans you make. --75.22.xx.xxx |
OT: Corporate Vs Rentals (by Busy, busy, busy [WI]) Posted on: Dec 12, 2017 7:05 AM Message:
My husband went through a similar situation with his employer a few years ago. After a merger, too many were let go, and HR forgot to factor in the 'well, if they are going to treat people like ----, then I might as well go too.' So, the workload might even get worse before it gets better. (Company ended up hiring many people back, at higher salaries.)
Beth's advice about setting boundaries is excellent. That's kind of what my husband did, well, he actually had accepted another job elsewhere, his company knew how valuable he was, they did what they needed to keep him.
Richard's suggestion to do some flips really works if you are near Uline, Amazon, Foxconn. I would think that area is just going gangbusters.
If you and your wife are not opposed to using credit cards (not for everyone,) I suggest building the stash of credit cards you have, not using them, just slowly adding them while you have the larger W-2 income. When you go off W-2, some credit card companies will reduce your credit limits (when they find out your income has changed,) but many won't. Then, if you ever are going to use credit cards to help with expansion, you will be able to keep your utilization below 29%. But, the whole credit card thing isn't for everyone , in fact, probably not for most people.
That time with your kids when they are little is so important, then the teen years come along, and they need you even more, but, in a less obvious way. You won't regret making changes to be present with your family. That is a luxury like no other.
--172.56.xx.xxx |
OT: Corporate Vs Rentals (by Laura [VA]) Posted on: Dec 12, 2017 7:16 AM Message:
My first impression is that it's too late to leave the corporate world. I liked Beth's idea to cut back to 40 hours and then go home. I worked corporate jobs for years where I was busting my butt and some other jokers were doing the bare minimum and taking sick days all the time. Those people never got fried. And I always got their extra work dropped on my desk. If I was going to do it over, I'd put my family, my rental business, and my sanity first, even it my co-workers thought of me as one of the 'jokers' and go home at 5. On the dot. --67.172.xxx.xxx |
OT: Corporate Vs Rentals (by Laura [VA]) Posted on: Dec 12, 2017 7:21 AM Message:
Whoops - I meant to say "Too early to leave the corporate world." Too much cold medicine in my brain this am :) --67.172.xxx.xxx |
OT: Corporate Vs Rentals (by MB [WI]) Posted on: Dec 12, 2017 9:12 PM Message:
Fortunately, my wife does carry our health insurance now; I saw things starting to change over the past few years at the company, so we made that switch last year. I like the idea of banking 100% of my salary for a few months to confirm I'm not in over my head.
Busy, Busy, Busy - I'm in the Fox Valley area, so Foxconn, Uline, and Amazon are quite the distance from me, but the valley keeps on growing....unfortunately, we don't have the major players like in the southern part of the state.
I'm meeting my "new" third boss within the last five months tomorrow, so I think that will heavily weigh on what I consider as my final path forward. Right now I'm going to do what I can to stick it out for a little while longer and bank my salary, but I'm going to be pulling back to the 40-45 hours they claim I only need to work each week in the interim. I'll be looking for houses to rehab and additional properties to purchase in the interim to hopefully build the portfolio....just talked with an owner of an 8-plex over the weekend (that could be a game changer if we can get to an agreeable arrangement).
I have come to the point where I will walk if they push me to it...I guess I'll see what happens tomorrow.
Thanks for the advice everyone. --66.168.xx.xx |
OT: Corporate Vs Rentals (by J [FL]) Posted on: Dec 13, 2017 6:51 AM Message:
Carolyn, so sorry. I remember hearing of your accident but I didn't know of the other stuff. --72.188.xxx.xxx |
OT: Corporate Vs Rentals (by Busy, busy, busy [WI]) Posted on: Dec 13, 2017 9:53 AM Message:
Iir, there is a pretty active landlord association in your are, just in case you aren't a part of one. Pleasant Prairie is too far from me too. I've heard good things about Fox Valley economy lately too, so I'm glad you have that opportunity. Good luck on the 8 plex.
Carolyn, glad to see you on here. Keep healing. You have been a wonderful help to many of us. --172.58.xxx.xx |
OT: Corporate Vs Rentals (by Ray-N-Pa [PA]) Posted on: Dec 14, 2017 7:19 AM Message:
no one knows exactly if we are at the top of a real estate cycle or not, but it rather safe to say we are a great deal closer to the top than we are the bottom - so now might not be the very finest time to quit a day job.
Things might get dicey for you, if the economy suddenly goes South tomorrow. In due good time, you will know when to make the break. The great news is you are seeing the reasons to jump off the madness ladder --24.101.xxx.xxx |
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