Flipped Houses, Own Rental Property - Now I Can't Find a Job
Background: I'm originally from NYC, but I attended university in Ohio in 2007. While in university, I managed to buy, rehab, and flip 10 houses primarily in B and C class neighborhoods. I never finished college in Ohio, and couldn't stand to live in Ohio, so I decided to move back to NYC and finish college at Baruch College, but before doing so, I parlayed all my profits into 8 rental properties in Ohio (all distressed properties which I stabilized and am getting 20%+ caps, with pretty much no appreciation).
I now live in Queens, NY and collect about 8k monthly rent from my properties in Ohio. I have been working in a commercial real estate brokerage for the past two years, and I do alright - I have a few notable retail and industrial deals under my belt, but I'm not killing it by any means.
I know I'm not going to be in commercial real estate brokerage forever. I know the true path to wealth is by being an owner, a developer, etc. However, the barrier to entry in NYC real estate is very high. Currently, I'm trying to transition into a real estate related job where I can learn useful skill-sets that will benefit me in my real estate career. To be brutally honest, I've come to realize I don't have much job skills. I have a degree in real estate development from Baruch College in NYC (an eyesore for recruiters who typically look for Columbia or NYU real estate degrees). I have minimal Argus and excel modelling experience from my college days. I have been teaching myself real estate finance by watching semesters of recorded classes on Real Estate Finance at Columbia Grad School on YouTube.
My quarter-life question to the community: What real estate jobs am I really suited for right now? I'm somewhat lost in life and would appreciate any direction!
Is the 8k monthly after or before your rental and expenses?
You can use the income earnings to slowly increase your profit. It is a working business model, after all. If you are really desperate for work, internships and networking are what makes or breaks people in this industry, esp. if you did not come from a feeder/ivy school. Tons of success stories of people landing dream opportunities from non-traditional backgrounds, but you've already accomplished what a lot of people have not.
Hustle man, hustle. Teaching yourself and OJT are two completely different monsters. Worse comes to worse, CFA 1?
8K is before expenses. NOI is about 6k per month. I could sell my portfolio easily at a 8-10% cap, or about 800k, of which my basis is about 400k. I could pull the trigger and sell my portfolio and try to invest in 1-3 family homes in Queens/Brooklyn. However, that 6k per month sustains some of my living costs and my $2k per month 1 bedroom apartment that I rent in Queens.
I suspect you wouldn't get the same cashflow in the NYC area. Have you thought about getting into property management?
Thanks for your responses. The investment strategy I employed in Ohio is not easy to emulate in the Queens/Brooklyn market. In Ohio, I would often buy a property for 50k, put 30k of renovations into it, and sell it for 150k (minus commissions/fees). This was year 2008-2010. I would often achieve 60% to 80% returns on a flip (granted, I was dealing with relatively lower home prices than NYC). In Queens/Brooklyn, it would be very hard to achieve those percentage profit margins on residential flips. In the past year, have scoured MLS, gone to court house auctions, mailed lis pendens, cold-called owners, but have had no success in obtaining any deals. Networking with local investors, I realized most investors buying in good areas (Astoria, Williamsburg) typically buy and hold for appreciation, or flip immediately for very thin margins. The investors buying in lower-income areas such as Bronx, Jamaica, East New York, are still doing flips for typically 20%-30% profits or rentals to achieve typically 7-10% caps when stabilized.
I wanted to find a job to supplement my income (which builds up my savings to purchase NYC properties), and learn real estate skills other than fixing and flipping. Honestly, anybody can flip houses - it's simple math, no modeling required. On the other hand, aspects of real estate such as development or syndication require much more sophisticated real estate knowledge, and that's something I would love to eventually transition into. I just don't know what path to take right now.
Regarding employment prospects, networking is still going to be your best bet. You can always do a MS in Accounting and always be employed, know how to run the numbers, and grow your business. The problem with NYC is the RE market is really high, so breaking in with a similar model is next-to-impossible (from what you told us) unless you know specific key players who understands the market fairly well.
Well, keep hustling.
I 101% agree with the spirit and substance of what the guys are saying above. To that I will add:
I think you are getting overly fixated on this pedigree aspect and missing the perspective that you have built up a lot of excellent practical skills and "get out there and do something on your own" confidence (which is a major mental roadblock for would-be entrepreneurs) together with a decent passive income which will open the door to later opps.
There are many people with this exact background that have, through dedicated hustle, met the right partner or partners and utilized this (a track record of re success and equity to invest) background into a being what most RE folks are striving to be: a re business owner/investor and not a cog in somebody else’s success machine.
As an additional point, most acq employers state they want someone with an undergrad degree in finance or real estate (eg, the linchpin will not be a top Master's of Real Estate degree from NYU, Columbia or the like). You already strongly check that box with having a BS/BA from Zicklin School of Business in Real Estate Development (which has a variety of resources that you can tap - arrange coffee with all of the profs and get contacts from them for more coffees. Track down and get coffee with as many Zicklin Master's in Finance and MBA folks working in NYC Real Estate and follow the leads where that goes). There is absolutely no need to dump ~$100k of potential re investment dollars in additional education (when you can accomplish the net effect of your goals with what you have already). You are in a time when there is an incredible amount of 'technical knowledge bootstrapping' available to you so that your functional skills conform to the image of a guy who has an undergrad degree in RE and manages/owns an out of state MF portfolio (from Udemy, Youtube excel demos, REFM/BIWS, books avail via Amazon from linneman and others - resources that didn't exist in the blackbox that was REPE/Development/Acq education only 10 years ago).
In sum, like they said - hustle and plant seeds where the land is fertile - which in your case looks like your day job. Network hard/give over the top value with the blue chip clients that are looking to invest via your brokerage group and see if you can turn that into the role you want or (MUCH BETTER) a business opportunity where you are part of the equity stack (and not relegated to worker bee strata ad infinitum).
My apologies if the above is a bit chunky and overly verbose - just up and making the coffee. I wish you all the very best.
ps: Also, I would start listening to such programs like the Magic of Thinking Big (full-audiobook version is avail gratis on youtube) to get your mindset fully primed since networking and proper mindset go hand-in-hand.
curious how you are able to own an out of state portfolio? do you have an operating partner on the ground? how does it all work?
I was attending university in Ohio and read a few books on real estate, so I decided to spend all my savings from my high school jobs to buy a foreclosure near my school, and luckily I flipped it for 3X what I paid for it. From there, I repeated the process many times. I've developed enough relationships with contractors there so that they run my service/repair calls and I send them a check.
How much do the homes typically go for?
cool how does leasing work for you?
In my humble opinion, you have learned how to manage properties from afar. Not sure how you manage your Ohio properties, but you do. If NYC is too expensive, why are you so focused on New York? If you can invest from afar, and maybe flipping isn't the correct strategy, but maybe it is, find another market you like and go after deals in that market.
+1 Pudding
I think the OP is after the prestige factor of NYC.
Not sure what OP stands for, but I don't care about prestige at all. I care about the best return on my money, and living in a 1st tier city where there's things to do. Ohio's economy was much weaker, the speed of life was much slower compared to NYC. That's why I decided to move back to Queens.
OP = Original Poster (you).
I think you are setting your sights too high. Just look for a position at a firm/company and start slowly, you can't expect to jump into a six-figure salary from the get-go. I think you need to pay your dues, but either do a 2-year program then MBA or try a MS in Finance or MS in Accounting (prefer Accounting) and land a job, build your knowledge/wealth from there.
You have a lot of options, but I think if you got an assistant role or operations role at a firm you'll be set for awhile.
Then again I can be 100% wrong on everything, but I think you should explore all of your options.
Lol at looking for a job. Go buy more houses in Ohio and keep doing what you're doing. Why work for someone else when you are good at what you are doing.
I would keep on doing what he is doing, but I think he has a strong desire to do more instead of build up his portfolio.
TNA Nailed it on the head.
I've been an indi CRE broker since 2001. Last year I joined this forum to learn about what analysts really do...what Acq managers really do, etc. After interviewing several times, networking my ass off and coming up with nothing, I realized I needed to recommit to my brokerage. Once I did that deals showed up far beyond what I could have imagined. I must close them but the pipeline is there.
Once you commit to one direction, and I believe you're much more of a sole proprietor/broker than a salary guy, direction will become much easier. Luckily for me, looking for a job only lasted a year. I'm now back doing what I've been doing since the mid/late 90's and don't see myself turning back.
Every few years you're going to get bored in this business. New challenges will present themselves within your skillset. Push through these challenges rather than let them make you want to change course.
Move if you want to. I get it, lifestyle matters. But your model is as an investor. Do that. Get your NY license/broker license if you don't have it and keep your eye out for deals.
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