From RE Entrepreneurship/Investing to Full Time Job

Hello - have a bit of an interesting situation and was wondering if anyone here had experience with or knew somebody who had been through a similar dilemma. Long-story short, I am a CRE Asset Management professional (focus on hospitality assets - yes I had a great last year :P)  who, along with a few other folks I knew from college (all happen to live in this town in the pacific northwest), have a side business of investing in properties mainly SFRs and now smaller hospitality assets, thinks motels, etc.

I am basically at a crossroads now where I need to make a decision based on what to do next - either do investing full-time or continue on with my job, or some combination of both. I am very fortunate that my full-time role does not prohibit me from owning real estate (at least for now).

Essentially, we started investing in these properties with our own capital/savings as a hobby, the first few were exhilarating but fun and it felt great to use the knowledge we acquired at our jobs for personal investing. Fast forward 10 assets and we were using capital from friends & family to buy slightly larger assets and even hire property-level staff/PMs, etc. Last year, one of my business partners was able to get his former firm to back us as well for future deals.

While having a full-time job and also having a side-business that brings in cash flow/assets on the side is great, it is really getting to a point where doing both things is not sustainable. Things are so frantic between the job and the investing stuff that I dont even have time for errands like dropping off clothes for dry cleaning or getting my car tuned up. We are expanding (and actively doing) newer things like lending, acquiring/converting other smaller quasi-distressed assets, etc. While this all sounded incredible a few months ago as a single man in his mid 30s - I am somewhat questioning this path. I wake up tired everyday, have no free time to have fun or find a significant other, etc. I love investing and building a small business, but i find myself wondering if is practically the best thing to do for myself, my health and my life in general. I know everyone's used to working long hours, but the past 3-4 months of working 24/7 has sucked the life out of me, especially with no downtime. Cant even get a drink anymore as I'm worried even a slight hangover will slow me down with the work we have to do!

My full-time job is great and I dont mind doing it for the long-run, but as you can all imagine having your own investments/business is much more appealing from so many perspectives.

Basically thinking of the scenarios below:

1) Continue on and hope things get better lifestyle wise - we did get incredibly busy for the past 2 months (work and investing at the same time), however it is not always going to be this busy, especially at work (I dont mind being slammed for my own stuff). And eventually transition out of my asset management role and do our investing business full time. This should 'hopefully' make my life a little bit more bearable.

2) Continue on with my job, but only involve myself in certain aspects of the investing business with my partners. This limits my upside but means I wont be working 7 days a week for months on end. I am also not sure how I would be able to 'structure' such an arrangement.

3) Quit investing actively cold-turkey and just participate in a more passive/LP role with my partners (or elsewhere) and focus on my job, focus on hobbies and try harder not to be single :P. Not a crazy amount of upside being a passive investor + just having a W-2, but loads of free time.

Ideally I'd want to stay until end of the year at my job to get my year-end bonus even if i decided today I want to quit ASAP, so I am with my firm for at least that period of time. However I do need to make a decision soon (at least in my head). I dont want to get too deep down the investing route with my partners and then just quit all of a sudden - nor do i want to walk away from a business all of a sudden.

There is still a lot of thinking for me to do, but would welcome anyone's opinions on this situation - especially if they have been in a similar scenario or know somebody who has.

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Comments (2)

Most Helpful
Aug 25, 2021 - 11:41pm

At the end of the day this comes down to your personal risk appetite and how much you value financial success, so there is no right or wrong answer. When you own your own business (esp when starting off/less infrastructure), there is no 9-5. The job is done when the job is done because if you don't do it, no one else will. When you go on vacation you will likely have to do some level of work because once again if you don't do it, no one else will (but in my experience, most things can wait a week or 2, unless it's property management related...can't make my tenants wait for me to come back from vacation to install a new hot water tank). If the idea of being unable to turn work completely off is revolting to you then yes...maybe owning your own business isn't for you. But if your apprehension is related to the financial risks involved then a lot of the "answer" depends on the success of your business and how confident you are in it. I assume that if you've acquired 10 assets, have been able to raise capital from multiple sources, and are now expanding into new lines of businesses/strategies...then the business can't be doing all that bad. Does the business provide any fixed income to you/your partners? If not, can you charge acquisition/asset mgmt fees to your investors or for assets that you are the operator, can you finance development/project mgmt fees from the lender and pay yourself something?

Obviously being able to continue at your full time job and work on your investing business at the same time is the most ideal financially/risk-wise and I would continue that for as long as you can. But if you've really hit a breaking point and can only pick one then it comes down to your risk appetite. Assuming that your side business is doing decently and you believe that there is a lot of potential, then if I were in your shoes, I'd pick the investing route over working a stable full-time job. You're single with no dependents and  at mid-30's I assume you have a decent rainy day fund saved up. If shit hits the fan, your family won't starve and you just go back to working a full time job. With the experience that you gain going off on your own, I would think you'd have a lot more to offer future employers.

Just my $0.02...but I am probably almost 10 years your junior, so take my thoughts with a grain of salt. Also..what do your partners do?

Aug 26, 2021 - 2:21am

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