Has anyone here actually made it in RE on their own after leaving their formal job?

jnijnijn's picture
Rank: Baboon | 154

For example, you did 2 years as an analyst at HFF, then 2 years REPE, maybe 2 years in development, then left to start your own little shop or successfully learned enough about RE to live off your own personal RE investments?

Comments (37)

Mar 7, 2017

Plenty of people have, but probably very few of them hang out on this forum.

I can't imagine many people have managed to break off on their own after just 4 years in the biz though (barring family money). Not enough time to accumulate capital/relationships, or even experience tbh.

Best Response
Mar 8, 2017
cre_questions:

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p>I can't imagine many people have managed to break off on their own after just 4 years in the biz though (barring family money). Not enough time to accumulate capital/relationships, or even experience tbh.

Hah, because there is always an anecdote, a friend of mine did just this. Worked for a hotel company in their development department for 4 years in the recession, quit, and started his own company. He basically served as a developer for hire for rich people who wanted to "get into real estate" but knew nothing about it. The rich person would go to the bank, the bank would put the rich person in touch with my friend, and my friend would get a very small percentage or even a flat fee for being the project manager. He made enough to get by but nothing impressive, but that wasn't the point - he now had a rather long resume of project experience.

On one of the jobs, he made friends with a construction company CEO he hired who had a lot of money and they worked well together. They started a development business with the construction CEO as the silent partner and now my buddy builds things on his own for his own company. No office. No staff. - Just living the dream.

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Mar 8, 2017

How did he get the referrals from the banks for business if he had little experience himself?

Mar 8, 2017

That really is the dream. No big shop, just you and a couple of close partners crushing deals and working whenever you want.

Mar 8, 2017

This is a form of merchant building in a way and is a good way to get started. My goal would be to do the same - fee developer...offer development services for simple fee only, no equity...generate enough fees over time to then use as equity in your own deals. I feel like as soon as you have 4-500k saved you can start doing your own deals with just your equity. That's a 1.5m-2m deal there. Even if it's to go build a Taco Bell BTS NNN deal or something. There are actually really large players in the field of development services that specialize is various fields. Refrigerated boxes comes to mind. I have seen large grocers that pay crazy fees to a no risk "developer" who is really a no skin in the game consultant.

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Mar 7, 2017

I would like to hear about some stories about this as well. I just graduated college so I am just entering the biz, but I want to do this eventually. I feel like if I were to do this, I would try to start with a JV investment on the side while still employed and then build from there.

As far as purchasing real estate in order to live off the investment, check out Bigger Pockets. The stories are more about investing in RE for passive income and buying duplexes and small commercial stuff rather than a 40 million dollar office building, but it is interesting to read. A close friend of mine's dad did a lot of what is recommended on here and makes a boat load off of rentals.

Mar 8, 2017

The goal for me to is to pick up some MF or SFRs in coastal SoCal and AirBnb them. That's where the real cash flow is ;)

Mar 7, 2017

Probably couldn't break out on your own after four-six years, but you could definitely have the money to buy a couple duplexes or possibly syndicate some deals for your family/ friends.

Mar 8, 2017

Depends entirely on what you mean by "break out on your own". I know plenty of young guys who sponsor and syndicate deals. It isn't ability to identify a site, raise capital, or execute that stops most people... It is the fact that they don't want to give up a steady paycheck.

Mar 8, 2017

This may be a product of who I have met in the industry but I feel like 90% of people who syndicate full time, are the same people who use it as a title. Basically they didn't really need to work a job Rich parents) anyway and make fore better conversation than I do nothing. Never met anyone who really came from nothing and was doing syndication on their own making a living for themselves.

Mar 8, 2017

There are tons of people out there who are living off of rental properties/flipping homes as well. I know this forum is CRE focused, but you can make an insane living off of small MF or even single family.

Mar 8, 2017

A lot of people shy away from SFR because of all the extra work required.

Mar 9, 2017

In response to @MonopolyMoney , this is true. My goal is to pick up a few multi units in the primary market I am in, which is average home sells for 150-250k. I'm looking at a few 2-3 units that throw off $1200-2000 in rent monthly at purchase prices of $75-150k. Accounting for repairs, capex, mgmt, vacancy, theses will CF a few hundred monthly. As a first year guy, this is how you start to build long term wealth.

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Mar 28, 2017

This is exactly what I do on the side. I own 2 single family rental properties. I'm in a smaller city that is growing so on top of the ~$400/month + mortgage payment equity, I'm also getting the equity in the increase in property value.

Bought my first property in 2012 for $215k with ~$40k down and that property is now worth ~$265k so a 125% gain in my original investment over 5 years...not too shabby. I could sell that property and buy 2 more $200k properties with the proceeds if I wanted. My plan is to steadily build up my portfolio so I'm eventually just a slumlord with enough income to replace having to work.

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Mar 9, 2017

I'm tryin', OP. Started my own real estate-related business last year (still working in my full-time job) and produced our first revenue in December 2016. About to produce our second revenue in May 2017 (just negotiated terms). I will be looking to go full-time in March 2018 (God willing) if we can get seed/Series A investment.

Good thing I'm physically and personally repellent and therefore single, otherwise I would never have had the courage to attempt a personal venture.

Mar 9, 2017

Awesome man. I vote for an AMA already lol. One question - what is your role in your full time job, and how did you get the equity for the first deal on the side venture? Cheers

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Mar 9, 2017

It's a real estate-related company, not a real estate development company. Without getting into too much detail on here, it's fintech. I work for an owner/operator/developer in my full-time role; I am the company's chief analyst (we have about $1.5 billion real estate AUM)--in other words, I do everything from budgets to acquisition and disposition analysis, writing legal memos to writing memos to banks, from interviewing brokers to obtaining insurance quotes, negotiating commercial leases to automating administrative tasks.

Mar 10, 2017

I vote AMA as well!

Mar 9, 2017

My father worked as a computer teacher (Microsoft + and other stuff). He started to make pretty good money, through teaching. He began to save, and then he bought his first real estate property. He, then, started wholesaling contracts and renovating/renting out houses. He worked a lot. I mean a lot.

He never worked in a reit, repe, or ib. He never did anything, in finance.

10 years later, he has 110+ units worth a few million dollars.

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Mar 9, 2017

Great example of how you can build long-term wealth in residential real estate without being in the "majors."

Mar 10, 2017

If you look at the real titans out there, most of them started out this way. Buying SFR or small low quality commercial and slowly building their way up.

Mar 10, 2017

A work colluege is friends with this guy Aidan Brooks, he's worth PS410m and never had any education beyond high school. He started as an aerial installer and bought up derelict property with his spare with his dad. Kept growing it and then did a savage deal turned nice profit and kept growing it! Goals.

http://www.irishtimes.com/business/companies/irish...

Mar 10, 2017

Didn't check to see if mentioned yet, but I think another big part of this is the way the RE cycle would coincide with your career. Ready to leave or not, I'd rather take a salary doing questionable things with someone else's money then leave to invest in un-leveragable 3 caps with nowhere to go but down. Obviously it's not that bad everywhere, but the point remains that it's not just about you but the market as well.

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Mar 10, 2017

To your point, in many markets the barrier-to-entry in real estate development is simply too high for budding entrepreneurs (always exceptions, of course).

Also, the current crop of people age 30-34 (a generation of college students) were simply wiped out of the real estate market when they graduated from college and went into other career fields. I'm 32 and there is virtually no one my age in the business that I know of. I'd bet there are historically few (relative to the last 40 years) true real estate entrepreneurs under 40 right now.

Mar 10, 2017

can you discuss specifically what you mean by barriers to entry being too high?

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Mar 10, 2017

Agree with that statement about that age group. There are 23-26 year olds and then 40 year olds.

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Mar 29, 2017

Breaking off by yourself is actually more simple than what it may seem.

But, it depends on how much you have your mind set on being your own boss. Difficult, but simple.

You can start off all types of ways ( I have heard many stories with various starting points) But Networking is king. You have to have relationships in place. You have to have trust in place.

You can start your own shop while working for a company. Save up, buy low, hold, sell high. Become an owner user. Start off with a 4 unit property (easiest because you can get a regular home mortgage for it)Bring that extra cash in, develop it or sell it.

Hell, get cozy with the investors you may meet at the job. Present them an opportunity. BAM! (But it has to be a good opportunity, no one wants any BS.)

You have to just dive in!Without high risk there is no high reward $$$

Mar 29, 2017

I'm not trying to find a "cop out" for why people don't go out on their own--I've done 7 or 8 residential developments myself and, as mentioned above, I co-founded a real estate fintech company in 2016--but I don't think it's particularly easy to get started, at least in many markets. The idea that a person under 30 in my market--D.C.--could organically (without parental help) save enough money to buy a 4-unit residential building (which are extremely rare properties in this market) is kind of laughable. My parents capitalized me and I was able to take advantage of a market at its very bottom in 2009. As far as using other people's money, there is plenty of real estate capital out there with investors wanting to invest, but they want to invest with experienced Sponsors (if you're a talented salesman it definitely helps).

People shouldn't make up excuses for not going out on their own, but the common truth holds for real estate as it does for regular successful entrepreneurs--most people got some sort of special help and/or a lucky break early on to successfully achieve self-employment (I got early help AND a lucky break and I'm still in-between full entrepreneur and 9-5). I'd bet dollars to donuts that the average wealthy 50-70-year-old real estate Sponsor got there because he got into real estate right before a huge run-up in prices.

Mar 29, 2017

Actually, I think you are mostly right. It does depend on your market!

Here in LA, there are a lot of opportunities to buy a 4 unit res(so I was mostly speaking from that perspective). If you are a 30 something, looking to buy your first property, you can use the first time homebuyer route on a 1MM property (3% vs. 20 % dP). Be an owner user, and have the 3 other units paying your mortgage + racking in profits.

That's just one scenario/one route.( I am not saying it is the best either). There is no right way of being an entrepreneur. I have seen plenty of people do it without a parent to help!You have to be calculated, focused, and know what your doing. You can't become experienced without diving in.

If you are in DC, my suggestion would be where are the pockets that NO ONE wants to invest in.

I speak from my own experience. I am getting no parental help, still in school, and I've been able to save up $10k, patiently waiting for a good buy.

The way I see it, there is no cop out, it's either you want to do it or not.

There is always the risk of failing, like any investment.

Mar 29, 2017
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