Jack Miller gives his opinion on leaving your job and becoming a full time real estate investor. What has he seen over the years:
“How you doing? This is Jack Miller. I hope you’re having a really fantastic day. I wanted to make this video – a question I get all the time – and this really bugs me. I’ve worked at— Gelt Financials, worked with literally, I can’t even tell you how many thousands of good, hard, honest working people who want to be real estate investors. And the common theme that I see with them is they grow too fast, and they want to do too many things at once.
So, I wanted to make this video and I’m going to label it: ‘Should I become a real estate investor full-time?’ Okay, very simple. A lot of people have jobs and they come to us, and they want to do A, B, and C. They have this huge appetite, like sort of like me at a buffet, you know? Everything looks good. But you know what happens when you go to a buffet, and you start to eat a lot? So, your stomach doesn’t feel good. Too much, too soon, or after too much, long too – can’t even speak already – your stomach doesn’t feel good after you’re there for a little bit because you eat too much.
So, you know, think long and hard before you say you want to become a real estate investor full-time. You know what I see? It’s more people, and I use this expression all the time, and I tell people all the time – a lot of them don’t listen – but I tell them, is I’ve seen more real estate investors die from indigestion than starvation. And if you think about it in two – we’re in 2021 – very few people are, and very few people are dying from starvation today throughout the world, throughout the country.
We’re lucky; we live in a country that’s most of it is abundant with food. I realize there’s certain food impoverished people, food deserts, but there’s generally plenty of food in the world today. And I see more people and more businesses die of indigestion and starvation, which means they’re overeating; they’re doing too many deals. Now you say, ‘How can you do too many deals?’ because it takes time to digest it. You know, I see investors come to us all the time with these fantastic business plans, this great energy, and great naivete – there’s something really special about it. And I don’t want to discourage you, but I would caution anyone who wants to be an investor full-time to do it, to think about their plans. And I don’t want to say no, but I’m effectively saying no. It takes a lot to be an investor full-time. First of all, you need a tremendous amount of resources. Things don’t always go right; in fact, things usually go wrong. And when things go wrong, they don’t go wrong with one or two things – they go wrong with five or six things. And there’s always issues, the unforeseen issues that you just don’t know about. So, no matter how anything looks on a spreadsheet or on your plans, I would urge extreme caution on being a full-time investor.
The reality is there are really two types of investors: there’s buy and hold investors and fix and flip investors. It’s very difficult to buy and hold and make any sort of cash flow today – really hard, really hard. The economics just are tough to work. And how many properties do you really need to support yourself full-time? Because what happens is, once you do that you become full-time, then you start taking valuable cash away from the properties, away from the reserve, away from capital improvements. And you start spending that money, and that’s not good.
And the fix and flip investors, the same thing. Very hard to fix and flip a property; it sounds easy, and today is an unbelievable market. It’s just like, you know, everyone’s a hero in today’s market. But the reality is the market is making a lot of people heroes over a long sustainable time. It’s very hard to go from nothing to a fix and flip investor full-time. You know, a lot of deals, and it just sucks up capital.
So, my advice to you would be to start slow. Everyone wants to jump into it, and there’s all these gurus out there – and I don’t mean to talk negatively about them – who are telling you, ‘Oh, you can make so much money, and you can do this, and you can do that.’ The reality is, some of them you can, but I also see a tremendous amount of them blow up.
Nobody goes and puts infomercials out there on the investors who blow up, and really, their credits impair, they lose their homes, sometimes they have divorce, all kinds of horrible things because they’re doing too much.
So, be very, very careful. No one’s publicizing those. I can’t express how careful you should be when investing in real estate. Look, for me, it’s been my life’s love, and I’ve been able to support three kids on it and a wife, and have a family on it, and it’s been great for me. But that’s happened over a 40-year career, okay? It doesn’t happen overnight.
So, I would urge extreme caution when you are jumping off the boat, so to speak, or jumping off the dock and taking the plunge and becoming a full-time real estate investor. No matter what angle you have, I know I’ve heard the angle that dealt with people – ‘Oh, I’m wholesaling, I’m doing this, I’m doing that, I have this safety net, I have that safety net.’ The reality is, 90% of the time, it does not work right away to do it full time.
Now, however, build up to it. Start with one thing today. Don’t look to conquer all of, you know, North America in one day. Start buying one property, whether you’re flipping it or you’re holding it, whatever it is. Take a long-term approach toward these things. Buy something today. Get that deal done, digest it, build up some savings, and then buy another, and then buy another, and then buy another. And before you know it, it’ll happen – you’ll be able to sustain yourself full-time. But it’s going to take time. Don’t think it’s going to happen right away. It doesn’t. It doesn’t even – you know, I know a guy recently, and his parents or his father just gave him a hundred thousand dollars so he can do this. And he came to me, and he says, ‘Oh, I have all this money, and I’m going to be able to do it.’ And you know what? He can’t do it. It’s nine months later, and he’ll be fine, but his dream is not becoming a reality because it’s too compressed in time. Real estate is a process, and the markets happen. You know, all – there’s always something that happens that goes wrong.
So, again, don’t think – I’m not encouraging people to get in real estate; I’m encouraging people to invest in real estate. But I’m telling you, if the answer is, ‘Should I become a full-time real estate investor?’ I would urge extreme caution. Again, now, again, if you just sold the business and you’re 50 years old and you have five million dollars in the bank, it’s a different story. But I’m talking about somebody who needs to earn a living at it, because you’re not going to be earning a living at it doing it right away. It’s very, very, very difficult. Very difficult. Very difficult. And the people who do, you’ll find out when you look at their balance sheet. And I see this all the time – they have no… their credit’s bad; they have no cash. They’re very braggadocious – ‘I have 10 properties. I just bought 10 properties. I bought them all in the last year.’ And 90% of those people, they’re a financial disaster.
So, take it, take it slow. Do it, take it slow. Enjoy yourself through the process. It’s a fantastic journey but take it slow and don’t be in a rush. Anyway, I feel bad making these – I don’t say depressing, but these downer videos. But I’ve just seen so many people get hurt by doing it too quick, too fast, too quick. So, my lesson, my comment to you is take it slow; on the question of, ‘Should I be a real estate agent, or should I be – not an agent, I’m sorry – an investor full-time or part-time?
Anyway, if you like the video, check ‘like’. If you want to hear more of them, hit the bell or the buzzer. You’ll be notified when we post more. Leave your comments. I’m interested in an active debate. You know, when I post these videos, this is my opinion. That doesn’t make me right – I’m wrong on plenty of issues. You know, everyone around me tells me that. So, this is just my opinion, and some people can make it, but I’m talking in general. So, leave your comments. I’m really interested in hearing them. Anyway, have a fantastic day – that’s the most important thing. Life is short; we sometimes all forget that. And check us out at geltfinancial.com and take care and have a wonderful day.”
Category: Borrowers
