Have some money but no job now...what to do? - Posted by John

Posted by Gavin Wilkinson on September 22, 2004 at 12:46:38:

I have the same kind of problem.

When I am working, I have lots of money and cash flow, and banks are happy to make me a loan. But I have no time to do fix ups, or attend auctions/foreclosure sales which are held during business hours. Very few bosses agree with “There’s an auction today so I’m closing the store!” Yes, it is possible to pursue real estate investments, but its harder and things seem to go very slowly.

Then if I quit my job, I have lots of time to attend to my investments, but the banks don’t like to lend to me. They calculate my cash flow, and I don’t meet their criteria. I can show them sucessful deals, but they are not interested.

You can go with hard money loans, but then you are mostly working for the lender. When you pay 12% plus 4 points, any deal has more risk and less payoff. You can only go for amazingly good deals with 40%+ payoffs but then they are very hard to find, and you may wait years while you are looking.

I have had some successs with owner carried properties, because they don’t care as much about ratios, as long as you have some down payment.

I guess the best thing is to have enough liquid capital to do deals. 300k to 400k in the bank.

Have some money but no job now…what to do? - Posted by John

Posted by John on September 22, 2004 at 11:59:39:

Hi there,

I just recently lost my job and I’m now wondering what to do? Fortunately, I’ve managed to save up some money from my first real estate deal that netted $62,000. Between that, my savings, credit cards and a HELOC, I have over $100,000 to do some real estate investing with.

After being laid-off and recently dismissed from corporate jobs, I’m debating if it’s worth going back. I know, the steady income is nice until you’ve build up enough cash flow, but I just don’t think I’m ready to go back just yet.

Any suggestions on what to do? I live in Denver and the rental is pretty soft, so buying and holding won’t get me positive cash flow. I’m thinking that finding rehabs with some equity or doing short sales with foreclosures is my best alternative to start generating quick cash. What would you do?

Any thoughts would be appreciated.


Re: Have some money but no job now…what to do? - Posted by Devon

Posted by Devon on September 22, 2004 at 16:10:00:

I am in DC but licensed in CO… you can do a No Doc deal… most require about 10% down. That is where you do not verify income, assets or employment. THat is getting around the no job thing. Shoot me an email if you want some more information or to give me more details on your situation. Thanks,

Re: Have some money but no job now…what to do? - Posted by Jim FL

Posted by Jim FL on September 22, 2004 at 13:49:54:

I feel your pain.
Working for someone else? Yikes!
Not my idea of a good time at all.
But, sometimes, for some folks, it is indeed a good idea.
With your situation, frankly, we can all share some great ideas on how to invest, what techniques to use, etc. to best maximize your cash on hand.
The thing is, you, and only you can decide whether you have ‘enough’ to feel comfortable and not have a steady income.
The other thing to really consider is making a plan.
Where do you want to be in 3 months, a year, or perhaps more?
What level of income do you need to replace?
Are you willing perhaps to live below your means to help facilitate your plan?

I have no idea what kind of numbers you need to achieve to make a ‘decent living’ in your mind.
So, perhaps share with us what you want to accomplish, and perhaps we can help you hash out a plan, or at least answer questions about the details of it, and whether we know they work or not.

I personally quit my job some years ago and dove in head first full time REI.
I had to force myself this way, because having a solid paycheck to rely on, made me lazy in my pursuit of REI.
This is NOT a road I’d advocate to anyone, because it was HARD and LONG, with plenty of ups and downs.
Well worth the journey mind you, but not something I’d do again either.
Rather than just live off of savings, which I also did for a while after a couple deals and quitting the J.O.B., I realized that security blanket would not last forever either.
So, cashflow was the focus, along with building reserves.
I’d concentrate on day to day expenses, and how to get them covered first.
With your cash on hand, you don’t need to use it all to buy properties.
I’d invest in education at first, if you have not already, and perhaps more reading materials even if you have.
After that, work on your plan, and focus it on cashflow and large cahs injections as well.
I personally love to market hard for sellers, and buy houses using terms, with plenty of equity in them.
Because you have cash, a few bucks to sellers to move should buy you substantial equity.
After you have those properties, since you said your rental market is slow, then don’t rent to hold.
Instead, sell carrying paper.
This gets you down money to replace what you spent to get in, and hopefully make your nest egg grow, and cashflow, to replace that paycheck income over time.
Life is MUCH easier when your cash needs are met monthly, with ease.

Anyway, that’s my two cents anyway, and please, don’t rule out working a job as well.
Even something for less pay and perhaps part time would help the reserve cash you have last longer, or go towards more deals.

Good luck,
Jim FL