Don’t Quit Your Day Job, yet.
Ultimately, obtaining time freedom is the goal for many Real Estate Investors. Many despise the monotonous struggle of living in a W-2 world–clocking in and out, working 40+ hours for someone else, getting permission to go on 2 weeks of vacation for the entire year. The list goes on and on, but hear me out, keeping your W-2 while investing in real estate has its benefits. Below is a list of benefits of why you should remain a W-2 employee for as long as possible.
Easier To Obtain Loans. Underwriters love predictability and showing a steady income allows you to get a decent rate on a 30 year loan on your asset. There are other options such as a DSCR loan, but the rate you are able to get conventionally is a big difference compared to a DSCR loan.
Multiple Streams of Income. Having a steady W2 income and income from your assets allows you to scale faster and put more money into reserves. After a few years, your income will begin to snowball and the dream of leaving your W2 becomes a reality
W2 Benefits. A huge plus of having an employer is cheaper health insurance and the ability to contribute to a 401k (or 403b). I remember looking into paying for my own health coverage for my family and it was 3x more—which is insane! Another benefit is having the option of contributing towards your 401k and most employers will match up to a certain percentage. Many REI are against contributing to your 401k and would rather use that towards REI, but I’ll leave that debate for another day.
Using your W2 superpowers in the REI world. Whether you love or hate your job, you have a superpower that you use at your job and it can go a long way in the REI world. I personally live in excel, work with data and have managed projects. So guess what? You guessed it, I have spreadsheets on spreadsheets that can underwrite deals, tracking income/expenses etc.