Do you think you have what it takes to become an entrepreneur? For many people being self-employed feels like reaching the top of the mountain. There is the ability to create your own schedule, work from home and you no longer have a boss breathing down their neck. As great as this scenario may be it is not for everyone. It takes a certain discipline and mentality to work in isolation. Even if you have a business partner it is a far difficult culture and atmosphere than working in corporate America. You may have a passion for real estate but it may not be enough to run a successful business. Before you take the leap to self-employment there are a few things you need to know. Here are five areas every prospective self-employed investor must recognize.
- Discipline Is A Must. Being your own boss means you don’t have to be in the office by 8:00. You can sleep in a few extra minutes and avoid the morning commute. On the surface this sounds great but you can’t let it become a habit. You still need to develop and refine your daily schedule. Sleeping in one day a week can quickly turn into two and the next thing you know you start every day an hour or two later. This is lost production time that can completely impact your business. With nobody screaming in your ear and pushing you to work harder there are times when you can let your guard down. Working for yourself means you need to stay disciplined at all times. There will always be the temptation to sleep in or put tasks off until you really feel like it. Even the most motivated investors struggle with discipline until they establish a routine.
- There Are Expenses. Even if you work out of your house there are plenty of hidden business expenses. Start with your technology. If you work out of the house it is a must that you stay on top of today’s technology. This means getting an updated computer, phone, tablet and whatever else you need. You also need to have the ability to run an office from your living room. This means having a printer, paper and extra cartridges on hand at all times. Another hidden expense is health care and insurance. If you left your office job to become an investor your insurance coverage was one of the tradeoffs. You won’t feel this until you get sick or something happens. Finally, there are also a series of expenses in generating and securing deals. Between marketing, title searches, inspections and other due diligence the costs of doing business can get away from you quickly. Before you decide to work for yourself you need to have a little bit of a nest egg to fall back on in the event of an emergency.
- Embrace Isolation. As a real estate investor you will do many tasks by yourself. A good amount of your due diligence is done in isolation. Gone are the Monday mornings where you can huddle around the water cooler and talk about the previous day’s football games. There won’t be anywhere to go if you want to take a break and talk to a co-worker. For some people they are much more efficient without all of the distractions. For others this is a big adjustment that they need to get used to. You are not going to spend every waking minute of every day alone but you very easily can spend an entire morning. This underscores the importance of discipline and need for self-motivation. Even though real estate investing requires a good team you need to prepare yourself to work in isolation.
- You Are The CEO Of Everything. As a real estate investor you are in control of everything. You are the one that makes all of the decisions and decides which way you want things to go. For some people this can be a very overwhelming task. Not everyone has the ability to make decisions without looking back. Even if you do get used to this you also need to become an expert on every area of your business. As you are just starting out you need to know about marketing, lead generation, deal evaluation, networking and much more. There will be nobody to pass these off to. If the phone rings you are the only one that is going to answer it. You can’t have an off day or take your frustrations out on an incoming call. You have to take time every day to learn about a different aspect of your business. Until your business grows you are the CEO of everything.
- Different Pay Structure. Perhaps the most difficult adjustment for anyone newly self-employed is the manner in which you get paid. Gone is the consistency of waking up every two weeks with a set amount in your bank account. Some new investors embrace the ability to create their own income while others like the assurance a steady paycheck. Making the leap to full time self-employed investor means that you may go several weeks, or longer, between closings. When you do have a closing you need to have the ability to spread that out for however long it takes until the next one. You also need to save some of your profits for when Uncle Sam comes calling.
Working for yourself can be one of the greatest joys in life but only if you know what to expect. As a real estate investor you need to embrace the fact that you self-employed and everything that it entails.