Patti Robertson talks with us today about switching to a full time real estate investor and quitting your day job. While it is the goal of many real estate investors, the proper steps need to be made, including building up your passive income.



Mike: Welcome to the “We Buy Ugly Houses Show,” where real investors share real stories and lessons from the trenches, where our team buys thousands of investment properties each year. Now let’s meet today’s host.

Patti: Hi. Welcome back to the “We Buy Ugly Houses Show.” I’m your host today. I’m Patti Robertson from Hampton Roads, Virginia. I’m a development agent for HomeVestors. And what we’re going to talk about today is, “Should I keep my day job?” It is the biggest question people have as they’re watching the infomercials and they’re walking into the weekend seminars.
Everybody’s goal seems to be that they want to keep their day job. And I’m here to tell you that if you really are serious about being a real estate investor full-time and making it a retirement vehicle, the last thing you should be thinking about, as a beginner, is quitting your day job.
And the reason for that is this. In order to buy houses, you have to have access to credit and money. It doesn’t necessarily have to be yours, but the better your credit and the better your income, the better the banks like you. There’s all different kinds of ways to buy houses and get access to funds. The cheapest is obviously to use your own money, so if you have cash, you can buy with no cost. The second cheapest way is to buy houses with bank money. Bank money is really cheap, but banks only like to lend to people who have income and credit.
And then there’s private money. That’s borrowing from your friends or family or people that you know. If you’re a HomeVestors franchisee, HomeVestors has money available to us. And the last, most expensive way is to use hard money. That’s typically money that’s lent based on the deal, based on the house, not necessarily using your credit and your income. Although you do usually have to personally guarantee those loans. Those are deal-specific, and it’s the most expensive.
So if you have credit and income, you can buy houses with the cheapest money available, and that gives you a competitive advantage against other investors in your marketplace. It’s become a very competitive marketplace now with the market shifts, and there’s a lot of people investing, and we’re all competing for the same houses. So if you have access to cheaper money, you either can buy the house at the same price as your competitor, but make a higher profit. Or you have the ability of your using cheaper money to pay a little bit more and edge the other guy out. So the better your income, your assets, and your credit, the cheaper your money and the higher your profits.
Now, when you’re looking at your income, that could be either active or passive income. As people are talking about quitting their day jobs or talking about typically that going to the rock pile and going to work every day, if you develop enough passive income, that could be equivalent to a retirement. That’s most people’s goal. Your active income would be things like going to a job, running a business.
Wholesaling and rehabbing houses are active income ways to invest in real estate. It requires your daily time and attention because you have so much at risk. Even landlording, if you are doing it, managing it on your own, would be considered an active investment because on a daily basis, you’re fielding calls from tenants, doing your screening, taking care of your repair items.
As opposed to passive income, which is when your investment makes money on its own and it doesn’t require you to participate daily. Some traditional passive income vehicles would be things like brokerage investments, stocks, bonds, mutual funds, a business you can pay somebody else to run, or even real estate, if you’re paying somebody else to manage it. Most people’s goal is to create more passive income than you have in monthly expenses. Once you do that, only then should you quit your day job. So once you’ve created enough income to replace your day job, that’s a good time to talk about leaving your day job.
My personal, favorite investment strategy is rental properties. When you think about the ability to have it as passive income, what other passive income vehicle could you look at that you could buy, one, at a discounted price, so stocks at McDonald’s. If I wanted to go buy McDonald’s stock today, everybody who buys that stock today is going to pay the same price. I can’t buy it at 70 cents on the dollar, as opposed to a piece of real estate that I can buy at a discounted price. So that’s a big advantage for me.
Second is, when you buy a piece of rental property in today’s market, you can buy it for anywhere, if you’re financing it, from 0% to 20%, 25% down, depending on what kind of financing you’re using. And then the balance of that retirement vehicle, 100% is going to be paid for by your tenant. So what other retirement vehicle is out there, whether you’re looking at stocks, bonds, 401(k)’s, that 100% to 75% of it is going to be paid for by somebody else?
So absolutely make it your goal to quit your day job. Just first get your asset, income, and credit in order, and then we can all be on easy street by quitting our day jobs. Thanks for watching the “We Buy Ugly Houses Show.” This is Patti Robertson. We’ll see you next time.

Mike: Are you looking to get started into real estate investing or take your investing business to the next level? HomeVestors, the “We Buy Ugly Houses” folks, is the number one buyer in America, where our franchisees purchase thousands of houses each year, many of which started with little to no experience. If you’d like to chat, please visit Learn more from the “We Buy Ugly Houses Show,” an amazing HomeVestors team, by watching more shows at or by finding us on iTunes or Stitcher Radio.

Patti Robertson

Patti Robertson

My husband and I joined HomeVestors in 2007 with no prior real estate experience. Soon after I became a licensed agent and eventually a Broker. Today, in addition to operation our HomeVestors business, we own Tidewater Homes, a brokerage that focuses strictly on property management and real estate investing. I have been on the board of the Tidewater Real Estate Investors Group since 2008, where I have served as the President, and am currently a Lifetime Board Member. I am also the founder of the Hampton Roads Landlord Association. I am a Development Agent with HomeVestors and enjoy mentoring and networking with real estate investors to help all our businesses excel.
Patti Robertson

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