MIT 3.0: 4.6 Before You Quit Your Day Job

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MIT 3.0
4.6 Before You Quit Your Day Job
Cheat Sheet

When to Quit Your Day Job
  1. All properties must be in physical and financial order
  2. Physical order
    • Inspect properties every six months 
  3. Financial Order
    • Have six months of business savings
  4. Have a line of credit available or business credit that can handle 6 months of reserves
  5. Have a sound plan of action in place to buy more properties according to your level of aggression
  6. Reduce risk and protect your properties by having umbrella insurance to cover all properties 
  7. Build equity in the property
  8. Maximize the performance of the property
  9. During year one and year two of purchasing the property, do a cash-out refinance to tap into the equity
  10. Aggressively pay down debt service with the cash flow
  11. Consider selling some of the equity in the property 
  12. Consider selling some of the properties you acquired that 
    • Cash flow at a minimum (below $100/door/month)
    • Deferred maintenance
    • Undesirable tenants
    • No longer have a desire to be a real estate investor
Personal House in Order
  1. Keep your debt to credit ratio below 30%
  2. Document the bare minimum expenses you need to get by
    • Have 6 months of personal savings in your bank account
  3. It’s a good idea to get your health checked 
    • Consider getting a physical
    • Consider visiting an eye doctor
    • Consider scheduling a dentist appointment
  4. Look into getting self-employed/private health insurance coverage after your employer health insurance coverage expires
  5. Reach out to a retirement investment company to see what your options are regarding your retirement accounts
  6. Convert into another type of investment or retirement account
    • Cash it out and pay taxes and penalties
  7. Discuss with your mortgage broker what’s needed to qualify for mortgages personally or with partners even after you quit your day job
  8. Document any losses on your tax return, but it’s better if you show that you’ve made a profit instead assuming you intend to buy additional properties with you qualifying for a mortgage
  9. Use passive income and earned income as a two-prong approach
  10. Passive income affords you your lifestyle
  11. Earned income affords you to give back
  12. Continue to hone your skills and go further than the training that’s available to you in the Multi-unit Income Training
    • Learn new real estate laws
    • Keep up with industry trends
    • Find out what’s going on in the market you’ve invested in 
  13. Turn in your original resignation letter 
    • Confront your fears and share them with your accountability partners
    • Let everyone in your circle know that you’ve quit your day job
    • This may attract more investors and private money
  14. Play a bigger game – start a new business
    • New construction
    • Hotels
    • AirBNBs
    • Other
  15. Discover your passions, your purpose, the next business venture you want to do

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