Real Estate Side Hustles
I'm mid 20s, working at a REPE Fund, making about $125k base + a bonus of the same amount or larger, but I'm spending essentially the entirety of my base throughout the year (after 401k) and banking the entire bonus. So technically, my savings rate is fine, but I'm a little annoyed that I can't spend more money on fun. After rent, I have like $3k of spending money (for groceries, clothes, travel, etc) before I start spending more than my base.
It would be nice to have like ~$1k of extra after-tax money per month that I can spend stress free. I live in NYC/SF/LA, so it's hard to reduce my cost of living without making a big sacrifice (eg moving in with roommates or moving to a less desirable part of town).
My thinking is I should get a side hustle that makes me some "fun money".
Has anyone experimented with selling the occasional house, acting as a leasing broker, leasing apartments, etc. as a part time gig? Even if I sold just one house or condo, that would be enough to hit the $1k per month mark. Are there RE consulting gigs I could take that make me reasonable money? Maybe an all-cash job like bartending (I hear on busy nights you can make $1k in tips)?
Does anyone have any ideas or experience with this?
No one is going to hire you to be a bartender 2 nights a week unless you're some bartending world super star...
Thought about this too and a few years older than you. I've been investing into VC funds through syndication type LLCs with friends - club deal type of stuff. Brokering is tougher than you think - takes tons of time and energy.
Best way to make "fun" money is through something that you're truly interested in or is one of your hobbies. I have a friend who dances salsa professionally and she teaches that, for fun. Also thought about RE consulting gigs on task rabbit and stuff, but in order to get business on there - you'd have to disclose where you work (assuming a well known firm) which then makes it all public and could may be come back to bite me in the ass if I use company resources (CoStar/GreenStreet/etc...) to make this money.
Dog walking, may be?
Not a lot of solid options and it all comes down to making the bonuses and non-daily spending money work for me, unfortunately
If you have enough cash, REITs dividends will offer you that extra 1k/month at relatively good risk-adjusted returns...at 2.5%-3% dividend, you'll need 500k or so to get that extra money, which many of us RE folks with family money may have available.
All good thoughts. I’m not looking for investment income - solely for additional cash income that will be spent and not invested. My investments are doing fine (although today was an ugly red day).
Even if bonus comes out to $175k this year, I just have mental block around spending that money. But if I get a windfall, like from selling someone’s condo, I’d be psyched to spend that on a nice vacation. I wish I wasn’t such a miser
Idk, I think I may need to rewire my brain around bonuses. Or just bite the bullet and not live in a fancy neighborhood.
Is $175k your potential bonus or potential total comp?
If you’re in your mid twenties brining in a $175k bonus on top of a $125k base salary, you should honestly just treat yourself and siphon $20-25k into your checking account each year to spend on things that you want. Life doesn’t have to be this all-or-nothing thing where you either save everything or spend it all. Unless you’re super passionate about the side hustle, and assuming you’re adequately saving & investing the rest of your money, you deserve to treat yourself to some of that bonus that you earned.
Another friend of mine is a big wine guy. He often scour the wine bidding websites and pick up a case of 12 bottles of something a steep discount. Drink/keep 2-3 of the 12 for himself. Sell the remaining for profit - these are DRCs type stuff so selling 10 of them will rake in couple grands for you. Win-win, you get to drink fine wine and make some money in the process. Just another example of hobbies that could make you some buck.
Not sure what your financial situation/background is, but chillax on the saving. Spend the bonus on a nice trip or two a year man. Live a little.
I'm not going to argue on spending habits, but at some point, you need to think of your total comp as one. Finance is a different industry where you can't go with the usual "spend your salary, save your bonus." Yes, it works as an analyst, but as you get more senior, your salary doesn't really grow. Plenty of folks making 750k all in with 150k base and 600k bonus
Check out Bullpen. It’s a real estate freelance job network. I haven’t done any work on Bullpen, but receive the email job blasts. Looks like there are some 10-15 hour/week gigs.
Interesting. Some of the hourly rates are good. But I have to report my outside income and worry that it would make me look bad to leadership (basically doing the same job but for someone else)
You have to report it to your employer or for tax purposes? Does it get back to your employer after you report to IRS?
I keep a separate bank account with “fun money” and plan to restock that every year. I don’t count this in any net worth calculation and consider it spent once I allocate it from my bonus. Then over the course of the year I use this money for random things - buying new clothes, weekend trips, big dinners. You sound like me mentally and it was hard for me to not allocate a good chunk of my bonus to saving but like the other guy said you are only young once and the value of spending money on experiences and fun in your 20’s is worth a lot more than the marginal ROI you’ll get by having that $10-20k invested over the course of the next 20-30 years.
I also hate the idea of spending more than my base, so I found this method to be a good balance. Anytime I incur a significant “fun” expense I’ll just pay down my CC in that amount immediately (from the fun money account) so it’s like it never happened and your monthly cash flow doesn’t hurt. Works well for me. Just trying to pace myself so I don’t run out before the end of the year lol
You should check out this book called Die with Zero by Bill Perkins. I think it will help put things in perspective a bit.
Thanks, just ordered the book
This guy was just on James Altuchar's podcast, had some really good insight.
Had some good points regarding doing certain things at your life at certain points. Another way to put it is like Warren Buffet says, It's Like 'Saving Up Sex for Your Old Age. It Just Doesn't Make a Lot of Sense.
Yeesh.. if you're making $250k at 25ish, just spend some of your bonus. It's not that big of a deal man, live a little. You're making more $ than most people ever do.
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I’m in a similar position looking for a side hustle and I am a CRE banker. If you want to brainstorm ideas anytime, I am down anytime to collaborate and we can combine our resources and skill sets. PM me to discuss if you are interested.
Similar to the dog-walking comment above, a friend of mine also dog sits through the Rover app. She'll do it like once every two weeks or so, depending on her schedule. It's super flexible and she's now making enough to pay for like 80% of her weekly expenses. She's at the point where she gets repeat business from people and they pay her through Venmo vs. through the app, so she's able to keep more $$$. Downsides are that you need to do it for a couple of months to build your clientele and get repeat business, need to have an apt building/house that's dog friendly, and you have to be committed to staying with the dog for that set time (ex. She can't go out with us on weekends sometimes because she can't leave a dog alone in her apartment, even for a few hours).
Ask yourself this question, what do you need an extra $1k for a month that you're willing to give up time up? Meaning, what would you spend it on and what is it getting you. Maybe one more trip, a couple pairs of sneakers?
Numbers wise, if you have a $125K bonus, that's probably conservatively $75k take home, even if you take $12k out of that for each month, you're still saving Over $60K a year. Depending on what your goals are, that's a pretty good amount and will grow over time (not to mention 401K savings).
I probably wouldn't give this advice to people not on a financial site, but I heard a state the other day that said 6 out of 7 people in retirement actually don't touch their principle. We have been on a historic stock run, and I know inflation is a thing, but ultimately (don't come back to this if you spend wildly), you should be okay financially.
I second the idea of pursuing something you actually find interesting. If you're pulling that comp, you're likely working 60+ hour weeks consistently and last thing you want to be doing is excel consulting work or grinding out dog walks.
Videography is of my hobbies and I've turned it into a full side business netting $150/hr on my projects. Its low stress and I genuinely enjoy doing it.
It may take some time to get up and running, but 1k/mo post tax isn’t that hard running a small hobby-based business.
I can't afford CoStar and would pay for one-off sales comp reports, though wouldn't want you getting in trouble hah. (If anyone can do this please message me!)
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