FIRE'd: The "FI" part is great, the "RE" part not so much for me anymore

[Snidely Whiplash]

I respect a lot of the advice and opinions I see posted to the board so I was hopeful someone here might be able to help me solve my quandary.

Background: Several years ago I worked for a municipality and, recognizing that the retirement plan would not support my wife and I to our satisfaction in retirement, I began buying multifamily apartment buildings. The price to return of the properties was exceptional at the time and things snowballed to the point where I left my job with the municipality to manage our portfolio of rental units. Through a combination of negative factors (meaning I got my fill of tenants, excessive regulations, etc.) in 2007 I liquidated the property portfolio and have since redeployed assets into individual stocks. Dividends, some rental income, and a bit of stock trading provides a relatively steady income of an amount that adequately covers our family’s current standard of living, which we are very satisfied with.

Most people I expect would be fairly happy with my current circumstances but I am struggling with it. The catch to all of this: I have an entrepreneurial itch that wont go away, but cant think of an endeavor or business that I could buy or start given my limited skill-set. I consider myself fairly competent, I am honest and willing to work hard, am pretty proficient in general computer skills, and have some skills that I acquired with managing the properties (budgeting, cash flow management, property / job cost analysis and profit potential, collections, quality control assurance, and payroll functions). Aside from enjoying RV travel I have no hobbies that could be converted to a business endeavor. Currently 45 years old and living in the MidAtlantic area but am willing to relocate for the right opportunity... or better weather.

I have been keeping my eyes open for a multifamily property but current interest rates have kept multifamily properties priced pretty high, and I don't see anywhere for interest rates to go but up, and consequently, multifamily prices to decline, so unless it was a red-hot cant-miss deal, I will probably bide my time waiting for a price decline. Acquiring some single family homes is one option but I’d really like to do something more purely entrepreneurial focused - a business of some kind that I could start / manage and grow. I would derive a lot of satisfaction from managing a profitable business which employs people at a decent living wage with benefits but I cant come up with an idea for a type of business that would equate to. And for the life of me I cant think of any possibilities (manufacturing of some kind maybe, but of what?). Having been FIRE’d since 2007 has been a mixed blessing; I feel disconnected from the general economy somewhat and haven't been out and about to recognize business opportunities. I have even considered taking a job just to get my toes back in the water but having not worked for anyone for better than 15 years that idea is not entirely appealing.

So, I guess I am asking for help from those of you who may have been successful in the business world as to how you would suggest I proceed?
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[Animorph]

Have you looked at franchising? While it never seemed like a great way to get rich, it should be a fairly self-supporting way to occupy your time and shouldn't require any special skills beyond what you have. Plenty of interesting options I'm sure.

[modhatter]

There are a lot of existing business that you can buy. People, such as myself run a business for years, but then reach a time when they want to retire and not have to deal with it anymore. You can make a stipulation with the business that you buy that the current owner must work with you for six months to a year (sometime even shorter) depending on the business, to teach you the ropes. You don't have to know anything about the business necessarily. You will learn quick enough if you have a good head on your shoulders.

If you have natural business skills and a good head on your shoulder, you can run just about any business, once you learn the basics of the field.
I as an example, opened a chain of low cost hair cutting stores back in 1982 located inside malls. I did not know a thing about hair cutting, (but you don't need to cut hair to run the business). Actually, from my experience over the last 30 yrs., I can say that there were probably only two stylists who were capable of running a store. The thing that attracted me to the business is that it is known as "an absent owner business". In other words, once you get it going and have the system down, you don't have to be there everyday. You can manage from home, with good managers in place. This is not to say that you never have to go there to check on things. You do, but it is not a 9-5 deal. More like three days a month will do.

The business doesn't have to show a great profit necessarily, as long as it shows a small profit, chances are if you are smart you can go in and turn it around to start making much larger profits.

So, though it helps to know about the field ahead of time, it is not an absolute necessity. If there are good people in place, you keep them, and as you learn the business, you can replace those that aren't and start making your own improvements to the business to make it grow.

Contact a few business brokers, and see what they have. That's a good start.

[daylatedollarshort]

If you are FI, you have the luxury of time to try different careers or businesses out and see what you enjoy. You can also get a job, even if you don't need one, to learn about a business first from the inside before you invest a lot of money. Or go back to school and see what kinds of classes you like. I went back to school, built up a portfolio of volunteer and hobby work and got contract work from that. I also ruled out a few careers that just weren't for me.

It sounds like real estate is your general focus. What about a property management or realty company? Becoming a buyer's realtor? Home inspection business? If you don't want to buy property in an over-heated market, then maybe you could have a support type business still focused around real estate.

[Meadbh]

Quote:

Originally Posted by daylatedollarshort It sounds like real estate is your general focus. What about a property management or realty company? Becoming a buyer's realtor? Home inspection business? If you don't want to buy property in an over-heated market, then maybe you could have a support type business still focused around real estate.

+1
One of my retired friends has become a qualified home inspector. He operates an agency franchise. He doesn't make a huge amount of money, but as a self employed businessman, he can write off the cost of his truck and other related expenses.

[daylatedollarshort]

One of the Millionaire Next Door authors has a blog post about how to go about starting your own real estate related business, with tips like the one below -

"There are several categories in real estate that rank in the top 20 among America's most profitable businesses as well as in terms of the probability of success. These include: real estate property management (average profit margin, 39.8%; 86.1% make a profit) from apartments to shopping centers, real estate brokering agency services both in residential and commercial real estate, and real estate operators and lessors of buildings. You may also consider working for a real estate investment organization."

The Millionaire Next Door Swims with the Economic Tide

These are my own thoughts, but thinking ahead, we have at least one generation, and probably more to follow, with, on average, very little retirement savings and few pensions. They are still going to have to live somewhere. Where can people live on Social Security checks, and for some, not much else? From a business standpoint, does that mean a future in low cost senior housing, manufactured housing, mobile homes, tiny houses, or backyard cottages?

[pb4uski]

Reading your post, I wonder if you might have the skills to enjoy buying residential fixer-upper houses, sprucing them up, perhaps renting them for a short time so you have owned them for over a year to get LTCG treatment and then selling them.

[explanade]

I know people who've done well with investing in apt. Buildings. But it is a lot of work and can be. PITA to deal with some tenants.

Of course you can have property mgt. but that cuts into income.

Then there are potential liabilities, like being sued for BS illnesses from mold, with people who had no economic prospects demanding huge sums for some conditions supposedly caused by living in the dwellings.

[Snidely Whiplash]

So much excellent advice and suggestions, I wanted to express my gratitude and appreciation to everyone for taking the time to post. I knew my trust in this forum was well deserved.

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Originally Posted by Animorph Have you looked at franchising?

I'm embarrassed to admit that I had not even considered that. Thank you for the suggestion. Looks like I'll be spending some time this evening researching franchise opportunities. Thanks again.

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Originally Posted by modhatter There are a lot of existing business that you can buy. People, such as myself run a business for years, but then reach a time when they want to retire and not have to deal with it anymore.

That's exactly what I need! An older person with a successful / profitable business that has no heirs and is looking to retire. Any insight into tracking them down? Do they really mostly employ a business broker?

Quote:

Originally Posted by modhatter If you have natural business skills and a good head on your shoulder, you can run just about any business, once you learn the basics of the field. I as an example, opened a chain of low cost hair cutting stores back in 1982 located inside malls. The business doesn't have to show a great profit necessarily, as long as it shows a small profit, chances are if you are smart you can go in and turn it around to start making much larger profits.

Thank you for that advice, and for having posted your example. Very encouraging and I'm appreciative you took the time to do it. I agree with what your saying, and as crazy as it sounds, at one point I actually set down with a telephone book (took some time to find one) and made a list of all the yellow pages businesses I thought might fit the bill for me. I'm pretty comfortable with my general business skills and management ability... even more so on Tuesdays when I watch "The Profit" and wonder how some people can get so far ahead with so few skills.

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Originally Posted by modhatter Contact a few business brokers, and see what they have. That's a good start.

I have followed up on several businesses on bizbuysell.com. Most that I have received information for have been a good bit different from what was initially represented.

I could give plenty of examples but the most obvious one was the gas station I inquired of. Owner and broker claimed it was a legitimate cash cow and the owner was basically absentee. I asked point blank prior to travelling to look at the business about the owner or other family member's time involvement (concerned with off the books salary costs etc.) and was assured only the owner had any time at the business and that was very little. On my first night in town I stopped at the station for fuel and found out the next day that the attendant the previous night was the owner's son. He clearly didn't recognize me from the night before as they went on at length about his never being at the station.

Very frustrating. I'm an up-front person. I'm willing to pay a fair price. I just want to know the truth about the business and its workings.

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Originally Posted by daylatedollarshort If you are FI, you have the luxury of time to try different careers or businesses out and see what you enjoy. You can also get a job, even if you don't need one, to learn about a business first from the inside before you invest a lot of money. Or go back to school and see what kinds of classes you like.

I am very blessed and fortunate to be in the position I am, that is very true. Going back to school is also an option I have considered.

Quote:

Originally Posted by daylatedollarshort It sounds like real estate is your general focus. What about a property management or realty company? Becoming a buyer's realtor? Home inspection business? If you don't want to buy property in an over-heated market, then maybe you could have a support type business still focused around real estate.

Real estate has been very good to me. I will more than likely be involved with real estate investing again when prices are more attractive on multifamily properties. I just don't know how long into the future that might be.

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Originally Posted by Meadbh He doesn't make a huge amount of money, but as a self employed businessman, he can write off the cost of his truck and other related expenses.

I never made a killing in cash flow from rental properties. They provided very good cash flow, but the tax benefits were where I made out really well. I never planned for it, but depreciation made most of my cash flow tax free. That was a good place to be.

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Originally Posted by daylatedollarshort One of the Millionaire Next Door authors has a blog post about how to go about starting your own real estate related business, with tips like the one below...

I was not familiar with that blog. Thank you for posting the link. I'll be spending some time over the next few days catching up on that one. I loved the Millionaire Next Door; I'm surprised I haven't come across the blog on my own before now. Thanks again.

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Originally Posted by pb4uski Reading your post, I wonder if you might have the skills to enjoy buying residential fixer-upper houses, sprucing them up, perhaps renting them for a short time so you have owned them for over a year to get LTCG treatment and then selling them.

You are right. When I mentioned the single family home thing in my original post the rehabs coupled with some longer term hold properties was what I had in mind. That is kinda my fall-back fail-safe position if nothing else works out. I think your suggestion, given my background and experience, was right on the money. Thanks.
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[chasesfish]

I just picked up on this thread - be very careful on franchises and businesses sold through a business broker. Most are just selling you a job. This is coming from a banker that sees financials every day on small businesses. Don't go near a gas station or non-food retail. The only franchises that make sense to me are stand alone fast food where you get to own the real estate, or top tier flag hotels (can't get their reservation system or name without the franchise).


Have you considered talking to a few of the local RV dealers to see if there's something in their business that interests you? Sales/service? What about a real estate broker selling residential rentals? Your ability to obtain FI sounds like the main reason you got out of that game.

[brewer12345]

How about buying a fixer-upper RV park? You RV, so you understand the customer. You are handy, so you could do a fair bit of the maintenance and possibly upgrades. You like real estate, and this is definitely that.

[daylatedollarshort]

One thing to keep in mind if you are FI is whether or not you might want to travel or live abroad. Most real estate businesses are going to be geographically dependent, while digital nomad type work might allow you to live anywhere in the world, as long as working is allowed under the visa or residency rules of the country you intend to live in.

[haha]

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Originally Posted by Snidely Whiplash Very frustrating. I'm an up-front person. I'm willing to pay a fair price. I just want to know the truth about the business and its workings.

Dealing with brokers and business opportunity sellers will convince you that a virus came through and destroyed the part of their brains that perceives truth.

If you are truly Ok financially, manage your investments and save a lot of trouble and avoid some risk.

If you are not, get a day job and go to law school at night. Or cheaper and more certain, become a nurse if you have the personality for it.

Ha

[Ronstar]

I sold my ownership in my business, but still a partner in 3 florida rentals. Not easy being a long distance landlord/ real estate owner.

I understand your desire to have some kind of business. I get the same bug now and then. Next time around I'm looking to build a self storage facility. Low maintenance and doesn't look like much work. For retirees, i think its best to get into a small business that's not going to rule ones' life.

[Newventurer]

I have a friend that is in the process of buying a couple of touch less car washes. No employees, cash business, says he can pretty much run it from home with security cameras monitoring supply levels and overall condition of facility.

[pb4uski]

One of the good things about rehabs is that they are mostly project oriented so you would have certain periods where you will "work" but others where you are "off" (other than perhaps property management) so you can somewhat manage your time if you plan to travel or do other things. The problem with most small businesses is that it is hard to get away, particularly retail oriented businesses.

[daylatedollarshort]

I have always liked having bleeding edge tech skills. If you learn some software or programming language that has only been around two years or at least only wildly popular for two years, then you aren't competing with people who have ten years experience in it and the colleges probably haven't had a chance to develop many courses in it yet. It gives you a window of time where there are few other experts. It does involve learning new skills fairly regularly, as supply catches up with demand.

In the Millionaire Mind by Thomas Stanley, one of the main ideas is that the successful people he studies are often in low competition fields or businesses. He said his first love was history, but he didn't become a history book author because it was a saturated field with a lot of excellent authors in it already. Instead he wrote about how people became millionaires, because at the time of his first book that was an untapped market.

I am not sure how this translates to other fields or businesses, but something with low competition might be a factor to consider in looking for your next business opportunity.

[Major Tom]

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Originally Posted by brewer12345 How about buying a fixer-upper RV park? You RV, so you understand the customer. You are handy, so you could do a fair bit of the maintenance and possibly upgrades. You like real estate, and this is definitely that.

That's a good diea, especially if you give a discount to RV'ers from ER.org

[Ronnieboy]

Quote:

Originally Posted by Newventurer I have a friend that is in the process of buying a couple of touch less car washes. No employees, cash business, says he can pretty much run it from home with security cameras monitoring supply levels and overall condition of facility.

This and/or a self storage place would be a good 'hobby' for generating one stream of income.

I wonder how much gets eaten up in maintenance to keep the automatic auto washer going and vandalism for the self serve ones?

[Snidely Whiplash]

Quote:

Originally Posted by chasesfish I just picked up on this thread - be very careful on franchises and businesses sold through a business broker. Most are just selling you a job. Have you considered talking to a few of the local RV dealers to see if there's something in their business that interests you?

You guys are good. Very good. Agreed on the part about buying a job and not a business. That was a bit my feeling with real estate - I could never get away to travel and employees were about as bad as tenants. I bought a few properties from sellers that had bad property management stories. I would not consider using property management.

Your idea about the RV related dealership is right on the money. I have contacted a major and well respected manufacturer about dealership opportunities. I have also given some consideration to ......

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Originally Posted by brewer12345 How about buying a fixer-upper RV park?

Very good idea. The depth of knowledge on this forum amazes me. And it's nice to get some confirmation that my thinking is correct; Just a few days before I made the original post here I sent out a (2nd) letter to one of the RV parks we stayed at last fall asking to be kept in mind if the owner had any interest in selling. I never heard back from the 1st letter I sent but I'm hoping the kids might see the letter if something were to ever happen to the 84 year old owner.

I have also spoken with some RV park brokers about parks for sale in months past but after travelling and looking at several I have determined that many RV park owners are outright lying and tax cheats. I guess that's not surprising given the difficulty the IRS might have in determining occupancy rates, but I've always been of the mind that anyone willing to lie to the IRS (an agency that can send you to prison) to save money in taxes, is certainly willing to lie to me to get a higher selling price.

I don't mean to sound like I'm overly negative; I'm really not, but my efforts have been pretty fruitless and I guess I was just a bit discouraged when I made the original post.

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Originally Posted by daylatedollarshort ... while digital nomad type work....

Any specific suggestions? I'd be willing to consider this.

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Originally Posted by haha Dealing with brokers and business opportunity sellers will convince you that a virus came through and destroyed the part of their brains that perceives truth.

See my comments above. You are exactly right. I'm not expecting anyone to underprice the goose that lays golden eggs, but many RV park owners and brokers have tried to pass off lead eggs as golden ones thinking I was too stupid to tell the difference.

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Originally Posted by haha Or cheaper and more certain, become a nurse if you have the personality for it.

My wife is a nurse. I know very well the opportunities and demand that will exist for a while in that field.

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Originally Posted by Ronstar Next time around I'm looking to build a self storage facility. Low maintenance and doesn't look like much work.

Another excellent suggestion and one that is and has been on my list too. It has always amazed me that people will spend good money to store junk. And not just good money, but several hundred, if not a couple of thousand dollars, to store a relatively small dollar amount of stuff. It makes no economic sense but people do it. A lot of my properties had separate garages and they were the easiest thing in the world to rent and manage. People pay their storage rent before they pay their house rent or other bills. Its truly a crazy mind-set that they have. But, then there is the garage tenant that left me with a garage bay filled with hazardous waste that wasn't so fun to deal with....

Any thoughts on overbuilding or oversaturation of the market?

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Originally Posted by Newventurer I have a friend that is in the process of buying a couple of touch less car washes. No employees, cash business, says he can pretty much run it from home with security cameras monitoring supply levels and overall condition of facility.

Right again. I have always considered a car wash for the very same reason. Locally there is one outfit that has a monopoly on those and they have a full time mechanic on duty for equipment repairs. car wash equipment is NOTORIOUS for constant and costly breakdowns. I'm not saying it would discourage me but just something to keep in mind.

Maybe I'm being too negative in my search. I can pretty easily see the downside to most ventures but admittedly am not so quick to fully appreciate the upside. Or maybe it's just an unwillingness to fully value the "potential" a business has; I always laughed when a seller would give the "rents can be raised line" as a reason I should be willing to pay more for a property. If it were that easy they would have done it already and I've never thought I should pay extra for value enhancement that I was expected to bring to the table.

All great ideas offered in this thread and I'm grateful for everyone that took the time to offer advice and suggestions.
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