October 8, 2022

JF2956: How to Ditch Your W-2 for a CRE Career ft. Joseph Cornwell

Joseph Cornwell started his career as a full-time police officer in 2011. Four years later, he began educating himself on all things real estate by reading books, listening to podcasts, and attending meetups. He began buying rental properties and scaling his portfolio. By 2021, he was able to retire from law enforcement and transition into a full-time real estate career. 


Today, Joseph is a licensed real estate agent at Ownerland Realty and a full-time real estate investor with 75 units. In this episode, he shares why he became a real estate agent before investing in properties, what made him decide to start a general contracting company, and how he planned the transition from his W-2 job to a full-time career in commercial real estate. 


Joseph Cornwell | Real Estate Background

    • Licensed real estate agent at Ownerland Realty and full-time investor who initially came into real estate looking for a side hustle, but was ultimately able to retire from his full-time W-2 job as a police officer.
    • Portfolio:
      • GP of 75 units
    • Based in: Cincinnati, OH
  • Say hi to him at:
  • Greatest Lesson: You have to prioritize things, and having a single-track mind is probably not the healthiest approach. 




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Slocomb Reed: Best Ever listeners, welcome to Cincinnati's Best Ever real estate investor mastermind. We get together here in Cincinnati in Deer Park, at the Deer Park Community Center on the last Tuesday of every month to have a presentation or an interview, and to network. Lots of local real estate investors from a wide variety of backgrounds, doing a wide variety of things - residential commercial apartments, non-residential commercial, a lot of house hackers, flippers and wholesalers in the room... If you are listening to the podcast and have the ability to be in Cincinnati on the last Tuesday of the month, then we invite you to join us. I am here with my friend, Joe Cornwell. Joe, how are you doing?

Joe Cornwall: Good, how are you doing?

Slocomb Reed: Doing well. I normally have a bio in front of me that tells me what to say here... I don't have that, but I know that Joe was a full-time police officer who came into real estate investing as a side hustle. In this room, it's a common story among -- and in real estate investing in general. And Joe found ways to get into real estate investing full-time, both to continue buying property, but also to generate full-time income for himself faster than just buy and hold investing would allow. How you get into real estate investing full-time when your career is in a different industry is their topic of conversation. So Joe, can you give us a little bit more about your background and what you're currently focused on?

Joe Cornwall: Yeah, so I was a full-time police officer starting in 2011. I went to the police academy. I did that for 10 years, so I retired from law enforcement in 2021. I believe about 2015 is when I started intentionally getting into real estate and educating myself, reading all the books, listening to the podcast, and attending meetups like this one, and I was able to start buying rental property and scaling my portfolio. I got my real estate license as an agent in 2016, and started a general contracting company here in Cincinnati in 2017. As you mentioned, both of those were basically organically built out of scaling my own investment portfolio and just kind of necessary ancillary businesses to wanting to be a full-time investor someday... Which wasn't really my initial goal in 2015, but I had a plan to buy 10 doors in the next 10 years, and I think that took 18 months, or something. So it happened a lot faster than I had planned, which then kind of made me realize that this could be a full-time career, that would obviously give me more freedom, flexibility and wealth than just staying in law enforcement for another 25 or 30 years.

Slocomb Reed: 2015 the goal was 10 doors. Where's your portfolio now?

Joe Cornwall: Right about 75 units.

Slocomb Reed: Okay. And do you have partners on those? Or is that all just you?

Joe Cornwall: Yeah, three buildings I have partners, and the rest I own myself.

Slocomb Reed: Gotcha. And your most recent acquisition was just a couple months ago - was it 28 units in Clifton?

Joe Cornwall: Yes.

Slocomb Reed: What's the plan there?

Joe Cornwall: So that is basically being converted to marketing predominantly to students. So it's traditional residents right now, lower-income tenants, and it's right on the fringe for the University of Cincinnati campus housing. And we're going to be marketing based on the shortage that the college has for student housing right now. We're going to be transitioning to students, we're going to be renovating the building, making it a lot nicer quality, and hopefully placing better tenants, and obviously, at a higher market rent.

Slocomb Reed: Yeah, I don't know how other universities around the country do this, but U.C. only guarantees and then requires housing for freshmen. So after that first year, a lot of students are just scraping to find what they can. 2015 you start with your first buy and hold property. And then--

Joe Cornwall: Yeah, so I didn't actually close on my first deal until 2017. It was like 18 months from the time I was like, "I want to do this", so I actually closed on my first duplex.

Slocomb Reed: So you became a real estate agent first.

Joe Cornwall: Yeah, yeah.

Slocomb Reed: Why?

Joe Cornwall: So I had worked with a couple agents, started in 2015, and it was a horrible experience. I knew almost nothing about real estate, but I felt like I knew more than they did... And I didn't know at the time, but there are real estate agents with drastically different focuses. So I worked with two agents I just happened to know, and they didn't know anything about investment in real estate. Obviously, an agent, when you call him and say "I want to buy a house", they are not going to turn you down, typically. So I think they were just trying to do their job, but it was not a good fit. And I also realized that the barrier of entry for real estate agents is pretty low.

Slocomb Reed: So low, yeah.

Joe Cornwall: So I was like, "You know what--" I had no plan at that point to actually broker sales for buyers and sellers, but I was like, "If I'm going to be serious about this, I want to be able to get in quick, I want MLS access, and I want to better represent my own best interest, because I didn't feel like they were doing it as well as I would."

Slocomb Reed: Plus 3% commission [unintelligible 00:05:46.26]

Joe Cornwall: Right, any income. I just looked at that as a discount at the time on what I would buy or sell.

Slocomb Reed: Gotcha. I want to come back to that in a moment, but we in this meetup often talk about how hard it is to find contractors... So a year after getting your license, the same year that you bought your first rental property, you started a general contracting company. Was it specifically to be your own contractor, or you wanted to be your own agent, or what was it?

Joe Cornwall: That was a little bit different. I did have a horrible experience again, working with contractors. I had some money stolen from me... I was trying to DIY my first property, because I didn't have a lot of cash... So actually, I had tools taken by contractors who I did hire for certain things, while I was doing other things... They'd just walk off with my tools.... So I had a really bad experience working with contractors, and a similar kind of epiphany where I was like, "If this is the common denominator, the bar here that contractors have set, I think I could probably figure this out."

Slocomb Reed: The barrier to entry is way lower for becoming a general -- it's go to the city, pay them 200 bucks, and you're a general contractor.

Joe Cornwall: Yeah. So it was a bad experience. I did have a little bit of kind of just DIY construction experience, I did a live-in flip from 2011 to 2014, unintentionally. I didn't know what that was at the time, but basically I just bought a crappy house, I fixed it up, and I made some money when I sold it. I was like, "Wow, this was easy. I should look into this."

But anyway, building up the GC company -- and I actually started because as an agent, we often get calls asking for referrals... So I'd found myself referring out a lot of contractors who I had met through this group, through other networking that I had used myself as subcontractors... And what ended up happening was, I'm kind of doing all the legwork a general contractor does. I'm basically being a middleman, which is ultimately what a general contractor is... And then I was being called to fix issues that they would have with the contractor, and mediating... And all this was free, and I spent a lot of time and headaches, and I'm like, "I should probably be paid for this if I'm going to spend the time and energy in developing it." So at that point, it was within a year of buying that first property where I kind of formalized it, I actually opened up a corporation, I got general liability insurance...

Slocomb Reed: When was this?

Joe Cornwall: I bought that first property I think in like February 2017... So within a year that, I was formalizing the company, I started doing branding, logos, and actually kind of building it out to be a legitimate company. And as I grew my own portfolio and continued buying, I was able to bring on, first part-time, and then full-time, and then scaling up my actual hourly employees... And I also worked with a handful of subcontractors.

But then, when somebody called me wanting something done to their house, if I was going to actually call a contractor, schedule it, give them a price and guarantee the work to an extent as far as if they weren't happy, we were correcting it - I was obviously making a profit to do that.

Slocomb Reed: Yeah. I don't want to glaze over the transitions involved for you from full-time police officer, and I want you to tell us more about what that looked like... When you decided to get into real estate full-time - I know that happened well before you left your job... What did that transition look like, and how did you plan it? And then what actually happened?

Joe Cornwall: I don't think I ever had a set date, like "I'm retiring from law enforcement on this date." It was very much a natural process of getting over my own fears of giving up guaranteed income every two weeks, getting a check, benefits... I didn't hate my job or my career... I worked in this city we're actually in, it's a small town, nice suburban community... It wasn't like I was getting shot at every week, or anything like that. I was in a fortunate position as far as law enforcement goes. But I knew I didn't want to keep that schedule forever. As you mentioned, doing the real estate investing, the agent business and the contracting - all those kind of side hustles while working 40 plus hours...

Slocomb Reed: What did those 40 plus hours look like? Because it's not nine to five all the time.

Joe Cornwall: Yeah. For, I would say 7 of the 10 years I was on third shift. So my schedule was pretty rough. Typically, my day would look like -- we worked eight hour shifts, so I would wake up in the evening, answer phone calls, emails, do all the agent kind of stuff, catching up on a day's worth of missed communication... Go to work, work eight hours, go home, try to sleep a little bit... If I had closings or appointment showings, there were days where I'm sleeping three, four hours a day... On average, I probably averaged anywhere from 70 to 90 hours a week, five years. So it was a pretty unhealthy lifestyle, that I knew I couldn't sustain... So as far as planning my transition out - again, I didn't have a set time. The catalyst ultimately for me to get out of my job completely was finding out I was having my second child. So we had a son back in March, who's now about six months old -- or I'm sorry, April... And knowing that was coming, I was like, "I need to be out of the job before that", because I have a five-year-old daughter,and when she was a baby, I knew -- between all the things I had going on right at the same time, starting my businesses and the investing, I was just never home. I had very limited time, and I didn't want to do that again.

So that was the real big push to get over my fear of leaving my security blanket of a W-2 job. But as far as like mathematically, it would have probably made more sense to leave in 2018-2019. At that point, my business income had surpassed my W-2 income. So it was mainly just fear that made me stay.

Slocomb Reed: Having worked several years of that 70 to 90-hour pace... There's some people listening right now and some people in this room who want to find a way to make that transition and get into real estate full-time. They either because of fear or because of frank finances can't leave the job all that quickly, and they're looking to make that transition and find a way to make it not necessarily smooth, but make it a transition that doesn't require 5+ years of 70 to 90 hours. Having made it through that now, what advice are you going to give 2015 Joe Cornwell now to get through that transition faster, less stress, more sleep, and more time with family and the other things you wanted to do?

Joe Cornwall: There's a lot of angles to that question. So to the first point - and I wish I could remember who did it... I think it's one of the Gobundance founders who I've heard this quote from, but basically, they talk about the idea of if you come from basically no money, middle class, lower-middle class, whatever, and you want to change your trajectory to become wealthy or retire early, I think his phrase was you have to do 5 and 10, or 10 and 20, whatever it is - I've heard different variations - but it basically means you basically have to take on two full-time jobs, unless you're just such a high income earner that you can make double or triple a normal salary hopefully in one job. That'd be great. And I think he explains that probably a lot better than I am right now, but I was already in the middle of that when I heard it, but it made sense. It kind of clicked, like "Hey, that's what I'm doing."

So giving myself advice in 2015 - I don't know how much I would change. I've obviously been successful, I'm fortunate to have the success I've had... Obviously, there's times where I probably would have prioritized my family life a little bit better... Full disclosure, I got divorced in 2019. A lot of that had to do with never being home, working 70 to 90 hours a week... If your partner is not on board with that on the frontend, it's probably not going to go well. So it creates a lot of strain on the relationship if you're not establishing that before you do it. I kind of just fell into it, and I was in that grind and doing it, and I did put a lot of personal things on the backburner because I was so laser-focused on my goals.

So I would probably advise my younger self that you don't have to do it in the same way I did it, and you can take your time. So if you want to retire in five years, you might have to get aggressive and crazy like I was, but if you're willing to take a little bit longer approach, 10-15 years, and not just -- you don't want to work 30 years, like most people do, or more... There's definitely ways to do it that are a little bit more manageable and conservative than the way I went about it.

Break: [00:14:11.28] to [00:16:06.16]

Slocomb Reed: So I first heard it from Brandon Turner on the BiggerPockets Podcast, but it was a member of Gobundance he was quoting, and I think it was you have to figure out how to do 20 years' worth of work in 10 years. That makes sense. That's a similar path to what I took as well. Thinking about the members of our audience who are on or want to be on that trajectory - we're recording at the very end of Q3, 2022. This episode will air Q4, 2022. I think everyone, at least everyone who's listening to a podcast like this one, has some awareness of what's going on in the real estate market and in the economy, locally, nationally and globally. I'm not gonna ask for your crystal ball, but where do you think the opportunities are right now, to transition from a full-time W-2, requires a particular chunk of your time career, to transitioning to being in real estate full-time? If you were starting right now, what are the opportunities you'd be taking advantage of?

Joe Cornwall: Yeah, so I think first of all, it's really important to understand that if you want financial freedom and to generate wealth, and whatever that looks like for you and your goals, you have to untie yourself from $1 per hour like a W-2 job. Obviously, with that business, you're able to scale your income without being directly correlated to the amount of hours you work. That's not easy, it's not simple, but I think it's impossible to quickly retire or leave a W-2 job without having that relationship where your income and value is not based on time.

So with that said, I think that the opportunity - and this is just kind of basic economics - is you have to look for where your market, whatever that is, whether it's your industry, your local, like actual physical market, the way things are changing with technology - you have to look for where the opportunity is that you can provide a value or an opportunity or a business that is untied to your time. So for me, that was being a investor-focused agent in my market that did not have a lot of investor agents.

I jokingly say - and this is not just because I'm sitting next to him, but I've literally told multiple clients, multiple investors, there's like three agents in the entire Cincinnati market that I would actually trust with investment-related real estate advice, and Slocomb's one of them. Back in 2015, I didn't know anybody like Slocomb or myself. So that was an opportunity, right? There was a lot of investors looking to buy, and there was literally no one filling out that demand. Slocomb's also moved into the general contracting space as well, and we both have realized, as we've grown these businesses, that it is massive demand. I'm sure everyone in this room and everyone on this podcast knows finding a contractor right now to do anything is almost impossible. For us as business owners, hiring contractors is almost impossible. So that creates such a scarcity in the market that is extremely expensive for us, but also ultimately, for the end customer, to get any contract work done.

So if you're looking to scale real estate, you have to either have that access on your own, like we do, or you have to have someone in your market who can fill that demand, which is obviously what we tried to do as business owners. So using that as an example - obviously, everybody's got their own advantages, strengths, skill sets... But if you're not filling a need in your space, in your market, you're not going to be able to accelerate your income in a way that will change your life to help you leave the W-2 job. So that's what I would look for, and that's what I looked for, and that's what Slocomb looked for... Obviously, we have followed similar paths, because we both saw the obvious lack in our market as we tried to invest in real estate.

Slocomb Reed: So find a bottleneck that you know a lot of people are experiencing and figure out how you can be the one who widens the bottleneck.

Joe Cornwall: Exactly.

Slocomb Reed: Labor in general is a bottleneck in 2022. And I think that's what you and I both keyed in on, where -- you started way before I did, but with general contracting, establishing a network, having access to people who understand some trades and want to do good work for good money... That's an obvious bottleneck that you and I are currently taking advantage of, opening for people. What are the bottlenecks are you seeing in the market right now, outside of contract labor?

Joe Cornwall: I think that labor is the biggest bottleneck to real estate. Literally, as crazy as that sounds. I can find deals that would make sense, I can find money for those deals, whether it's mine or our partners, and everything else that you need to put together and operate a good real estate deal. Literally, what would stop me from buying a great real estate deal right now is knowing I don't have the manpower to facilitate that business plan to turn properties. obviously, what I do, I focus on value-add real estate. So for me, having access and having that ability to have labor on-site to do those things is required. So to me, that is the number one bottleneck in real estate, at least in our market, And I think in a lot of markets.

I think for me, the second is still finding good leads for good deals, because we are in a rapidly-shifting real estate market. And obviously, we could have an hour-long conversation about that... But the quick summary of that is that a lot of people aren't selling now for different reasons than they weren't selling six months ago, and that's creating even more lack of inventory.

So I think almost a necessary skill set for any investor to have is access to direct-to­seller deals. So whether that's a good wholesaler, or a network of wholesalers, a good agent who can get off market or on market deals... Or if not, they have to do it themselves. So I think that is probably the most important thing in the next 6 to 12 months. And it's been important for the past couple years. We all know finding deals has been extremely difficult, especially if it's a legitimately good deal. But if you are not able to go direct to the seller, in one way or another, you're not going to be able to find good deals. And I think less people are going to be selling in the next 6 to 12 months than the past 6 to 12 months. So it's gonna create even tighter margins with lack of inventory.

Slocomb Reed: So find ways to get direct to seller, and find good-quality labor for yourself, but also that you can share.

Joe Cornwall: Or find a good contractor or project manager that can facilitate what you're trying to accomplish. I have clients who buy turnkey deals, and there's nothing wrong with that; you can still make a decent return. But if you have any value-add component to your investing strategy, you have to have access to good contractors.

Slocomb Reed: Awesome. Well, Joe, are you ready for the Best Ever lightning round?

Joe Cornwall: Let's go!

Slocomb Reed: What is the best ever book you've recently read?

Joe Cornwall: I think the last actual business book before the baby - obviously, I haven't had much time - was Good to Great.

Slocomb Reed: Jim Collins.

Joe Cornwall: Yeah. So that was a great book, especially kind of on the path I'm on, to help me understand some of the qualities of great companies and how to scale into being one of those great companies. So that was a good business book.

Slocomb Reed: Nice. What is your best ever way to give back?

Joe Cornwall: I do a lot of free real estate education myself; obviously, I attend groups like this, I have a mastermind group of my own, and I speak at high schools in financial freedom classes... So I think that having access to financial literacy, financial freedom and real estate investing specifically, having access to that at a young age will completely change people's lives. And I know that I wish I had somebody to teach me and to open my eyes to that when I was younger, and not have to kind of learn it the hard way, like I did.

Slocomb Reed: Specific to getting full-time in real estate investing and leaving your job behind, what is the biggest mistake you made, and the best ever lesson that resulted from it?

Joe Cornwall: I would say it's probably my biggest mistake would be on the personal side, like I mentioned and alluded to. We obviously all want to be financially free, we all want to be wealthy, but losing your friends, spouse, straining family relationships... You have to prioritize things. And having a single-track mind is probably not the healthiest approach. So that's probably my biggest mistake, on a personal note. I can give you probably a bad investing experience, if you'd like that.

Slocomb Reed: No, I think that's really helpful for people to hear. What is your best ever advice?

Joe Cornwall: Okay, so my best advice - and this is a conversation I find myself having often - is that you have to establish as an investor extremely specific goals, because that's ultimately going to dictate everything else you do after that. So all these things we talked about - leaving your W-2 job - are great, but if you are, let's say, a Google engineer and you're making $500,000 a year, it probably doesn't make sense to leave your W-2 job unless you really hate it, to go make 100k or 200k or even 300k operating in business... Because your issue probably isn't capital, or access to capital.

So my point of that, as an example, is that you have to establish your goals. If your goals are to generate cash flow, or appreciation, or wealth, you have to dictate that first, then you can determine your investment strategy to follow up with. And I don't think enough people focus on the goals and why they do them. I think a lot of people just say, "I want to buy real estate." These are conversations I have with clients all the time. "I want to buy real estate", or" I want to own apartment buildings."

Slocomb Reed: What's your goal? "Oh, I want a duplex." Yeah, but what's the reason you want a duplex? "Well, you know, I want to get started with a duplex."

Joe Cornwall: Exactly. So I think those things are so much more important than what your actual asset class is. Understanding your goals and why, or understanding your why and then making goals around that is the first step and probably the most important step, and I don't think nearly enough people focus on it. I don't even I didn't when I was planning. That was an afterthought. So yeah, that's definitely my recommendation.

Slocomb Reed: Awesome. Well, Joe, thank you. Best Ever listeners, thank you as well for tuning in. If you gained value from this interview with Joe Cornwell, please do like and subscribe to this podcast. Joe's contact info is available in the show notes. Please do also share this episode with a friend that you know that we can add value to through this conversation about getting full-time in real estate. Thank you and have a best ever day.

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