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I appreciate investing in real estate because the fundamental value and cash flows of the assets your acquiring are more realistically ascertainable and rooted in tangible value - as compared with trying to estimate the future cash flows or a terminal growth rate of an early-stage tech company or something. You can really put a fundamental value range to a real estate property with a straight face, whereas price targets for biotech companies or tech stocks are yielded from wildly unpredictable variables.
I also enjoy the bricks and mortar aspect, it's dope going to do property tours and seeing the shiny finished product after a re-development project. It never gets old driving down K Street and pointing out buildings our company owns to friends and family too.
Aside from that, great work-life balance, great potential to go out on your own and start your own investment series, and the culture is way less stiff than IB or Corp PE.
Totally unrelated but how come every single one of your post gets MS? I've seen numerous comments that weren't troll comments with MS. lol
prob the user name alone
Idk, I think it's because I shit on The Duke of Wall Street one time and now he follows me and MS's all of my comments. Whether it's him or not, I respect the discipline. Someone's really grinding it out on here with the MS's.
that's original
Great, thank you for this genuine insight!
Having brokers make 1% off your deals for ab.so.lute.ly. nothing
There is nothing more demoralizing than sourcing a deal that actually makes economical sense, negotiating the terms of the purchase, working with lawyers, architects, politicians etc. while bringing the project through the entire permitting process, negotiating a construction contract, managing the construction process, getting it finally built and leased all over a 2 or 3 year period with countless hours of work, not to mention stress and risk - and then having a broker come in and sell or refinance the building and on the settlement statement his fee is a multiple of your salary. For 2 months' work at best. Untouchable business model. End rant.
There are many aspects that REPE shares with any RE company that I really like (i.e. tangibility, big picture (i.e. macroeconomic factors affecting asset, locations) and finance compontent).
But why I love REPE more than acquisitions is the entrepreneurial mindset behind REPE.
Want to build your own platform of together with a developer buying old ships and converting them into logistics / houses / whatever, go ahead as long as you're striking the IRRs!
Want to invest in non-traditional asepcts of businesses (i.e. equity release / mezz ) go ahead (build your own platform).
I have almost exclusively worked on the REPE-side of the business. Here's what I like about it:
You learn a lot about structure, risk, and financial engineering
The compensation vs personal risk standpoint is as good as it gets in this industry.
If you are successful over a long period of time, you have the network, skillset, and credibility to start your own firm
Because you're "the money" in any deal, you have a lot of control and leverage with the various JV partners.
Where it lacks
Interested to hear other's viewpoints.
Have you thought about hopping over to GP side of the industry? Is it difficult for LP to go to GP or vice versa?
The REPE life chooses you.
Seeing everything. I saw literally every single deal of size that come out and it was really fascinating to see how things shifted over time. Also, slightly schmaltzy alert but my real favorite part though was arguing about deals - you're working with other smart, opinionated person and some of my best times in REPE were sitting down late at night and chopping up a deal with my co-workers. A lot of my viewpoint as an investor was shaped by those conversations.
What don't you like about REPE/Real Estate? (Originally Posted: 07/17/2014)
Whether it's the industry, your firm, the deals you work on, or your colleagues, just curious as to what complaints people in REPE/real estate have about their current/past gigs.
Bump
modeling from CAM reconciliation, reading leases
Technical phone calls with operators (e.g. elevator maintenance)
The inevitable shake-outs when the markets pull back. There seems to be one a decade. In 2009, there were hiring freezes across the board. I guess this is true with most financial roles. However, it seems to be worse in CRE. The CMBS guys got it the worst the last time around.
I was in brokerage before my acquisitions role, that sucked.
Well that all depends on your personality type and how much money you're making.
+1. I was assistant to the assistant manager at a brokerage specializing in retail properties.
Lease abstracts, scumbag brokers from other firms, LIHTC development compliance
Lease abstracts, scumbag brokers from other firms, LIHTC development compliance
Working with municipalities and lease abstracts
"in the weeds" diligence.
All the shady characters/borderline criminals in the biz
Would you mind sharing more about shady characters in the business? I just broke into REPE as analyst and I'm wanting to know what to watch out for.
What is wrong with Abstracts? As long as lawyers are putting them together, they make my life a hell of a lot easier. Estoppels, on the other hand, when acquiring an asset w a ton of tenants, is a major pain.
getting asked to run models on a conference call or in a meeting. shit takes time.
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