Would I be crazy to turn down REPE first year our of undergrad?
I need some career advice.
I am currently interning at a pretty prestigious, medium size ($2-3b) fund and have questions about whether the industry is for me.
I've only had one week so far so my uncertainty is definitely subject to change.
I certainly enjoy real estate, I plan on owning investment properties of my own (duplexes/triplexes to start) pretty soon after college. I have the capital (appx. $75k in stocks and bonds) to start which is a huge hurdle that I've mostly already overcome.
All I know for certain is that I want to be a business owner of my own, though which field of business is currently unknown and not the most important thing to me. RE is certainly an option there. Would I be better off going into consulting if I'm going to be a business owner? Should I try and go into traditional PE directly out of college (if that's even possible without an internship)? Should I stick around for a few years and eventually develop my own RE shop?
I am also thinking that brokerage would be better suited for my personality. I am very social and I don't want to spend a career working in Excel. I'm assuming that pivoting from REPE to brokerage would be pretty easy.
If I were to go full-time at my current spot (assuming a return offer) it checks a lot of boxes. Good compensation, smart bosses, lots to learn, and most people in the office only work around 35 hours a week (when not on a deal). I am in a small office so I will get to learn about all aspects of the process (acquisition, management, disposal, etc.) which is exactly what I want out of REPE.
It essentially boils down to two questions:
-
Would I be throwing away something great that a lot of people strive for if I didn't stay for at least a couple years? (I'm totally fine staying for a couple of years even if I don't love it)
-
Is REPE a good starting spot for a future business owner/entrepreneur? If not, where should I go to get some valuable experience?
REPE -> real estate entrepreneur is an extremely well trodden path at all levels (associate to head of investment committee)
Can you expand on why that is? What skills do you learn in REPE to eventually become your owner/operator of your own portfolio? Does it matter if you work on the GP or LP side?
You learn how to select investments, how to identify and hedge risk, and if you are in a role that also gives you exposure to the Asset Management side you also learn how to operate an asset from a bird's eye view (coordinating with PMs and leasing, setting strategy, cost management, etc.).
GP side is WAY better if you want to do your own thing someday. You're too far from the asset and individual transactions as an LP.
well first answer these questions:
I’d say answer these questions and people can better advise you with their opinions. If you want to be an owner down the road, RE may be a clearer path. however, it may be a slower way of building a company than what you’d expect. if you were to make a decision, without thinking twice - what does your gut tell you?
Not exactly sure what the pay would be but likely mid-90s for the first year and 110k-ish for the second is my understanding. Increasing at an accelerating rate from there.
It would be Big 4 or MBB most likely. I have pretty good connections at 2/3 and 3/4.
I want to be an entrepreneur because I want to be calling the shots and getting rewarded for making the right decisions. My dad and uncle run a third-generation family business (industrial wholesale) which more or less inspired me, but I want to go on my own. I think I would be best as a business strategist. I also want to be a creator (jobs, new products, growth, etc.). Part of the reason I'm not really interested in high finance is that the majority of it doesn't really create anything other than returns (which are obviously important, and yes I'm oversimplifying). Also as said before I don't want to be an Excel and ppt monkey.
If you want your own portfolio of properties, go into whatever career path will maximize your earnings so that you can maximize how many properties you can acquire. Whether acquisitions, development, IR, or institutional brokerage, little of what you will do as a RE professional carries over to the 2-4 resi unit/single NNN lease space. If anything, you’d be overexposed to the real estate market by staking both your livelihood and nest egg to one asset class.
How much capital would you say is needed to break into other asset classes?
I am unsure what you are referring to as other. For Class B or C duplexes and triplexes in satellite markets, not much capital. If you plan on developing industrial or luxury retail, you need a high net worth and you’re playing a risky game. The types of companies and funds discussed on WSO emphasize the latter.
If you think you could get into a good, regular IB shop, I'd do that if you're uncertain about real estate. Many big REPE funds hire associates almost exclusively out of IB banking programs (again talking normal IB, not REIB), and you'll have the optionality to not go into RE if you end up deciding against it. If you start in REPE, you're going to need an MBA to transition into any other field. Also, I'm sure it's happened, but I can't recall seeing many, if any, people in real estate that started in consulting, though I've seen tons that started in IB.
If you want to start your own business and be an entrepreneur, you need to pick a field that you are passionate about because you need to have an obsessive mindset. For example, I love real estate. I literally don't stop thinking about it. I'll think about potential deals and if they are profitable, my current projects, or on a big picture level, how to grow my family's real estate business and what direction we should go. I can be pretty boring at parties because once someone asks me about what I do and real estate comes up, I can talk their ear off. In my opinion, this is the level of passion and obsession you need to have when starting any business. Now why do I think you have to be obsessed to be successful entrepreneur? For 2 reasons:
1.) When you are starting your own business, you have to do everything. So inevitably, there are going to be parts of the business that are boring, but are nonetheless just as important as the most interesting parts. Having passion for what you do will motivate you to do all the bullshit work.
2.) Furthering your knowledge and honing your craft. When I joined my family's business about 4 years ago, one of the strategies that I wanted to explore and bring to my family's business was entitling land. At that time I did not know how entitling worked, what the process was, which zoning attorneys to use, etc.. So I spent hours and hours studying the development projects of other developers. I would pull their plans/presentations to the city and study them. I would call the zoning attorneys that entitled those properties and discuss it with them. I would even go online and pull archived Zoning Board of Appeals (ZBA) hearings and watch them for hours. This is essentially watching court cases about real estate...to the average person, this is incredibly boring, but to me it was highly interesting because I was learning more and more about entitling land. Now 4 years later, I have entitled 2 properties and am currently working on entitling what will hopefully be our largest project ever. If it weren't for my passion/obsession for real estate, I would not have been able to do any of this. Even today when I drive by a new development, I will research it. Who is the developer? What are they building there? Which architect and zoning attorney did they do? How much did they pay for the land? How much do I think they will make? This knowledge may or may not benefit me in the future, but I don't research it just for my own benefit. I research it because I am genuinely interested, but hopefully by researching and studying so many development projects, I will gain a better understanding of the industry. No matter what industry you want to start a business in, you need to know everything from the big picture all the way down to the smallest details because those small details could determine whether you are successful or not and being obsessed will help you learn those details.
The reason a lot of entrepreneurs do real estate is because it's a pretty "common sense" industry (specifically residential). It's not like a biotech or tech start up where you need to be very technical and maybe even have a PhD. Really the biggest hurdle to get started in real estate is capital. It doesn't take a PhD to buy a triplex and rent it out. You can read about my recent post about 3 successful developers, none of which started in REPE: https://www.wallstreetoasis.com/forum/real-estate/real-estate-developme…
Now if you are not passionate about real estate and want to start a business in a different industry, then my advice is to work in a more technical field. I was recently listening to a podcast about Mark Cuban. Mark was a business major with no technical background. However, his first two jobs (besides bartending) were in tech where he taught himself to code and then was able to use that technical skill to start MicroSolutions. The reason I wouldn't advise working in consulting/IB/PE to be an entrepreneur is because you don't really get into the details of any of the companies you work with nor their products and you don't learn a technical skill. In consulting your assignments are only a couple weeks to maybe a couple months long and typically your mandate is regarding big picture strategy. If you were to go down one of these paths, then the more likely path to running your own business is raising capital to acquire existing businesses where all the existing infrastructure is already in place for you so you don't really need to know all the finer details as someone else is doing it for you.
These are some great things to think about. Thank you!
Sent you a PM, would appreciate if you could take a look. Thanks
Consequatur aut deleniti sit unde eum tenetur. Sapiente inventore laborum libero necessitatibus dolorem rerum est eum. Ipsa deserunt nihil exercitationem sed ea. Ad voluptas quo eius velit tempora qui.
Non est voluptates quis quos. Dolorem quia ex harum nihil. Minima vel et amet saepe reprehenderit minus.
Et ipsa ducimus dolorem voluptas ea eum. Voluptatibus corporis quo mollitia dolorem ut iusto. Unde ut id iste perferendis veritatis at suscipit mollitia.
Asperiores et quidem quis. Suscipit ab vitae possimus. Soluta et atque ex commodi deleniti. Voluptate repellat animi quam modi quae quo sunt. Non aut rerum nobis quo aut reprehenderit sequi. Nihil dolore exercitationem repellat sed a. Sed sed sed sint.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...