CFA for Real Estate. Worth getting???
Since the prior set of posts discussed whether or not an MBA in real estate would be beneficial for career transitioners, I figured it would be appropriate to broach a similar topic, what about CFA exam candidates and charter holders?
Long story short, I work in wealth management now (aka it's really sales), am a CPA with 5years of public accounting experience (2 years within an audit real estate rotation in a top 6 firm), and want to transition to a CRE deal making team at one of the top BB firms. Eventually I'd like to run my own portfolio or be part of a REIT investment management team. How can I make the transition, learn more about modeling and not have to spend 100k in MBA tuition. Would the CFA be a smart alternative to an MBA?
Thanks.
CFA is generally good if you work in any sort of investment role (HF, AM, ER, etc). It does have several chapters on real estate, which serve to give a pretty good broad overview and knowledge of all the basics, but it's not something that goes very deep into real estate by any means.
If you're more interested in real estate specifically, perhaps consider a masters in real estate - I think at least NYU has a program for that, and it's going to be much cheaper than an MBA.
http://www.scps.nyu.edu/academics/departments/schack/academic-offerings…
[quote=Going Concern]CFA is generally good if you work in any sort of investment role (HF, AM, ER, etc). It does have several chapters on real estate, which serve to give a pretty good broad overview and knowledge of all the basics, but it's not something that goes very deep into real estate by any means.
If you're more interested in real estate specifically, perhaps consider a masters in real estate - I think at least NYU has a program for that, and it's going to be much cheaper than an MBA.
http://www.scps.nyu.edu/academics/departments/schack/academic-offerings…]
I would highly recommend the NYU real estate programs. Their school of real estate is highly respected. I also have completed an RE program there and it was actually great. Most students are already in the field so its great for networking as well.
So just for level 1 you'd be looking at 200+ hours of studying, and it gets worse from there. I think you could do a lot better just putting those hours to use trying to network with people in the real estate industry. Like the poster above said, the curriculum doesn't get too deep into real estate.
I know some smart people in real estate who have done/are doing the CFA and have nothing but good things to say about it.
Having said that, you already have a CPA. I know this doesn't sound too glamorous, but wouldn't the finance/accounting side of a real estate company (for starters, at least) be the path of least resistance?
https://www.linkedin.com/answers/administration/commercial-real-estate/…
Depends on where you want to start out/end up. I've asked myself the same question and I think what GoingConcern said hits the nail on the head. A CFA isn't needed in the majority of real estate positions, but if your going to work on the portfolio level I'm sure it would be very useful...just ALOT of time to spend.
In my personal opinion, the CFA is a grossly over-pursued designation. It's best use is for retail-facing financial professionals who focus on securities. This means primarily equity and bond research, private wealth management, and some asset managers like mutual funds. It's been adopted, however, by a slew of finance industry hopefuls looking for roles in everything from banking to private equity to hedge funds (it is of some limited use to the latter), and now apparently real estate. Most hope that it will be a shortcut past the MBA, which it is not.
I cannot recall having ever met anyone in real estate private equity, real estate investment banking, or REIT management that had a CFA designation--at least no one who advertised it by their name. I think based on your intentions, you will find the CFA to be a waste of time and money.
For the record, I have neither a CFA nor an MBA. I can't hold myself out to be an expert on this subject, but figured I would cast my (hopefully credible) negative vote amid what seems to be a preponderance of support for the CFA on this thread.
not even sure where to begin with this...i guess i'll sum up my view of your comment with one word: specious
Agreed.
CFA is relevant in only one sector of the finance business - Asset Management (equity research, credit analysis, portfolio management type roles).
If you wish to pursue the designation, do it because you want to gain knowledge of investing, not because you think it will help your career (it wont).
Gorilla, you make a good point on how the CFA is a relevant for asset management. But at the end of the day, isn't everything you do done so it will help out your career? Nobody sits through training or goes to college or gets an MBA for any purpose then then helping out your career.
With that said, if you were in my shoes, and hypothetically you wanted to network but with no initial sets of contacts, what resources, groups or events would you look to join and or research?
Thanks,
I am joining this conversation late but I have my Masters in Real Estate Development among other real estate related degrees and do not view the curriculum of the CFA as essential for real estate finance. Real estate, as an alternative investment, is thrown in as an afterthought in the CFA curriculum as an effort for CFA to try to portray itself as all things to all areas of finance. It can't be. No offense to CFA - it is a tough road and requires a huge commitment of time and brain power.
But, if your true commitment is real estate, I would encourage people to look into the Chartered Realty Investor designation. If you look at the curriculum, it is much more applicable to commercial real estate investment than the CFA. That said, admittedly, despite backing from various real estate industry leaders (insurance companies, investment banks, REITS, mortgage companies, etc.), it needs a lot more members to thrive and needs to continue to develop. The designation will not unfortunately at this stage provide the prestige of the CFA -- CFA has marketed itself well for a long time -- but you have to ask what your ultimate goal is. If you want a certification that will test you on a broad range of real estate practical topics and will show you have well rounded real estate knowledge and commitment to commercial real estate, CRI is worth looking into. If not CRI, you should look at CAIA which has roughly 25% or so real estate in its curriculum (though not at both the property and portfolio level like the CRI). However, it is still more focused on real estate because CAIA is strictly focused on alternative investments.
I believe CFA is worse than MBA for a career in RE. Save the time (very likely >800 hrs) for networking. I only know one RE banking MD has a CFA, but he obtained it way before he entered RE.
haha, i love this argument when i hear it: "save the time...for networking". If you can't combine the two you need to evaluate your time managment and work ethic.
Oh yeah, I finished all exams in 3 years when working full-time, should kill'em in 2.5 years if I have better time management skill and work ethics (wait... what ethics?)
And I took cfa was because I am in an industry where it's relevant, not because I want to get into RE. I agree with RE Capital Markets: Do it if you enjoy learning, but don't expect too much especially in RE.
The CAIA has a decently sized section focusing on real estate. It only has two levels/exams, which means less time invested, and is more specific to alternatives investment. Seems like this would be a worthwhile designation in real estate finance/investments...thoughts?
Would also appreciate any feedback on the above question.
Thanks for everyones input. As for myself, I am looking to eventually get onto the portfolio level. However, at this stage in our economic recovery, even if ur a great sell of yourself in interviews, how can you get a employer to take you on knowing you have limited experience?
I'd like to spend my time networking. However, besides Rebny and my college alumni, where else can you look to start??
A little surpirsed that everyone is in such agreement that the CFA is useless for a career in RE. I agree that it is more "relevant" in AM.. But to say this:
"If you wish to pursue the designation, do it because you want to gain knowledge of investing, not because you think it will help your career (it wont)."
Is a little harsh.
Case in point: Knew a team of RE professionals that over the past five years broke up their company and went to other gigs.
CFA #1 went to a start up REPE firm in CA. CFA #2 was headhunted to a 9B AUM firm to work in their opportunistic RE division.
The rest? Who the fuck knows.
My point is that the CFA opens doors. Maybe it was the people in this case, but I bet it helped. Sure, if you are at a small repe at the analyst level and know you will just get promotion after promotion and make it to the top, then hell, even an MBA is not necessary. But I know that in the small RE world where relationships, background, and firm reputation matter, there is not a team out there would not add a CFA to their brass.
The CFA designation does not replace and MBA. Why? Because you are paying the $200k for the MBAs recruiting channels. Blackstone will go to Wharton and recruit on campus. If you have a CFA you'll be in the same need-to-network position you were in before. Albeit, they may be more likely to add you to the team than an undergrad degree + 6 years RE experience.
To answer the OP question, a CFA will be far less likely to help you break into RE than just networking or even an MBA (read: recruiting channels, not educational benefits) because this is very true:
It is extremely difficult to break into RE without prior experience nowadays, mostly because their is so much unemployed talent "on the sidelines"...
I can guarantee that CFA #s 1 and 2 got those opportunities because of their experience and networks, CFA probably had little to no influence.
I just don't want anybody here (or anywhere, really) to pursue the designation with hopes that they will eventually be more valuable in the RE investing business; that would just set people up for disappointment. Not to metion that it is a serious commitment.
FWIW, I am seriously considering pursuing the designation. Shocking, I know. Why would I discourage doing so when I may do it myself? Because I want to gain more knowledge in investing and because I am actually interested in the material (excluding the ethics portion), not because I expect it to do anything for me.
while likely well-intentioned, this is another specious argument. case-in-point: nobody does investment banking ONLY because they're interested in it, though usually general interest in analyzing businesses/situations is a factor. if you just want to gain more knowledge in investing, you can read whichever books you like (good will hunting style) without sitting through three grueling 6 hour exams (not to mention the countless hours required in mastering the format of the exams/questions).
there are many many investment roles where CFA is a requirement, or at least pursuit of it. and even in areas like real estate (especially if you're doing research or portfolio management, somewhat less for capital markets/trading), having a CFA only helps (even if it's not going to get you an interview on its own). i agree with sk8247365's post. also, cfa's like to hire other cfa's. just like bankers like to hire other bankers, ivy leaguers like to hire other ivy leaguers, lacrosse players like to hire other lacrosse players, frat guys like to hire other guys that were in their frat, etc. it's just the way this damn industry works.
also, just for reference if you decide to go thru with CFA: not liking ethics is an ethics violation :P
I'm not as big of a dog as some other people in this thread, but I have seen it pursued and know of people pursuing right now that are in the real estate game. I just heard of someone at Verde that is pursuing it.
I personally think that from the 1000's of opinions I've heard on the CFA for something like CRE finance, it certainly can't hurt you, and it may indeed help you, even if it isn't the best/easiest way to get where you want to go.
2 CEOs (one brokerage and one institutional landlord) and one SVP of a PERE Fund have expressed how strongly they feel a CFA adds to a real estate professionals value. I'm trying to decide if this is the right time for level one, but i have no doubt it will be something i do in the next 5 years.
I think its time we created a separate networking thread.
I know a person who knows a person who knows a person who works at a REIT that does operations, development and acquisitions. They hold the title of Asset Manager and are pursuing a CFA.
I don't know if this means they're looking for a way out or what. But this is just an example of someone who is in CRE with a good name and a good career.
I guess my impression of asset managers at this level is that the CFA might not be a totally useless thing -- am I wrong?
It couldn't hurt, right?
I would say it mainly depends on what you want to do within real estate. The CFA is looked upon very favorably by REITs and real estate PE due to the highly analytical nature of those jobs. Even though the curriculum doesn't have much on real estate, the portfolio and risk analysis skills make you very valuable because it can be easily applied to real estate investments and portfolio management. Quite a few top guns at REITs and real estate PE funds have the designation. If you have a real estate background and are looking to focus on the investing/Asset Management side of things I would vote it is worth it.
Agree with liquidpaper; it depends on what you want to do. I have a master's in RE from Georgetown, work for one of the largest PERE shops in the US, focused on acquisitions, and can't recall anyone on my team having a CFA designation. If I dig, I could probably find one or two, and maybe some CCIMs, but mainly people with master's degrees - either in RE or MBA's, especially if they are older. Hope this helps.
Short answer to your second question is no, pursuing the CFA Charter will not be a smart alternative to an MBA (or a specialised masters in RE from a top school).
Given that you are quite experienced (over 5 years experience), your ability to get into the kind of roles that you desire will depend on relationships & gaining experience in real estate financial modelling and deal making (the acquisitions process, due diligence, acquisition finance, RE business plans etc...).
You need to transition sooner rather than later. I think networking + maybe doing a specialised masters in RE part time or MBA in RE part time might be the best strategy for you if you don't have the means or the intention to go the full time route. If you are in New York, check out NYU and Columbia's programmes (both RE and MBA). The CFA Charter will not help you in terms of networking into an RE job given your profile and will not give you the ability to demonstrate RE modelling/deal making experience.
As an aside, I have only met a handful of CFA Charterholders in RE. Most of them were on the LP side, working for large (multi-billion) institutional investors (Pension Funds, Insurance Co.s and Soveriegn Wealth Funds) and one or two in RE research at investment banks.
In emerging markets I do know of a couple of Charterholders who are front office acquisition people, but they got those jobs before getting their Charter.
Also, in order to learn RE modelling there are several short courses and books on this and a few samples on WSO if you want to learn.
What matters for recruiters is experience doing it (you'll need actual experience in order to demonstrate this effectively resume wise) and you might be given a modelling test as part of your interview.
If you get the CFA charter for practicing real estate then you aren't any good at real estate....
HASVING A CFA WILL NOT GET YOU A JOB. EXPERIENCE IS EVERYTHING, IN ADDITION THE REAL ESTATE SECTION OF THE CFA IS VERY THEORETICAL AND TEACHES YOU THAT CAP RATE IS NOI/VALUE, WHICH IS NOT NECESSARILY ALL TRUE. SPEND THE 1000 HOURS AND NETWORK, YOU WILL BE BETTER OFF.
GENERALLY PEOPLE WHO HAVE CFAs WORK IN TRADITIONAL ASSET MANAGEMENT, EQUITIES AND BONDS. YOU WILL SEE THAT IN HEDGE FUNDS PEOPLE DON't ALWAYS HAVE A CFA AND iT IS NOT A REQUIREMENT. EXPERIENCE IS EVERYTHING
Everyone automatically hates you because you used all caps.
Why are there three random letters that are lowercase?
Who says one can't do the CFA and network? (networking is an ongoing thing that one is always engaged in whether they're trying or not.)
Why did I see two posts so close together where each person misused the word "their"?
Fuck.
I am surprised that this topic turned into CFA-bashing thread. I think CFA is not really costly (in terms of money, effort or time) so dropping this opportunity for this reason is quite strange. 1k USD, and like 200 hours - not really a lot for CFA Level 1 but will eventually look good on your CV anyway. Some MDs will find it totally irrelevant (will not be minus anyway!), some will look at it as indication of your ability to learn / acquire large amounts of knowledge, some will like it a lot.
And what I know for sure is that senior people with CFA will definitely prefer candidates with CFA, with other thing more or less equal - this is like a community, common alma mater, etc.
It's not $1k and 200 hours. It's 600 hours and $3k at least. 600 hours in lost hours that could be used in far, FAR more profitable ventures like meeting new people in the real estate business. The CFA charter is totally and utterly worthless in real estate particularly because you can't actually get the CFA charter unless you're getting work experience in a very, very narrow subset of high finance. If you're working in real estate or similar, your work experience likely won't apply to the charter. It's not like having the CFA charter would HURT you, but it's a total waste of time at best. At worst it's supplanting the time that you could be use doing far more relevant things. Again, this is talking about the CFA charter for REAL ESTATE.
I earned it. I would not advise that anyone wanting to pursue a career in real estate investments spend the time or money pursuing it. I was already at level II when I went back to business school and thought, "what the hell?" Passed level III during my summer internship and got to stick it on my resume in the fall. I think it helped a little at the margin when recruiters looked at my resume in a stack of resumes of MBA's that didn't have significant RE experience at the time.
I realize this is an old thread but for anyone else considering it, here's the punch line: It. Is. Not. Worth. Your. Time. Or. Money.
The CFA will only matter if you work for a pension consultant (Townsend, Courtland) or want to be a REIT analyst.
Otherwise, as a career switcher, I'd do an MBA or MSRD. You could always leverage your accounting background and work at firm that will let you do both fin reporting and investment.
MBA in real estate is really a lot of benefits in real estate.In Finland country there are many real estate that has a back ground of mba which result to a good real estate.In part of Helsinki real estate at http://www.onnistunutasuntokauppa.fi/ is been doing well this quarter of year and it seem that they have a nice sales report this 2013 which is amazing.
Paul029, can you please stop plugging your idiotic Finnish estate agent webpage through multiple user accounts?
I would absolutely not get a CFA for real estate. What a huge waste of time. If you want CRE investment training get a CCIM or something.
I'm a level 3 CFA candidate. I definitely wouldn't do it for real estate.
It is worth getting and many people proven about it.In Finland country i seen a real estate at specializing a luxury one at http://www.arvoasunnot.fi/ and the way they sell and plan for their real estate is really something unbelievable.
I have my CFA and my MRICS (Member of Royal Institution of Chartered Surveyors). I work in a REIT as an asset manager. The long and short of it is that the CFA gives you very good finance skills, which is useful for the investment analysis piece of real estate Asset Management, but gives you zero exposure to leasing, development, property management, etc. The CFA is not going to teach you what HVAC stands for or the difference between a truck-level and drive-in door is.
If you want a career in real estate from the academic ground up, I would suggest getting a Bachelor in Real Estate and go from there. University of British Columbia has such a program and the course material rolls into the AACI designation (appraisal institute in Canada). You are better off pursuing real estate specific designation vs a CFA or MBA, if your intent is to work in real estate.
The finance piece comes in handy because your typical leasing or property manager is unsophisticated when it comes to numbers. However, the finance knowledge you gain from the CFA is overkill for the typical real estate job, until you get to the most senior level portfolio management jobs.
Goal: real estate analyst entry level pos, Paths: Go back to school for MSF or pass CFA I? (Originally Posted: 03/25/2015)
So my goal is to obtain an entry level position as a real estate finance analyst at either a bank, REIT, PE firm, or REIB. However, my degree is in Business Marketing (grad. 2011) and its from a non-target school in California. I've been preparing for my GMAT, which is on April 9th and I've been applying to MSF programs such as: Claremont Mckenna, Univ of SF, Univ of Arizona, and Pepperdine. My goal is to stay on the west coast, therefore, that's why I've picked all west coast schools. However, my friend working in IB brought it to my attention that I could just go rouge and try and just break into finance without a masters in finance. His suggestion was to study and pass the CFA level I, networking of course through the CFA conferences, and attempt to land a job that way. My primary concern is that a CFA is relevant for Asset Management and hedge funds. I suppose the Fixed Income section of the CFA would be relevant to real estate finance, but I'm not debating whether or not I should invest the money to go back to get a masters or just spend a year study/networking through the CFA? I of course took my econs, calculus, fin/cost acct, and statistics classes in college, but in the last 4 fours out of school I've been working in various fields, not necessarily related to finance. My first job out of school was A/P for Bank of America Home Loans (formerly Countrywide), then working in IT writing SQL, and currently I'm working as a marketing analyst, using data to make informed campaign optimization decisions. I want to help market myself better to financial firms by getting a masters, but total cost would be $45k tuition, $15 living expense, $6k food, etc. + the cost of my salary.
I apply to financial internships, but never get a call back and it makes sense. There are most likely people much more qualified than me applying.
So once again, my goal is real estate finance. Should I go back to school or study for the CFA level I and hope to break into an internship/entry level analyst role?
Have you looked at the MSRED/MSRE degree?
CFA for Real Estate (Originally Posted: 02/23/2016)
Hi fellow monkeys,
I am actually a senior analyst at the valuations & modeling team at a B4, and I really like the real estate projects that I'm working on. I am also a level 3 candidate to the charter, and I was wondering... Does the charter add any value if I decide to focus on the industry? I guess potential exit opps are REITs coverage as equity analyst, corp finance in a real estate arm (such as JLL or CBRE), or even a REPE.
If anyone suggests any book or course that can help me on improving my knowledge, that will be much appreciated.
Cheers!
It's not necessary at all, but if you have the CFA designation it will definitely be a feather in your hat. Might as well finish it up.
I'm studying for the CFA. I never thought it was a bad thing to be intellectually curious and have a desire to be smarter. Plus the smartest guy in real estate that i have personally met and interacted with has is a charterholder
Cool mates, thanks for the answers!
Most of the knowledge you get from the CFA material isn't relevant in real estate. With that said, as previously mentioned, it is a feather in your cap. It shows your committed to continue learning and you can balance work and self study.
Finish it.
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