In hindsight, what type of role would you have STARTED OUT in?
As a senior in college, I'm hoping to be narrowing in on a position by the time I graduate in May. I've been doing a lot of networking, and my focus has been on firms with great reputations in my target market... really just trying to meet and speak with the smartest and most successful people I can. I'm finding that I can't seem to find a specific role(s) that I want to pursue.
I think that brokerage could be a really exciting opportunity and I love interacting with people, but as a Math/CompSci major I also enjoy more analytical type assignments and could see myself in a role that would involve more modeling exposure, etc. I also feel like building those modeling skills would be huge for increasing exit opps, but those roles seem fewer and farther between.
So my question to you guys is this... given the chance to do it over again (within CRE), where would you have started out in the industry? I know that real estate is a massive industry and ultimately each starting point is probably better for a particular end goal, but humor me.
Acquisitions at a big shop with large capital source
Acquisitions
I probably would have focused on raising capital for alternative investments (i.e. real estate funds)
Started in brokerage (ended up in development) and wouldn't do it differently, IMO. Brokerage hammers home some really important ways of thinking, including a) how to sell/present effectively (applies to tenant presentations, investor relations, pitching a deal to a lender) b) what tenants actually want and care about, c) being able to identify and call bullshit on information provided by brokers and other sources. In my experience a lot of guys who started in acquisitions are great underwriters but don't understand well enough how options affect value, how a broker's assumptions may be misinformed, how to sell/position a competitive set to get a deal approved by IC, etc. Conversely, a lot of development guys get too stuck in the weeds on issues that tenants could not care less about, like the type of elevator jamb or restroom light fixture.
Most importantly--working on commission completely drills down on the concept of defining how much your time is worth per hour. This can help you avoid chasing bad deals, focusing on petty details, etc.
Started in brokerage as well. Great place to start but have a game-plan to get out. It's easy to get locked in because there's always another fee around the corner. "Oh, I'll leave just after this next one closes" then in the meantime you list another big deal...
One other thing IS brokerage does for you is help you keep the end buyer in mind. If you build a 30 unit apartment building in Western Massachusetts and underwrite it to a 5.5cap exit because that's what 200 new units have sold for you'll get hurt because there aren't institutional buyers for such a small product. I see new developers doing that nonsense all the time and then they're stuck with a small project that they don't want to manage for the long term.
But another way that's great to learn is as a development associate at a small shop that has good deal flow. Tough to find and you need to network into these opportunities but you'll learn the most and really learn all aspects of the business quickly.
I was lucky enough to start in Acquisitions and move up from analyst to associate.
That being said our shop is small so I kind of get a taste for everything: acquisitions, Asset Management & fund raising.
To me being in a smaller shop where you have to wear many hats is the best way to start. Become a jack of all trades.
Magician.
Ibanking
I came to development from the consultant side. In hindsight there was a cost to this (lower early career income, different professional network), but there have also been clear benefits. It's easier for me to manage large teams from diverse backgrounds, to understand technical issues, to analyze SOW's and catch missing/unnecessary work, and to make cost-effective decisions that really makes our projects stand out in the marketplace.
If I could do it again, I would probably have made different decisions about where I spent my junior years, but I would not start out in IB or acquisitions, for example. In fact, I may have gone into a design/build construction firm. I have learned financial modeling/underwriting on the job, and can always get additional support from our analysts if necessary. I love my job because I love building, and I would be a weaker developer if I had come from a RE or finance background, for example.
Would have recruited for a smaller shop where you would gain exposure as opposed to a BB.
I started in market analysis, then brokerage, then went to operations/management, then acquisitions, then development and I hope to end up in development after I graduate my masters program.
I'm 29 and $100,000 in debt as a result of my meandering path, when, if I knew then what I know now, I probably could have made it to development if not right out of the gate, but a year after.
My advice? Don't worry about your first job as much, but spend that year figuring out what in the industry you want to do and then do it as soon as possible. Otherwise you'll wake up at almost 30 and be where you should have been 7 years ago.
I am already there, though it is a lot easier to talk to people as you age. It is easier to break in when you are younger, where you do not have a lot of dependents. But since most broker positions are commission only, making ends meet makes it harder to go into the industry.
Doing analysis and brokerage to start out with has been a pain at times and a blessing other times. It allowed me to carve out my property types and deal size without having to immediately pigeonhole myself, which could potentially happen in an acquisitions role.
If I did it over, I probably would change my major and shoddy internship experience over my first job choice.
It's all relative though, I always wanted to break into a development role and that's been my goal since day 1.
How do I identify small shops contra medium sized shops? I know that BBs are definitely not small.
I'm likely one of the older guys on this board so I've had a number of real estate jobs (including development) and been through a couple cycles. My take after 25 years is that the most critical thing you have to understand if you're going to be successful in any part of the real estate industry is EQUITY -- who has it, where to find it, how to attract it, what it expects, how to structure it, how much control you give it, etc. Everything else on a deal falls into place easier when the equity equation is solved. That said, I think it would have been very valuable to have been a production analyst on a capital markets team, especially a bigger shop like a CRBE, Eastdil, JLL, HFF, etc. where you get to look at a ton of deals in different areas of the country, understand the deal rationale, the structure of the capital stack, etc. Not only would the exposure to different asset classes, a variety of sponsors and geography be helpful but you might also get the opportunity to participate in deals as an investor as well. I know several successful local sponsors who invite "friends and family" into deals for as little as $25k.
Born white and wealthy. That would have done the trick
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