Old User Looking at New Opportunities in RE - Help?
Good morning all,
*--------------------------------------------- Introduction on what am trying to do ---------------------------*
Long story short, I have been working in my current front office banking job for a while now; and getting a bit tired of it. I have used this forum in the past, so I am not a brand new monkey; but to avoid my employer knowing that I am potentially looking at other opportunities, I've re-created an account specifically for this purpose. (I check WSO at work, and wouldn't want them to stumble on this post...)
I absolutely love real estate, dabble in it by buying whatever the bank will loan me the money for etc...; and I am quite fascinated by it. However, I was told that REPE is completely different, and buying a lower ground basement is quite different than re-developing a whole district...
I will be meeting with a partner at one of those funds (think Morgan Stanley Real Estate Investing), and instead of sounding like an absolute idiot, I'd love to get some of my answers answered before hand. (I'll be browsing some more, and some of my questions might have already been answered, so I apologies in advance)
*-------------------------------------------- End of introduction ----------------------------------------------------*
Questions:
1) Capital, in PE you usually pledge a bit of your capital when you join. How much in dollar would the minimum amount you have to put in the fund usually be. Or is that something usually at the partner level? (I am at a VP/Director level, but I would expect to start up at the associate level if I were to join)
2) It must be rare, but have you seen people NOT in corporate banking lateral into REPE? What were their career paths?
3) Studying for the CFA level III, and should pass in June; is that of any help in this industry? People give a fuck about it? (No one does in what I do, but I was bored at work so decided to give it a go)
4) A couple of my friends do Real Estate on the sell side M&A, how similar is it to the buy side? (I'll be talking to them as well, but figured I'd ask WSO's opinion first...)
5) How technical does it get? Or is there a lot of "flair" in deciding whether a project makes sense? (Let me rephrase) - how much checking out buildings and believing this is a growth area is there vs. taking the project down and splitting it in smaller chunks on excel to see if it makes any sense?
Anything you think might be relevant for me.
I'll be back with more questions.
Thanks
PS: this is not a light choice, and if I were to make the change I will need to make sure it's 100% for me. Going from doing well as a Director back to Associate in unknown territory is not an easy choice, the salary cut will probably be very painful as well ...
Thanks for reading and answers prospie!
1) A fund like Morgan Stanley you want to work for won't look for you to put in money--only a smaller partnership you start (where you are a principal) or similar situation should require this. And if you can write a check big enough to participate in a Morgan Stanley deal, you don't need to work for them! 2) Many paths, but usually a good reason. Commercial RE lawyer, for instance. Look at bios on principals from major RE players (Blackstone, etc.) and this will give you the best example. 3) Can it hurt? CRE is very finance driven--as you know. My guess is that it proves you can do the math, (as many of your competing candidates can do)--you will have to prove specific RE knowledge as well. 4) Not my background - Pass (sorry). 5) Both "soft" and "hard" sides of RE matter, but depends on firm's strategy and type of investments. For instance, in hotels , generally the "soft" side matters (your Four Seasons should look nice for the price you are paying), but doesn't (usually) in industrial. However, if you are developing lots of Motel 6 properties, the look is less important 6) One other note--make sure your story is strong if you are trying to make the jump from director to associate--why should a firm hire you, etc.... Good Luck!
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