When should I break off on my own & how should I do it
Currently I go to strong target and will be working at a MF postgrad in an acquisitions role. I'll likely have at least 5-10 million in accessible capital when I do decide to start my own shop before factoring in my salary.
I wanted to ask with my specific conditions when I should break away and how I should approach that. I know for a fact that I need to be doing something entrepreneurial in the future.
My questions are what would some of you industry veterans do if you were in my position? How much industry experience should I aim to have before breaking off? Should I try to stay at the MF or join a smaller more entrepreneurial shop before? Should I do an MBA if starting a shop is my ultimate goal? What should I keep in mind over the next few years? Will my background make fundraising significantly easier?
Just buy a few SFR cash right now with the money.
The best way to learn will be doing your own deals. Yes there are more nuances and complexities to a big MF deal, but the learning experience will be significantly more valuable than spending time doing financial modeling for a MF PE shop IMO.
To your actual question, if your goal is to go out on your own and the initial hurdle of capital isn’t there, you’ll be able to build a resume to access bigger deals likely easier than others.
Thus, go with the position or experience that will most closely mirror the real day to day you eventually want.
Or frankly- just invest in treasuries or low risk REITs and do something you find more meaningful than financial modeling.
what size deals will it be most feasible to invest in ? I don't want to go after lowest barrier to entry deals that I could go after right now down the line
The people who can give you genuine advice on this are not spending time on this forum. Go reach out to them cold, and hope a few will give you time for a call. Even one of those calls would be more productive than listening to the mindlimited corporate slaves on this forum.
I've talked with many people in industry, I think I'm usually just not comfortable asking about potential future fundraising or sharing what capital I have access to
again it would be a numbers game. some will scoff, others will respect that you have a pair to ask, and maybe others will even help you one day
I would think you want 6-7 years of experience to fully see deals and be mature and at an age where you are taken seriously. I'm late 20's and if I see someone who's 24 going out on their own I don't take them seriously at all. It's either clearly family money, but you also don't have any experience or have seen multiple cycles to raise institutional money.
Other way is buying SFR, 3-4 plexes with the money you seem to have access to (assuming it's family?) and build that out and get real experience. It's always funny to me hearing an Associate talking about deals when they've only UW deals in excel, have never put up any of their own money into deals, and have not been apart of many closings. It's like ok you have the lingo but you have no real deal experience and that's most of these senior analyst level employees at firms these last 2 years that have just done reps and no real investment even if it's a big name. Oh it's a $20mm investment, we'll put in $x and get $y sale when in reality it's very complicated and many things can go wrong.
You shouldn't be thinking about fundraising before you've even managed to execute on a single deal.
The most valuable thing you can do is get experience. If you want to be in acquisitions, working for a property management firm would be super valuable, or be an asset manager somewhere. The dirty secret of real estate is that knowing the finance part of the business is totally irrelevant. Get your hands dirty in a building and you'll be further ahead than someone with 30 years at Blackrock
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