Advise on what I should do next in my career - Please Advise
Hi everyone,
Hope all is well with y'all!
If you guys could provide your inputs, it would be greatly appreciated!
Backstory for context:
I've been a CRE only Broker since 3rd Yr of University and Today marks my 4th year as CRE Broker.
- I got a Business Administration degree from a complete non-target school with a 3.7 GPA.
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I also finished with an Applied Statistics Minor as well - with a 3.5 GPA.
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I also completed a Year Long Computer Programming certification as well.
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I sold a good amount of real estate and participated as an LP on 2 smaller development deals.
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Today I stand at around $600K in total cash.
My long term goals are:
- To build a holdings company comprised of real estate related businesses (ie - Property management, RE tech, Logistics, Utilities, etc)
My questions are:
a) Should I pursue an MBA and/or CPA license to sharpen my analytical skills? So that I can then go join a Private Real Estate Equity Firm? OR Should I pursue an Engineering degree?
OR
b) Should I try to land a position at a lower mid market PE firm and grow from there?
OR
c) Should I use the cash I have and buyout smaller RE companies and grow from there?
OR
d) Should I continue growing my earnings as a CRE Broker?
All inputs are appreciated! Thank you!
Such ambition! Not sure how much the monkeys of WSO will help, but I do hope you post updates as often as possible. Just an idea here: Nearly all family offices invest in CRE, and the smarter ones have their own real estate platform where they are GP. I'm sure there are a number of family offices itching to have someone do the work for them of setting up + vertically integrating the many components of a principal investor. FO's that aren't CRE savvy have to rely on funds and pref to get exposure to the asset class. Someone like you could provide a great deal of value.
Hmm something to think about for sure.
If I'm reading it correctly, You're saying that I should think about raising a fund from Family offices that don't have a dedicated real estate investment platform?
Interesting post (fellow WSO'ers... take note, good use of detail and info!).... tbh, not sure really what you are wanting to do, so consider this my random thoughts based on what you posted. May be useful, may be useless, but that's the bargain you accept when asking internet randos to comment on big life decisions!
To your questions...
a. Why would you want an MBA or CPA? Only clear reason is to make a jump to the 'high-end' institutional world of CRE, in which case do it (the MBA, only do CPA if you want to do their taxes). Engineering? That's out of left field, not sure why/interest (I'm assuming makes some sense to you).... you are a successful broker (at least as you seem to present it!), why go the programming/engineering route? Again, seems personal... but I seem to think you know which side of the equation you sit!
b. Maybe, you should at least network and apply into that world. Until you have a live job offer to consider, this is too hypothetical to comment upon. Do learn more and understand the world/landscape, will probably make all this easier.
c. Dude, you have $600k.... what on earth could you buy with that? Keep your powder dry and accumulate more liquid assets, may be a time to use such liquidity to fund a venture, join a partnership, or just float your living expenses during start-up times/bad times. Cash is optionality, and you don't have near enough to do anything worthwhile IMHO. Plus, this is an industry where you exploit excess cash (aka dumb money), not rely on your own. And until you have the track record/resume to be legit in raising money, don't use your own (personal opinion clearly!).
d. I mean, yes, until you have a better idea. Clearly the idea of being a lifetime broker must not excite you, otherwise you wouldn't have made this post. Not sure who your client base is, but the easiest path for brokers to "go buyside" is to go work for a client, or competitor of a client. If you want to transition, just do it. Until then, make that cash!
Questions for you...
1. Are you just bored with brokerage (understandable lol)?
2. Are you curious about the 'institutional' world and what it's like to really work at those big names? (this motivates a lot, see all WSO posts...)?
3. Are you sure about real estate? You mention programing, CPA, engineering... is there something else (not that I or this forum could help)
Anyway, keep having fun figuring it out!
Hi,
Thank you for a thoughtful response and transparency! Much appreciated.
a. Why would you want an MBA or CPA?
I feel like my undergrad didn't provide me with enough analytical knowledge and I sometimes feel I would be much more analytical and have stronger problem solving skills if I pursued a STEM related degree. Most successful CEO's are engineers and I sometimes think I should pursue it.
b. Maybe, you should at least network and apply into that world.
Yes, you're right. I'm still in process of building a network and meeting people!
c. Dude, you have $600k.... what on earth could you buy with that?
Haha, Thank you for this question. So over the past year I've been speaking with many Lower mid market business brokers and smaller M&A firms.
Many have told me they've been seeing and selling/buying for their clients deals that gross a 30% ROI.
They've told me a few ways to use that $600K
i) Buy minority stakes in an Owner Occupied business. For example, a utilities distribution company in my city.
ii) Or buy $2m - $4m worth of businesses. For example - I've seen about 3 different property management companies that manage about 1,390 multifamily units.
iii) OR buy class B self storage facilities that run around $1m-3m per large facility in secondary markets.
- Regarding using other people's money. From my POV, I ultimately feel like I need to firstly use my own capital on 1-5 small deals and build that track record and experience. With my own capital I would have much more control and freedom to run my acquisitions as I wish.
I'd rather lose my money than lose an investor's money, this is because If I lose it, it'll crush me and I can come back harder.
d) I know of 3 client's (all 3 manage about $2.7B of real estate) I've worked for and have a good relationship with. I think they'd take me on as an acquisitions guy.
Questions for me from you...
1. Are you just bored with brokerage (understandable lol)?
Answer: Yes, haha, I want to build equity and have holdings. In the world of brokerage, the respect is not as high either.
Being a broker won't allow me to build a strong business... Unless I build a CRE M&A firm. I thought about this and still exploring this idea.
2. Are you curious about the 'institutional' world and what it's like to really work at those big names? (this motivates a lot, see all WSO posts...)?
For me it's not about working for a big shot firm, this is because larger firms would work on buying businesses that are very large and that knowledge isn't too applicable to the smaller businesses. Also, I want to build a portfolio for myself. It's a personal reason.
I'd rather go work for a mid market or Lower mid market firm and learn the nitty gritty of deal making and achieving higher yields.
3. Are you sure about real estate? You mention programing, CPA, engineering... is there something else (not that I or this forum could help)
See part A above.
well... in the fun of it.. my reactions/responses
a - I get what you mean on wanting to prove up academically, still only go back to school for strategic reasons would be my advice (so for CRE... MBA, MSRE/D, maybe some MSF), a strategic reason would be to go for "high end institutional" jobs (like what is discussed on WSO all the times). I wouldn't go become an engineer unless you really want to be an engineer... sure, many (at least some, I wouldn't say most) CEOs have engineering backgrounds... but most engineers do not become CEO.....
b - agreed
c - If you want to own gas stations or the corner store, hang with the biz brokers (and trust their "ROI" projections lol)... not my interests... you do you. I'm joking but serious somewhat... if you want to play in that world, play in that world... if you want to have a run at the supposed "high end" of CRE, likely a distraction of time. Tbh, you may make more in the "middle/private" market, glamor and money are not always linked! Just know going that route will probably preclude the other (practical reality).
d - might as well start there, if you think worthwhile places to work. Easiest route, and prob don't need grad school. Won't be easy to leverage up for "top tier", but thats only if you care... you can make tons and be happy without!
other questions I posed...
1. You probably should exit brokerage sometime soon, you won't be first or last, if you are this far lost in thought, might as well remove the band aid at some point!
2. You are correct, working for the big shot firms is not ideal at all for "going on one's own" (sorry WSO'ers...), overall i'd just say I agree with your assessment
3. only advice... don't "pigeonhole" yourself to real estate for entrepreneurial thought... people do leave it and do other things, so think as wide as you like
Have fun!
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