Best job route to make the most money in CRE
I am an intern at a small boutique CRE firm in the midwest and about to start my final year in college. I am just wondering what route is the best to go (brokerage, analyst, or developer) and what an ideal career path would be?
Whatever fits your skill set.
You can make money in real estate doing all sorts of random things, but you have to be good at it and you only get good when you’re engaged and interested.
You are an intern. Focus on getting some experience first, regardless of what that experience may be. You’ll find out what you enjoy and what you don’t as well as what you’re good at and what you aren’t soon enough.
Own your own company whether it is development, B piece buying, etc.
Arson. Take out insurance policies at inflated valued and then burn down the buildings and collect the proceeds.
I honestly love the transparency here, young one.
My guess would be an MF REPE or REGAL IB starting out then either swap over to a senior acquisitions role with a well-capitalized development shop or raise your own fund. But, these outcomes are rarely attainable, seamless, or linear in CRE.
Build a time machine and have your Gpa buy a bunch of infill industrial in current T15 metros.
For short to mid term career - (1st) REPE fund (>$1b AUM) or Real Estate IB, (2nd) Capital Markets / Investment Sales brokerage on a high powered team or Developer/Operator/Fundless Sponsor (3rd) everything else - other intermediaries, consultants, service providers
For long term careeer - running your own business / your own portfolio. Could achieve 7/8/9 figure net worth through any of these. Have seen even guys who run leasing brokerage / tax consulting firms achieve this. Obviously lots of developers and investment firms as well. Common denominator is ownership, save for the commission-only broker pulling in $5-10m+ of fees for the firm who’s technically an employee
I'm a newbie - Why is REPE fund only good for short to mid term career (burn out quicker)? Are Tishman Speyer and Related considered REPE funds?
To clarify - I do not mean that those listed in the “Short to mid career” section are bad places to work. They are great places generally to be for an entire career. However the question was about maximizing comp, and I think a successful entrepreneur in the second half of their working life typically out earns an employee. But it’s very difficult to compare as each has their own considerations. I was attempting to chart out what I think is how to maximize comp at each stage, however this is nothing more than speculation.
And those firms might raise closed-end PE style funds. I still think of them as developers as that is their main business line. However it would not be dishonest to say you work in REPE if you are working for the investment team at one of those type firms and you are deploying a closed-end value add / opportunistic fund.
Worst question you can possibly be asking. This will lead you down a road of career changes and unhappiness, ending up in a role you hate by 40.
Yeah god forbid I want to have a mental image of what a career path looks like before diving into head first...
Re-read your caption and then come back to me.
You didn't ask for advice on varying career paths. You asked for the ideal career path to make the most money. The obvious implication is that if there was such a thing, you'd... dive in head first.
If you ask a stupid question, you should expect these kinds of answers.
The correct answer is above about fit and skillset and interest because there is no way to answer this in RE
You can make money in a number of ways but the reason there’s no good way to answer this is a smart guy at BX could make less than some entrepreneurial rando who sweat his way to a $3M promote on a rinky dink dev deal then used the gains to do more deals and it snowballs. Same goes for a top originator, IS guy, leading broker and so on.
If you asked me the “safest” way to give yourself a high floor it would be the IB > MF > MBA > MF path but idk if that’s the best way to set yourself up for entrepreneurship, which is the highest ceiling play. Theres just not one answer unlike other fields.
I recently gave a virtual talk with college students in Japan about careers and grouped my life and career into buckets of 7 year cycles. The students weren’t RE majors so I kept it high level and broad - it’s also international so I have to be even more relatable and relevant.
I'm 42 so I’m heading into a new cycle and divested in pretty much everything from the past cycle. I feel untethered, seeking new motivations, and focusing on contentment. Charlie Munger once said in a podcast, “you only have to get rich once” and that resonates.
So, for your “get rich once” plan:
21 - 28 learn and grow, care mostly about yourself, adulthood finally
28 - 35 middle management, maybe first time parent
35 - 42 further career progression, maybe entrepreneurship (especially if you get let go from job), maybe experienced parenthood (child #2 or you’re in your grove with child #1)
42 - 49 Mid Life Crisis (where I go from here is an unknown)
Of course everyone is different, but if I’m giving advice to OP, I’d talk about remaining Time, the resource we have the most of in our minds early in life.
Spend the next two cycles (21 - 35) getting really good at what you do. I don’t care if it’s property management, construction, finance, brokerage, acquisitions, development. Earn a good reputation. Find a niche. Then, go out on your own in your 30’s - here’s the kicker, go out on your own twice.
Your first venture, because you’re the young guy in the partnership, and real estate takes a lot of money, you’re going to get a smaller percentage of the business. But you learned how to be successful at starting up, and how to scale to $X million. Good enough. Most RE businesses do not require the founders to dedicate all their time to the business. There’s enough leverage to not require that. If the economics of start up #1 isn’t the end all be all, start working on #2. Of course this all happens accidentally.
Your second start up, you’re wiser. You negotiate for a bigger piece of the business. You bring more to the table. You know how to position. You bring skillset leverage. You recognize momentum and timing. You’re still the young guy. Maybe you have more financial success.
If the second try doesn’t work, try again until it does. Others say “shots on goal”, I agree. Life is beautiful in this way - always keep your delusions. When I buy a lottery ticket, I don’t check it for days. That feeling is what you’re really buying.
Seven year cycles. That’s the most accurate advice I can give to the broadest group of people. We all deal with Time and age together, in our own ways yet it’s pretty predictive.
That’s it.
Truly well said. I remember when I was talking to a group of analysts last year. All in their early 20s. I asked them what their long-term plans were. Half said they want to be in REPE as MDs and the other half wanted to start their own firms/funds. When you're young you have ambition and a clearer path. However, as we get older, we then begin to get tired and life gets in the way. We get married and have kids. We have other priorities. I'm honestly exhausted everyday after working and then spending time with my kids. I don't ever want to be a MD at some REPE shop in NYC. I'm happy living the the suburban dad life.
What's my plan? I'd love to own 3-4 small net lease retail centers in decent locations. Nothing fancy or huge. Letting them cash flow, keeping a reserve balance in place for TI/LC, and then just sipping pina coladas on the beach. Don't care about being a billionaire. Life's too short. Doesn't matter if you have a billion dollars or twenty dollars, we all will succumb to time.
Feeling this big-time these days. The people living like this are consistently the happiest people I talk to on a daily basis, and has really reset my long-term priorities. I could care less about building the biggest building or working at the biggest firm anymore. That lifestyle is stressful, rigid, and risky IMO.
Envious of these folks sitting on low/no leveraged cash flow that more than cover their lifestyles, and couldn't be bothered by the current market challenges. This is my goal to achieve during this next market run-up (whenever that may be).
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