Best way of breaking into RE?

I previously worked in Equity Research and I had to quit due to health issues. I had thought about becoming a coder so I learned Python, SQL and a few other technologies with the idea of working remotely. Even though I'm decent at it and have gotten Data Analyst jobs, what I found is that I don't actually enjoy coding. Moreover, I'm thinking ahead to when I'm 50 or 60 and I doubt I'll be employable in any type of coding job at that age. So, I don't want to pursue a technical career. 

A few years ago, I bought a SFR in REO, fixed it up and rented it out. I really enjoyed everything about the process: finding a good target, adding value, and then of course making actual money from it. This is something that I want to do on the side no matter where I work. So, I thought, why not try to get a job in RE so I know about the market. Perhaps it'll make me a better investor. 

Questions

I've read through quite a few threads and I'm curious as to how I would enter RE with my background. I have no formal RE experience. Would I have to go back to school to get an MS in RE? Are there any firms that are known to hire people without RE experience? The closest I think to equity research is REITS but that's not really 100% aligned with what I like. Any ideas of what path I can take? 

I'm located in the Greater NYC area but I'm open to anywhere in the US. 

 
Most Helpful

So are you more so interested in real estate because of what you were able to do with your side business and want to continue with that side business and possibly grow it into your full-time business? Or are you interested in real estate finance/development? I'm asking because what you did for your SFR is very different than what you will do for a real estate firm. Some finance was involved in your SFR project, but most of the work you did was more so project management (managing subs, ordering materials, etc...). When you work for a real estate finance/development company, your job is really going to be sitting behind a desk and playing in excel (Development is less repetitive because will hopefully also work on entitlement/design/etc.., but it is still a desk job), especially since you are likely to reset as a junior. You won't really be sourcing deals or strategizing value add (at least not for a while). For the first ~5 years you will be an excel monkey.  The institutional experience/knowledge you will gain by working for a large real estate company won't really help you in your SFR business. It won't really even help you scale. If you want to scale, your biggest hurdle is capital that allows you to pursue larger projects. Even working for an REPE company to learn how to raise a fund won't help you because that REPE company is able to raise capital due to their successful track record and reputation. As for learning the market, it doesn't take years at a REPE/development shop to learn how to look at comparables, follow gentrification, follow the development, follow transit expansion areas...also these these larger shops create their own market by investing hundreds of millions into developing mixed-use buildings that will attract people...you won't have the ability to do this even if you learned how to. If you are interested in real estate because you enjoy raising capital and deploying it into real estate investments or working on entitling land and managing the development from a high level, then by all means try to lateral into a real estate firm (learn how to model real estate/network/ etc...)

But if you are interested in real estate for the purposes of your side business and you are interested in finding good SFR/duplexes/triplexes deals and renovating them to sell/rent on your own, then I don't think you should switch industries. In order to continue/grow your side business and hopefully turn it into a full-time thing, you need to maximize your income so that you can save up for down payments faster and have the income to support larger loans. If you switch industries now, you will likely see a pretty steep haircut in pay.

 

Thanks, that was very helpful. I don't mind working in Excel or starting over (largely because all of my savings will go into SFR investments, which will start paying off right away). But what you wrote about the actual jobs in CRE is extremely important. I actually made my investment after taking Real Estate Finance in my Master's in Finance program. That was my favorite class in the entire program. The way I look at it is that by working in any of those positions, I'll understand "the market" better. And I've noticed lots of start up PE shops with $5-100MM investing in SFRs now. In the beginning, it's really hard to even get a few million but if you have contacts, I'm willing to bet it's a lot easier to attract capital. Much easier than if I were slowly building my asset base working with a regional bank, for instance. 

 

If you are interested in real estate for real estate, then definitely go for it. You'll only be great at some thing if you love it. Just make sure you're not switching into this industry because of the dream to raise a $100mm fund. You should def have big dreams and aspirations, but everyone on this site talks about raising a fund or developing 100 units., but the truth is 99.9999% of them will not achieve this or anywhere close to it. I used to dream of developing multi-hundred units when I was in college, but now that I am actually doing deals on my own, I know what it takes to reach that level and the truth is it likely won't happen in my life time. The real world has reduced my dreams to just owning a decent portfolio of sub-20 unit properties...which is still great. It's great to dream big, but you also have to think about what you can realistically achieve. Maybe the more realistic dream is just owning a portfolio of SFR/Duplexes/Triplexes, collect rent, and retire.

 

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