Break into RE from IB?
Currently in IB at a BB, within a coverage group. Have realized I don't have a passion for my sector coverage or plan to have a long term career in banking. After my analyst years, would like to follow my true passion and go into RE investing. I have some residential RE experience in smaller markets. Also get some real estate exposure through my sector coverage. Would love to hear view on REPE or other areas, how to transition into real estate, and other insight. Cheers.
Based on the most helpful WSO content, breaking into real estate from investment banking is definitely a feasible career move. Here are some insights and steps you might consider:
Leverage Your IB Experience: Your current experience in investment banking, even if it's not directly related to real estate, is valuable. Skills in financial modeling, deal structuring, and due diligence are highly transferable to real estate investing.
Network Within the Industry: Start building relationships with professionals in the real estate sector. Networking can provide insights into different roles and companies, and can often lead to job opportunities.
Educate Yourself: Consider taking specialized courses to enhance your knowledge of real estate. Courses in real estate modeling or an Argus certification can be particularly beneficial.
Highlight Relevant Experience: Use your residential real estate experience to your advantage. Tailor your resume and story to highlight how your background and interests align with real estate investing.
Explore Different Real Estate Careers: Real estate private equity (REPE) is one area, but there are also careers in real estate investment banking, corporate banking, asset management, and more. Research these areas to see what aligns best with your passion and skills.
Consider an MBA: An MBA with a focus on real estate can provide a structured path to transition into the industry and offer valuable recruiting opportunities.
Remember, the key is to convey your passion for real estate and to demonstrate how your skills and experiences can be an asset in a real estate investing role. Transitioning will require effort and may not happen overnight, but with a strategic approach, it's certainly within reach.
Sources: Move from Accounting to Real Estate - is it possible?, Switching from Big 4 to Acquisitions: My Story, Real Estate Q&A, Real Estate Q&A, Moving from Asset Management into IB / PE
Bump
Used to be super interested in RE. You will be super fine recruiting for REPE shops. Are there any specific firms that you are targeting in general?
Yes, lots of RE shops in general like to see 2 yrs IB experience, so you’ll be fine. The only problem you will run into is lean teams. There isn’t a “recruiting cycle” for REPE. The firms run lean and once people are in they typically don’t leave, and they don’t need tons of employees to do what they do. So networking is your best friend.
Also, you’ll take a huge pay cut. Most firms honey dick and justify this because of the “skills your learning”, “people would kill for this job”, and “RE is a long term game that grows later”. Unlike BB banks that just pay you a 150-200k total comp 1st yr, and you feel good about it. REPE probably will be 75-110 TC 1st year. Make sure you get commissions/bonuses/fees in writing and the salary you’re ok with off the jump bc it doesn’t change much as the years go by, and no one in RE is getting an 80% bonus.
I don’t get why you IB guys leave. The pay is so much better in your path. You’re not gonna swap to an REPE associate and make 300k as you would at some MF in traditional PE. Different culture.
This is good feedback for the original poster.
Also something to consider and do some research on - what do you want to do in real estate? It's a multi-faceted discipline that spans across functions including leasing, property management, asset management, development, project management, investment sales, equity capital markets, debt capital markets, acquisitions, dispositions, and much more. Also consider what type of firm you'd like to work at - small, medium, large, or mega? Local, regional, national, or global? Public or private?
Regardless, investment banking backgrounds are looked on favorably, especially within the mega, private, global firms focused on investments. Perhaps less so on the medium, private, local firms focused on development. So really just depends on what you're interested in.
You're right that RE doesn't pay as well as traditional PE, but your TC estimate is low, unless you're thinking Tier II markets. REPE in NYC with 2 year IB experience will get you at least $150-$200 all in year 1 at a larger fund. Even the small shops will pay you $100-125K base with a 25%-50% bonus. also, I've seen all in comp double or triple in 5 years in RE, which is a decent change, imo.
That’s fair. Yes, I was thinking more across metros like Dallas, Chicago, Charlotte not NYC (I work in one of these). When I look in the NYC market base comp isn’t much more than here especially considering the jump in living expenses.
I just look at it as I had to work 3 yrs to get what an IB kid gets out of college in NYC. Traditional finance just seems to always pay more, but with RE it can be justifiable since it’s easier to go off and do your own thing after a while, I guess.
I’d just tell OP to look around see if anything sounds worth it. I think most ppl go into RE bc it can be fun since the projects are like art as well as finance in a way, you can visit the projects, and supply a product that helps a community/tenant. (ie help deliver/buy/upgrade a ultra lux hotel that brings in tax dollars that you can also go enjoy yourself with perks since you worked the project etc)
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