Breaking into Acquisitions
Looking for advice on where I should focus my energy in order to break into real estate acquisitions.
I am currently three years out of a non target university with a B.S. in Finance. GPA is 3.33. After graduation, I had a tough time breaking into acquisitions and had to accept a job on the construction side of a REIT.
Since then I have applied to a lot of analyst jobs and haven’t had any luck. Looking for any advice anyone might have to help me become a stronger candidate for analyst positions. Or should I spend more time trying to break into Asset Management?
Break into brokerage first then transition to acquisitions after 2 years
I have had opportunities to get into brokerage. I live in a expensive area so I can’t afford to work for commission. I know it can be lucrative but I couldn’t float myself early on in the career.
Nah man some firms like JLL or CBRE offer base sales plus commission. Try to network your way into them.
If you take an analyst job on a brokerage team you are salaried, not on commission. Plus, the financial modeling you would be doing as an analyst is what acquisitions roles are looking for.
This is the best way. You'll be far more marketable going this path. Many brokerage shops have analyst positions that are salaried. In those roles you'll see tons of deals. For many of those roles, you transition to a salary+commission brokerage position -- then you'll be able to add context to the transactions you saw the previous year and learn the transaction side of the business. By the end of the second year, you join an acquisition team. You'll have a good base of underwriting skills, be able to confidently/eloquently discuss deals, understand the deal process, and have a Rolodex of contacts to source deals from.
What are you doing in your construction role? Seems like a strange place for a finance major, typically those are engineering guys... Do you mean a development analyst role?
I do project management for them. Deal mostly with tenant improvement and vacant space prep projects. I did construction labor jobs while in school to help put me through college. Because of this I was able to get in the door with the intention to move into the acquisitions side. I have considered going the development route since I could leverage my background in construction easier.
If you want to be in acquisitions, you must first recognize that it is probably one of, if not the most, coveted roles in a CRE firm. Good teams are generally lean and people stay put for a while unless they're at a shop that has a 2-year program and they're gone.
With that perspective in mind, you must do the following:
Hope this helps. Why should you listen to me? I broke into Acquisitions and worked my way up. I've also hired about 10 people for an acquisitions role over the last few years.
Thanks for the in depth response! I do need to brush up on my real estate finance. My university didn’t specialize in real estate so my studies were more basic finance.
I have looked into getting a real estate modeling certificate. Do you think this would be beneficial or should I focus on a different type of certificate?
I need to network a lot more than I do. My company does a lot of events with real estate associations. I will have to use this to my advantage and get on it.
Great response and agree with everything you've said! SB'd.
in response to the “why acquisitions question” my answer would be because I want to do my personal investments but I’m not sure if that’s a good response to that question, maybe even be a turn off for some firms because it comes off as I don’t want to work at an institution in the long term. Would love your thoughts on this…
Many acquisitions teams are also asking applicants to build waterfalls from scratch. Useful? Probably not. But I guess their sick of new guys (and gals) not understanding how waterfalls work.
A construction background is definitely an easier sell for AM roles. Would not hurt trying to get an AM spot, seeing if you like it, then trying to switch as it would be much easier to go from AM -> acquisitions than construction -> acquisitions.
Yeah I do think I would stand a better chance at breaking into AM. We work a lot with the AM team. I have seen people break into AM from Property Management so it isn’t a shot in the dark. I have my heart set on acquisitions but if this gets me closer I am all in.
Why is brokerage -> acquisitions preferable to AM -> acquisitions?
I would say it's a combination of deal volume + underwriting skills that you get in a brokerage role that will transfer over to an acquisitions role. You won't really get exposure to that on the AM side. Saying that, I don't know if there's a preferable route. There are other skills you develop working in AM that you won't get in a brokerage role that would transfer over to an acquisitions role as well.
Obviously IS to acquisitions is the more popular/preferable route, but what about D/E to acquisitions?
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