Hey all, Looking for some honest advice and perspective here. I'm 21 and currently working full-time in a Civil Engineering role as a consultant focused on land development projects. My company is one of the more respected shops locally, and even though I’ve only been here a year, I’m getting good exposure to high-level stuff early on. That said, my boss/mentor is super busy, so while he's well-connected and respected, I end up learning most things on my own (not a bad thing).Long-term goal is to do my own development deals.
I’ve been slowly networking with local developers, and I think it's just a matter of time before a role opens up I can jump into. But recently, two separate developers told me I’d be a good fit for brokerage, and one even connected me with a broker. Now I’m trying to figure out which path is smarter if the end goal is building my own deals.
Here’s where my head’s at:
Development Pros: Learn how to actually run projects, more stable income, full cycle exposure Cons: Slower to grow income, thats really all i can think of
Brokerage Pros: Big earning potential, fast-paced, build a strong network fast, lots of deal flow Cons: Income is volatile, not involved in execution, harder to learn the ops side
Would love to hear from anyone who’s got some advice for me. Thanks guys!
If the end goal is anything other than being in brokerage, development is a better career path. You'll learn to do more than one thing. You'll learn what it means to evaluate a project on it's merits instead of figuring out creative ways to lie to your "clients". You'll understand what it means to have skin in the game, to take on risk, to manage a project through more than the 1% of it's life cycle that the brokers touch.
And I think your median earnings in development will be far higher than in brokerage.
Thanks Ozy for the response. What size company do you think would be best for development then. From what I know the people managing the project aren’t the ones actively sourcing land or putting deals together etc. That takes 10 years to build up to in the company’s I know of. I feel like there’s a chance at a developer I could get siloed in to one role, “managing” the project, and see less of the entrepreneurial side. What do you think of this?
You are correct, you don't start sourcing deals from the start. All shops are different, pros/cons with each. As a starting point, I think larger institutional developers is the ideal scenario, gives you more deal flow and will learn a lot. That being said, if a smaller shop has a role, take it. Just getting into development is the first step, don't be picky. In terms fo getting siloed into one role, that is on you. If you show you can excel in all aspects, and eventually bring in deal flow, you won't get siloed. At our shop, some analysts are betting on the financial side, and others on the execution side, they naturally move more towards one or the other as they progress, but at the start they are getting exposure to it all.
I'm not sure what this means. What do you want to do?
"Putting deals together" is a very minimal and frankly unimportant part of development. If you want to look at a hundred deals a year and do that part of it, an acquisitions role is the place to be. Being in development means "managing" a project. Yes, it takes years. You identify a site, get it under control, entitle it if necessary, design the building, put together the capital stack, manage the construction process, lease it up, and when it's stabilized, hand it off to asset management. The two parts you mentioned, at the beginning of that litany, take by far the least amount of time, effort, and skill.
Again, I think you don't have a great grasp on what developers do. The "entrepreneurial" side is the risk mitigation side, in my mind, and that's everything that happens once the ink is dry on the land acquisition. I hate to say it, but the stuff you seem to want to do is stuff you won't ever get to do, reasonably, because that's not what anyone needs. Of course everyone wants to be a dealmaker, to be the one making calls all day and signing multimillion dollar deals, to be the guy who gets up on panel discussions or who gets their name in the paper. But that isn't development. That's being the owner of a development business. Development is going in front of community boards or local zoning commissions. Development is sitting through hours of weekly construction site meetings, or spending months doing the same with architects and engineers to get a set of CDs and the value engineer them down to the lowest possible cost basis. It's allocating costs on your requisition to your construction lender, or negotiating term sheets with your perm financing partner.
You want to do the sexy part, which is understandable. So does everyone else. For the most part, so do the people who own and run the companies you'll work for. You simply won't get to do this until you're very senior, because every other person in the entire industry wants to do it too, and you need to prove you can actually do the meat and potatoes of the job itself before you can graduate to doing the non-value add parts of the job. Mind you, this is the same in brokerage - you'll spend most of your early career populating deal rooms and answering buyer questions and putting together the OMs, not flipping through your rolodex and playing one buyer off against another.
You forgot this one:
If you’re lucky, you will lose it all several times. Every time you leave your employer. Every time the cycle turns. Every time inflation, covid, interest rates, politics, tariffs. You don’t want to be that guy only seeing it 1.0% of the way through but taking 1.0% of the project cost at close. It’s just not the best career path.
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I’ve also figured this, I haven’t worked in brokerage and know it’s completely cut throat but I feel like I’d really enjoy the environment. Obviously no way to tell other then making the jump. I’ve saw CRBE fucked up on that bonus. Anything ever come form that?
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Interesting, I’m considering a pivot to development from banking. Was hoping it would be a slightly better lifestyle (less weekends, fire drills, vacation interruptions, late nights) but your fire drill comment makes me think that’s not the case…
I have an MRED, but haven't "broke in" yet, and have been sitting on the sidelines riding out this cycle. I'm in a slightly similar boat to you, as I've explored multiple parts of this industry. Many of the CRE roles aren't for everyone, so you'll need to figure out which types of problems you want to be solving, what you want to lose sleep over, etc. That's every industry
Brokerage, broadly speaking, can have the lowest barrier to entry. I suppose it depends on the firm's structure, but when I spoke with Matthews, the "working" hours (ie time on the phone was basically 8:30-5. However, most people were arriving by 7am-ish to prep for the day ahead, and would stay much past 5 to knock out admin, etc. I can't recall if they even paid a "salary" but the bulk of your income in brokerage comes from commission, which might take 1-2 years before you make any type of reasonable comp. If I'm off-base, someone please correct me. I can't comment on the culture of a JLL, etc, but guys I know who were analysts at HFF in a major sun belt market, and said they worked 10-12 hour days as an analyst... so not quite banker hours, but not far off. I don't have experience there so, again, someone correct me if I'm wrong here. Ultimately you're hunting for deals all the time in brokerage, and you'll become a local market expert in a specific product class.
Regarding development, bigger shops seems to have a Dev Associate as an entry point. Again, it depends on the firms (and probably nature of the project), but the range of responsibilities seems to vary- maybe some acquisition/ diligence duties, entitlement, project-mgmt, etc. In the homebuilding world however, it seems like roles are split into either project management or land dev/ acquisition. Land dev/ acq seems to share similarities with brokerage- you're working with brokers, maybe calling property owners, and are trying to find and close sites. Broadly speaking, I would think you'll get much more experience in underwriting a deal, and getting the experience of learning whether or not to take on risk and pull the trigger.
That's my $0.02. Any veterans can probably opine and elaborate more than I
Thanks for the input man, so you’d recommend a land dev acquisitions role?
Only you can make that decision, but land Acq might be worth investigating. Lennar, DR Horton, Toll Brothers, Pulte, Taylor Morrison etc might be worth exploring. Depending on where you live, one of those groups might have a job posting so you could sense of responsibilities. Also exploring urban land institute (ULI) and see if there’s a local chapter that has any upcoming meetings… could be a good way to network and meet people who work in the jobs you’re considering.
Where did got get your MRED from, if you don’t mind sharing
My degree is from a reputable SoCal school (USD, UCI, etc). Not breaking in has more to do with me being somewhat of a unique case and/ or trying to start my own thing. Market conditions obviously are what they are
Whatever you do… don’t work for Matthews. It’s basically glorified telemarketing. If you’re going to do brokerage, do it with a firm where you’ll actually learn things other than cold calling.
Matthews is a chop shop. If you’re at one of the major firms, in a solid market, and work on a well functioning team, it’s not going to be a cold calling sweatshop.
Firm and team culture are everything. The M&M/Matthews sales bro bullshit is dumb and not a great example of what brokerage can be about.
Both career paths have potential for a lot of income. I don’t know you personally, so maybe you are a natural born salesperson in addition to being an engineer. But in my opinion, I think I could teach most of my engineering friends how to be a good developer and they would be much happier in development than selling for a living. To be a successful broker, it’s really 100% sales. Even on institutional caliber teams where you can grind it out as an analyst for a few years, if you want to move up you need to be really good at selling.
Ultimately, if you want to open your own shop as a developer, selling also comes into play. But you can grind your way into a pretty high position at most developers as an execution guy. I think the question is do you see yourself as more of an execution guy or a guy that is constantly networking and selling with a level of shameless audacity that would make most normal people feel uncomfortable?
Thanks for the insight, I get what you’re saying. I’m definitely more of an outgoing personality but don’t think I have it in me to make people uncomfortable lol.
I was referring to making yourself feel uncomfortable. The people you are selling probably won’t feel uncomfortable. They’ll just ignore your email or call 95 out of 100 times. It’s on you to keep plugging away and following up with people even when the odds don’t look like they’re in your favor.
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