CAREER PIVOT (What would you do if you were me)
I have been working in real estate development for over 5 years now. All of my development experience has been multifamily. I've managed to jump around from market rate, student housing, and now affordable housing.
After a year in affordable, I'm starting to realize how long it is to gain promotion because endless amount of red tape that goes into each project. To truly gain promotions you have to close deals, but the development cycle is damn near 3 years long because of the complexity. I'm also tired constantly having to put out fire as I go through my work week.
I recently been thinking about pivoting to lending position specifically focused on multi-family. I'm trying to target some of the bigger banks that lend in multifamily. (CBRE, Berkadia, WF, etc) I'm trying to learn the methodical approach taken by lenders to green light a deal. I guess my thought longterm would be to chief underwriter or got to production. I also see the benefit of deal exposure and predictable schedule. I'm about to be 36 years old. Kinda over the randomness of job as I look to start my family.
I give all this background to say, would you pursue this pivot or is it worth it to stick out it? Just go to another affordable developer after few years when markets recover?
Just FYI- The firm I work for doesn't give any sort deal participation, carry, or bonus because it's one of the bigger non-profit developers, (eye roll)
So affordable housing dev is one sector I have personally had little involvement with, I have many friends who work for those firms or provide service as lawyers, etc. The richest person I legit personally know very well made his money from affordable housing development (he started in the 80s). I've heard the horror stories so I don't doubt your issues.
I'm not sure if the lending/debt world would be a major improvement or not. Deal world is full of "randomness"... crazy time pressures, erratic market moves (interest rates can fuck you in new and exciting ways), and customers who think they are gods (you've met developers right?). That is why you see people trying to get out of debt roles so often. UW seems rote (dare say boring?) but it can be intellectually stimulating. Production is literally just sales.
All I'm saying is your stated reason to jump doesn't seem aligned with your destination. Granted, a role at a big bank or agency lender would probably be more "chill", but at a origination based shop, I doubt it. Maybe a different developer (not affordable, or at least for-profit) is better move. Or if you really want to "kick back" go look at gov't jobs, not all suck, but pay is less. Not sure where you prioritize pay in all this, but if it ranks lower, lots more options.
Thank you for your input. There is definitely money to be made in affordable, like other areas of CRE, has to really be at the top or just get lucky to be at the right during high growth years. Affordable just really values accrued knowledge for learning a state policies. I feel that pigeonholes to a state to make a major move else where. I know the other really option development wise is to go on my own but I know we are in the dirty part of the cycle now and foreseeable future. I've learned a lot in development but I know unless I go out on my own, I'll never make real money. I haven't seen many development jobs out there lately worth going after online or from my network.
As far as pay goes I would like some upside. If I go the lending route the underwriting route is most likely what I was thinking. I don't need to get participation in deals but it would be nice to have a bonus and a more predictable career trajectory. Any insight into underwrites compensation?
I would be opposed to the production route longterm once I learn the ropes. I did sales for longtime before going into development. Any insight into production route compensation?
I think you can probably find better development jobs with more upside. What is your definition of making real money? Lot's people work for large, corporate type developers and get to where they make 7 figures with seniority and participation. Going on your "own" is I guess what ever you make of it, but personally, I don't find it nearly as alluring once you adjust for risk and volatility (my early career is in REIB before 08 GFC, and I watched a lot of private developers get wrecked, so maybe I'm jaded in fairness).
I really don't have much info on UW comp, closed I've worked to lending side was in production on D/E I-banking team. I'd think they have "bankers" type salaries/bonuses. If you are brand new, I'd guess the comp in a major market would be at least 70k (with grad degree), sure it can scale above 100k with exp but I wouldn't guess the timeline. The big question is where you would "rank" in seniority if you applied to UW positions.
Production is generally all commission/fee split based at the end of the day. Analysts at the big shop might get like a guaranteed base of like 50-75k plus some % of fees the team earns (like 10-20%). If you are on a good team, that could easily be over 100k comp in first year. Once you are full production, I mean, all depends on the market/team/prop type, etc. I know some people who consistently make over $300k in secondary markets and heard of people in some major market big shops that are over 7 figures. The variance can be huge. If you go this route, your experience will probably be more valuable and you probably don't have to be at the 'bottom' of the ladder.
In my experience hot market markets are acutally bad for affordable developers because Subs push their pricing and there is more competition for land. If anything, a slowdown in other sectors provides a tailwind. To your point on learning a state, yeah it is important but having worked on deals in 4 states they aren't really all that different. It's just a different QAP but deal structure doesn't change.
Thanks for the input. I'm looking into other developers but I kinda stuck in my state for at least 2022 because future wife is a consultant at one of the big 3. Want to make sure she gets her experience before making another move. All the development shops I would want to go to aren't hiring. The firm I'm at has a very good reputation nationally, I guess I could wait my turn. Our pipeline is robust for the next few years since it's affordable. But to be honest though I still think it would be hard to make 250k plus with another 5 years of experience without leaving the geographical area I'm in.
I don't know if I can wait.....
I think a route towards UW, I would start as senior analyst. In other forums I hear 85k plus. This at the bigger banks I would be targeting. Have a sense that bonuses are 15-20%.
If I were to go the production route, who should I target if I'm located in the southeast?
I think it's a little early to tell how things are to figure out you're next move. I'm on the production side and things have slowed down a lot. Multifamily is not really moving all that well. Industrial is pretty much king in what is moving on the pipeline. Self-storage is doing pretty decently too. There are multifamily deals coming together, mostly small ones, but these deals are being done with credit unions and regional banks mostly, no big lenders. If you go towards production, finding a good team would be crucial. The good teams just have a strong flow of deals coming through and a good roster of clients, even now for the period we are in. They're still churning out deals while other teams are still trying to catch what they can for the most part.
I'd probably continue to keep an eye out for positions on both sides in the meantime. If something sticks out that is of interest and really worthwhile, then it's probably something you could go after. I feel like much of the market is still unpredictable right now or just slowly stabilizing. I think we might see things be a little bit better after the start of the year in February or early spring when much of this year's events are mostly behind us. Hopefully you get more feedback on your post because I am definitely looking to make a hop, but the roles out there are kind of "eh".
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