Would a background in underwriting multifamily, industrial, office, and retail be beneficial for me in the selection process? What would they ask me? And how can I prep for the transition? Im running the ACRE course and studied Finance and Real Estate in college on BD lamron and them.
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Underwriting is underwriting. Show you understand how deals work and you should be fine
It can be very challenging to break into the equity side from traditional commercial bank lending. Doing things like ACRE is a must... you have to show that you can do more dynamic work & think more dynamically than the stigma of commercial bank lending (low LTV, strong DSCR, recourse, etc.).
Also - earlier in your career you make the jump (assuming that is what you want to do based on this post) the better. It is easier to justify training somebody when they are a lot cheaper.
All this to say, it is a really tough time for equity shops to hire new acquisition talent... so do the extra work, put the time in to build good relationships cause you want to be the first call when a shop is ready to get aggressive in the market again.
Has thIS transition been done before? Is this a normal route if you didn’t end up in brokerage or REPE straight out of college?
Yes its common, I'm just saying its not easy and you have to do things to set yourself apart from the crowd.
Under normal conditions, this is a pretty common path. Not sure why people on the equity side think they are doing some insanely complex underwriting that a traditional bank lender couldn't conceptualize. I do agree this is literally the worst time ever to be trying to break into acquisitions.
I disagree with the first point (completely agree with the other two points).
I personally know a handful of people who did plain old senior mortgage lending at banks like BAML, JPM, Wells, etc. who went on to doing acquisitions at top equity shops like Blackstone, Brookfield, Carlyle, Fortress, and Starwood. If you’re at a top shop doing debt, the switch is even easier (again, know people who have personally made the switch so it can’t be that uncommon).
This is a common path. Skills are applicable to either side at the junior level.
Be ready to jump when you get the opportunity and keep pressing for it. It’s a common transition and is easiest as an analyst or associate.
To prep, if you can afford it, I’d take the mit real estate investment class by Geltner.
How does that course differ from ACRE?
More academic and assumes more prior knowledge. There’s also a real estate modeling class he’s offering online that’s pretty extensive with Monte Carlo simulations. Think you can audit a version of the investment class for free but it’s a 2006 curriculum. If you took a lot of college real estate classes might not be as useful but i liked it more than refm or the acre videos on YouTube.
Having the real estate financial modeling skills down will be the only major difference. Underwriting CRE is underwriting CRE regardless of what side of the capital stack you are on.
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