Hot damn, I did not imagine that the switch from being a broker to a principal would be such a bit**. A little about me to help with my question is I am 5 years deep in this industry. I started as a office and industrial tenant rep and finished my brokerage career selling land for 2 years. I got pretty tired of brokerage as I decided it wasn't for me and always felt drawn to the other side of the table. I landed an acquisitions role with a very small multifamily company and have been going from there. I found pretty quickly that the switch is more difficult than I imagined it would be. With no guidance in the company I have been left on my own to figure it out. With no finance background what is the best way for me to be a damn good acquisitions guy? What basic formulas and terms must I know? Where should I start? I hate to say that I am floundering but.......I am and I want to bust ass to make the best of this. Any advice is appreciated and I am a former broker and can handle being beat on.
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Get Argus certified and network your fucking ass off. PM me if you are a Houstonian.
People use Argus for MF?
Didn't catch the multifamily portion of question. People only use Argus for multifamily with a mixed-use component.
What's your role on the acquisitions team? Primarily analyzing deals or sourcing? If you are in the weeds preparing acquisition models adventures in cre has a pretty good walkthrough of how to make one from scratch. Even if your company already has one, it wouldn't hurt to understand how to start from square 1 in order to really understand process and what goes in to calculations.
Regardless, would be good to really understand what your companies return requirements are and what goes into that calculation. Deals are going to look a lot different if you are trying to clip a long-term coupon based on cash on cash than if you are trying to max our IRR on shorter-hold redevelopments and understanding the basics of your return thresholds will help you narrow your search for deals and quickly disqualify ones that aren't going to work for you.
Curious about some of the specific tasks that are making the transition a struggle. The switch was more difficult for me on a conceptual level - when you are working from a third party perspective, the level of detail necessary in any analysis is much less than when you own (or are trying to own) the building.
I made a similar transition. Had to learn everything from scratch. You need to do a few things to build youself up:
Start building your deal network. This would include GPs or LPs depending which side you are on, brokers, lenders, etc.
Understand the numbers. Get your hands on a model that works for your Investment Committee, then rebuild it. Literally have one screen open with the model, and another screen open with a blank excel spreadsheet. Rebuild the model with all the formulas. It might take 8-10 hours, but you will understand how all of the inputs works, how revenues are driven, etc.
Work on presentation/memo templates (if they do not already exist). Understand what the typical "hot points" are for your investment committee, focus on these upfront when underwriting deals.
start finding deals!
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