College Senior: GS IB vs Local Developer Post-Grad
I am a college student entering my final year before graduation. Studying finance but want to end up doing development longer term. I am not really sure how to best break into the market. I ideally want to have my own development firm 20 years from now. It is my understanding that having financing partners is the make or break to launching your own dev shop. Staying with GS or trying to get into a real estate fund sound like good options. However, there is a developer in a mid-sized city who has been teaching me the business and wants to eventually (1.5-3 years post graduation) set me up as a GP (he would be the LP) and run projects on my own. His offer is the fastest way to break into the industry and he does do a good amount of deal flow (1200+ developed units a year, self funded equity). The downside is lack of brand recognition and lack of exit opportunities in a city of only 2.5 million.
Any suggestions? If I were to go the fund or established developer route, who should I be looking at in Northeast Corridor, LA, Chicago?
- Accept GS IB offer for a non-real estate field with the potential to network into a real estate team.
- Apply to established developers or funds.
- High net-worth individual with a family office who wants to train and back my venture.
So being very honest, it is really hard to impossible for anyone on a forum like WSO to evaluate Goldman Sachs vs. "random unknown HNWI". So many details about the unknown that matter tons. Thus.... take any of these thoughts as being partly useful at best.
Still my thoughts...
- A GS IB role even non-real estate is going to be mega valuable experience - and one that nobody can really judge or measure until well into it. As you are probably aware, tons of college kids would kill for that role, there is a reason, and it's not bullshit. The fact that you being placed in a non-RE group doesn't deter me in the slightest in saying it would be good for a long-term real estate career.
- I am always inherently skeptical and dubious of a "once in a life time" offer (like a HNWI willing to back a venture) being offered to a college student or even junior type person. Like why? I mean this seriously, why do they need/want you? Vs. just say "hiring" you. This is very YMMV and really impossible for me to judge, but the old saying "if it sounds too good to be true.... it probably is" is true for a reason. Again, I can't really evaluate, but just know it trips many red flags for me personally (like is this person/family legit or not).
Those are my gut reactions, and as I said, really hard to say much more not knowing or being able to know the details.
Thank you for your reply. I am very understanding of the GS "golden key" but am honestly not sure if I could make it through 2 years of 13+ hours days, 6-7 days a week, for something that feels disconnected from my ideal future career.
Here is some more color on the 3rd option. I work during the school year for the HNWI/Developer. I am to the point where I am selecting sites, submitting offers, and managing architects for two, 300+ unit multi-family projects. I have already worked CM full time at a major GC for 1.5 years but I still need to learn the development side of construction.
His plan: Use my senior year and 1-2 years post grad to finish out my training on entitlement, financing, and CM processes. I would be a salaried employee with performance bonus upon graduation. 2 years on, would continue as salaried with the ability to do small GP-LP "side projects" at my discretion and scale up from there.
Got it, when you describe as such, the nature of the HNWI/Developer makes more sense, and since you work for them, you should be able to gauge "realness" and even level of financial depth and capacity. So, you have decent to good info there.
As to GS, yeah TONS of people who take that role will HATE it, and they count on it or don't care tbh. If you think that job is a non-starter on a personal level, don't take it. Just realize you could regret that decision soon or long after (like if it doesn't work out with the other). Of course, if you take GS and turn down the HNWI person, then you could really regret that soon or long after. Just facts of life, I'd guess I go with where you think you minimize chance of regret and it feels most right.
TONS of people have massively successful careers w/o working for a place like GS out of college (myself included), it's not a must. Of course.... I didn't have an offer from a firm like GS, so I have chance of such 'regrets' (and I do wonder 'what if' tbh).
If you feel like this development type offer is really right for you, I won't call you crazy for taking it!
Total devil's advocate here and really have zero knowledge of who this local developer is, but OP just be weary that some people may be genuine, while others just want to make their own lives easier and could potentially just see value in bringing a young, smart kid for the cheap to do his grunt work. Not saying that's what's going on here, but you need to somewhat consider it in case you haven't already.
Also, raising money is the easy part..so he promised to be your LP later on in your career when you are ready to go out on your own? That's nice, how many deals is he going to fund? Is he ready to commit to that now? What happens when you run out of capital? Or what if he doesn't like your deals you pitch? You'll be left on your own. Is he taking entitlement risk alongside you? Doesn't even sound like he's willing to co-GP with you; he just wants a safe way to park his money in a market and a person he personally trained / trusts so his money can continue working in the way it used to but at a small discount while he gets to go fishing all day.
Take the GS offer and don't look back. Not only will you make substantially more and be able to run a ton more deals with GP capital, but you open the door to meeting way more LPs than just this guy, who will gladly give you some capital to play with on the side.
Also, if you trust this guy, and he presumably believes in you - ask him if he'd still be willing to do deals together given everything you've learned if you leave GS after a year and come work for him then; or perhaps, if you leave GS and get into a larger development shop to really learn how other investors think. What do you think he'd say? That should give you your answer.
Local developer already claiming plans within 2 years for a recent grad to run projects? Sorry but even if you work with him now it sounds pretty skeptical.
If you think you can get by at least a year grinding hard at GS then that is valuable experience you can’t pass up. You’ll have your pick of exit ops.
I think if you really have developed a good relationship with the HNWI you shouldn't have much trouble asking him for a short 6 month - 1 yr gap before you start. Even if you don't make it to the first bonus check at GS, the name brand on your resume will pay dividends if this venture goes belly up. If that happens and you're looking for new jobs, the GS stint will add a halo to the failed real estate project -- think about how you perceive someone who dropped out of harvard / mit to start a business vs someone who never went to college that claims they got into a top school but wanted to start a business instead.
This is the answer. If this guy loves you so much that he wants to give you the keys to the kingdom, he will let you go to Goldman for a bit.
This is what every rich real estate parent does as well. They send them off to an institutional shop to get experience before bringing them into the family business
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