Working in lending and earning a solid $200k+ stock for 45 hour weeks at an institutional shop. 3% raises. It is underwriting with very little upside to be an originator. My background is in sourcing and executing transactions within family offices. I hate being the background, and hate being treated as nothing but a 'resource' by the originators.
Evaluating several offers. All are ~$90-100k base with commissions expected to get you to $200-400k (year 1 vs year 3). None are institutional - think almost hard money but with $400MM - $2B funds.
On one hand, I do not feel like I am giving up much as I am confident I can close at least some business. On the other, commission structure with lower base just sounds.... awkward for some reason.
Anyone else make the jump? How did it go?
Is there a cap on commissions? Can they give you an idea of people at various percentiles of success over time?
Do you have a business plan? If you have a plan, and you go in and execute and trust the process you will make shit happen. It isn’t happening over night though. It’s going to take 1-3 years to get settled in and build momentum. Not much different then starting your own business (except you have a generous subsidy from the house to hold you over) .
I look at it this way. Let's say the local debt fund gives me an offer at $150k base 200-300% bonus to originate deals for the fund.
Like everywhere, you now work in a competitive environment where it takes effort to close business.
If you go in and do not close any business the first year, you are out. You are not getting that bonus. So effectively, you are taking a slightly higher base, capping your upside, and still risk being fired if you cannot perform.
To me the only thing to check is if they will have consistent deal flow coming in or they expect you to go out and cold call your way to an offering memo.
Thoughts?
Well that's a toughie. I think it depends on their culture/expectations. If you go in the first year and do not procure a single deal... in most cases you may not be made to be an originator, however at the same time, I can't imagine they expect you to have your biggest year eve as it takes time to establish your "brand" in the market as their go-to guy.
I think they expect you to go out and procure business any which way possible to the best of your ability. If they had enough incoming deal flow they would just hire you as an execution guy and not have to pay you the upside associated with being a deal hunter.
PS if you land there I would love to learn more about your lending mandate and see if we can provide you with deal flow. Good luck dude - believe in yourself and go in with a methodical plan that you can quantify and back into what you need to do to produce X-amount of deals.
The reality is that at some point, you are going to have to take at least some level of risk if you want to break into the upper income levels in this business.... whether it's on the principal or service side. There are places where you definitely can make 200 to probably 300K on a trajectory with relatively little risk, but you won't have many opportunities to break into the really high (500K+ income levels) at those firms. It's not to say that you need to be making 500K to be happy, it just depends on your goals. At some point, you're either revenue or overhead. The reality is that if you aren't producing, you're going to be viewed as overhead. I don't like it anymore than you do since I had to deal with it for a long time, but that's just how these business work. You just have to make sure the risk that you take is calculated. If you are guaranteed 100K and it covers your living expenses/debts, and you think there's a reasonable (50%+) chance that you can make deals happen, then you may as well go for it. If it's a sketchy business model where it's going to be hard for you to generate for 18+ months, then think twice about it. There's a big difference between starting as a broker at a boiler room vs. the CB/HFF/C&W/Eastdil/Colliers/JLL, etcs. of the world.
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