Homebuilder
I'm currently an associate with about 5 years of acquisition/ some development experience but it feels like I can't move any higher in my company without someone leaving.
I have some friends that are Manager/ Directors in land acquisitions and making twice what I do. Has anyone ever pivoted into the home building space from Multifamily? Any regrets?
You can make a ton of money as a homebuilder land guy doing pretty simple transactions but nobody on this forum would consider it because you can't call it REPE. That said, definitely less optionality moving forward once you're in that seat.
My thought would be that I can go into the land acq space and run point on deals for a while and if I ever wanted to move back into multifamily, I would be able to come back in as a manager/ director because I have the previous skillset to UW multi and have shown I am able to run the deal process from my time at the builder. BTR would be the smoothest transition back but I'd think a multifamily firm would accept the experience as well.
Also, I agree it's not as "sexy" as saying you work in repe, but I wonder who the real sucker is when I see my smooth-brained friends make twice my comp with half the effort.
Since apparently my last post was too vulgar, I'll keep it PG. Don't worry about the prestige of a job, it's pointless and no one cares outside of undergrads on this forum. If you ever run into someone in real life who actually cares about "prestige" in real estate careers you probably don't want to spend much time with them anyway.
Do whatever job you enjoy doing, and if you don't care about that and only want money I'd first recommend you review your priorities, but after that, just take whatever job you think will give you the most money. Plenty of people have made a ton of money in areas of real estate with "low prestige" like self-storage, industrial, or strip malls. Personally, I'd rather have the money over prestige.
Any insight into how busy your land acq connections are right now? I know the home price indexes are still at all time highs but homebuilder sentiment hasn't been this bad since GFC
It's not great but they're busier than all the multifamily folks I know. Personally, I think inventory nearest to employment will remain low as there is no incentive or pressure to sell a home with a low interest rate. This will continue to push demand for "affordable" homes in the suburbs as everyone gets more comfortable with a longer commute in a hybrid work schedule.
I work in both multifamily and we have a homebuilding division. Honestly, the homebuilding side is fun and there is a lot more going on with that side of the business. You bring lots of value to the table if you are good at modeling since the majority of people in the homebuilding world dont have great excel skills.
You really need to think this through more. If you get into home-building, you definitely aren't moving any higher. Houses are typically only 2 stories. Maybe 3-4 if you're pushing it. Homebuilding and land development are horizontal businesses.
Can’t speak for the national players, but home building is an industry full of small, privately owned firms with lower salaries than larger companies. I think it’s going to be harder to go out on your own too because anyone who can do it for themselves does, so hiring will be hard. I only recommend it to people who can’t see themselves doing anything else in life.
Large homebuilders that have a dedicated land acquisition team are usually publicly traded.
https://www.builderonline.com/builder-100/builder-100-list/2024/
Much better career optionality and pay there I am sure.
Any sizable builder - public or private - will have a land team. The question from there becomes i) how many seats are there on that team and ii) what is the role and responsibilities?
At a smaller builder there may only be one person acting as the Vice President of Land. But they are running deal generation, underwriting, due diligence, legal, and so forth. At larger privates, they have a few seats set aside for deal generation alone and then support staff for the rest.
I have gotten too close for comfort personally and have friends who did it and regretted it. Search for the thread "Why is residential RE looked down upon?" and KingEsque sums it up very well. Lower barriers to entry and less sophisticated so the caliber of talent can be lacking. Not knocking it, just being honest. If you're pedigreed at all or think there's a chance you go back to multifamily/commercial/REPE, I'd think twice. Real estate is not rocket science but that space is realllly not rocket science so people who know what they're doing don't put a ton of value on that experience from a resume perspective, at least from what I've seen.
I'm an analyst on the land acquisition side and what you said is correct.
One thing I would like to add is that junior talent is a crap shoot. I've met other analysts who barely even know how to use Excel or don't even understand basic financial metrics like levered/unlevered IRR. Senior talent ("VP of Land") in the industry tend to be good. They may not come off as very polished compared, but they know their shit and should have deep ties to land brokerages and land developers.
Any other questions? I'll be happy to answer.
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