Interview in LA with medium sized RE Development Firm - Residential: What should I expect? Best way to prepare?
I have an interview in Los Angeles with a medium sized (but apparently pretty lean and mean: not hyper corporate) development firm that specializes in residential projects throughout Metropolitan Los Angeles/Southland.
The interview is this Friday morning (Black Friday) so my prep time is limited given Thanksgiving obligations.
The role is for entry level analyst or associate of development (each company is different in how they assign titles).
Questions:
1) What should I study beforehand (aside from all the background available on the company and its projects completed and planned)?
2) What Excel models should I study or be prepared to build in this situation?
3) What are the main RE/Finance areas which they will go into during the interview?
4) What questions from fit to the technicals should I anticipate?
5) Anything else (ie, pointers, tips, etc) the seasoned practitioners, and interview veterans care to throw in that will be helpful.
Thanks!
Understand mezz debt and waterfall scenarios. I don't know if you do CRE in Los Angeles already but be able to speak towards other deals in the market (e.g. Stella in Marina Del Rey selling for ~3.5 cap or whatever that ungodly amount was). This has been mentioned before, but real estate is mostly fit so just go in and be personable/excited for the opportunity.
or maybe just drop that your Dad is Tywin Lannister
Have a good understanding of the main ways to value property - direct comparison, income, and cost, know the main determinants of Net Operating Income (they might ask you to differentiate between expenses for residential and commercial), know what absorption is and how it can affect returns, know leveraged cash on cash returns.
Overall, real-estate has pretty simple models in comparison to IB - no three statement stuff, just cash flow discounting over a specified period of time.
i think direct comparison, income and cost approach is more for appraisers no? ive never had to use these nor know what they are (im on the sell side in RE)
yeah, I agree, I wouldn't worry about that. You're not being hired as a valuation expert, you're being hired to handle grunt work and modeling for a developer. I also agree with Gene, you might want to touch on waterfalls before going in.
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