Long story made short; studied Finance and Econ for state non-target, got into selling mortgages after graduation (1 yr experience thus far) and I'm interested in commercial banking. First internship was one year part time in investment advisory, second intern as commercial mortgage analyst for a LifeCo. Did some interesting CFA challenge and equity analysis classes during undergrad. Was interested in pursuing banking after graduation and landed a few interviews but needed a job to get my feet under me.
Is commercial banking at the analyst level a stupid jump? Retail mortgage lending is fairly in the box even on complex deals and I'm interested in more investment related concepts. Is my experience enough to land a gig? What can I do to bridge the gaps between my experience roles? Financial analysis skills are fine but my biggest gaps are probably in analyzing commercial tax returns. Saw plenty of Real Estate tax returns for LLCs during my internship and now plenty of individuals but maybe I'm missing a little bit.
Given that you're in the RE forum, I'm assuming you're looking at real estate groups within commercial banks. Your experience should be more than good enough to land a credit analyst gig. Debt analysis (at traditional banks which have low risk tolerances) is pretty straightforward - you create a few cash flow scenarios (upside, downside, break-even), calculate DSCR and debt yield, sensitize DSCR and LTV, compile a market analysis from existing sources/databases, and analyze the guarantor's contingent liabilities. There's other stuff that goes into loan memos but that's the bulk of if it. If you can convey that you know what those listed items mean on even a theoretical level, you'll be fine in an interview.
If you're comfortable looking at financial statements you'll be fine. If you've seen LLC and personal tax returns you'll also be fine - bank software is idiot proof nowadays and the software will straight up tell you exactly which lines/boxes to look at on a tax return to properly calculate cash flow. If you want to get into the C&I side of a bank and lend to operating companies, you should brush up on your accounting and be able to speak about AR/AP aging, AR/AP days, inventory turns, margins, and enterprise valuation. C&I analysis can be a lot more complex than RE.
If you're good at your current gig, you'll probably be looking at a pay cut to go to a credit analyst role, but the career path comes with more upside down the road. I was a credit analyst for over 4 years before leaving lending. Let me know if you have more specific questions.
interesting what did you exit to? and if you were interested in starting your own LLC and investing in a commercial would the people likely assist lending the money, or would you prefer you establish the business elsewhere because of the envy from the business for your personal gain? also, what is your outlook on the real estate types that would give the highest returns with tax advantages? Thanks
No, a credit analyst position at an active lender that does big deals across multiple geographies and asset classes is a strong entry level position that affords many exit opportunities. You will get tons of exposure to principals and see all kinds of ways investors make money.
Also, banks generally only higher from other banks so the space is pretty protected against outside competition. My brother just went from an unhappy associate making $75-80k/year to a VP making $120k and he's only 27 because he got referred to the opening by an existing client of the new bank at the right time with the right experience.
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