Nature of CRE modeling tests
To all you more experienced monkeys out there,
When interviewing for Large CRE firms, what was the nature of the modeling tests? Was it more along the lines of receiving a brief case study that you would have to complete on the spot within a time limit (30 min, 60 min) or was it typically a take home model that you complete before the interview?
Would love to hear stories/experiences.
All of mine back in the day were on the spot with a time limit. They were typically a case study in which a situation would be laid out with specific assumptions, a model would have to be completed (usually not even created), and then questions would be asked that you could only get correct if the model was correct. Maybe some more insightful questions at the end - i.e. "Would you do this deal? Why or why not?"
You're almost always your own worst enemy in these things. I remember taking a test for a big, name brand firm that gave me an hour to complete. I finished it in 10 minutes, answered the questions for another 5, and then panicked for 20 minutes because certainly this big important firm with super smart people wouldn't have given me such an easy test - there must be a trick somewhere! I think I ended up spending another 10 minutes re-doing the entire case study just to make sure I got to the same answers.
Go in there, take it seriously, knock it out, and double check your work, but know that it is not the main determining factor in getting hired.
Extremely helpful - thanks for sharing.
Generally, I've seen them in 3 varieties:
1) On the spot - these are usually rather rudimentary and anywhere from 45-90 minutes. A lot of this is just the basics of excel/real estate.
2)Overnight - these are usually the most challenging. They throw a ton of data at you and ask you to model it out and produce some kind of recommendation, ig; would you invest, or would a debt source lend on this deal.
3)48 hrs- Week. These are usually number two but with a much bigger emphasis on polish, presentation, formatting, etc, etc.
Spot on for what you'll typically see. I never understood #1 or the "build a model from scratch" BS, as if you're not going to have the kid work in your model.
Our analysts don't leave ARGUS, so I can only speak to that type of interview. First round is usually behavioral/mental math, basic CRE concepts. Next rounds are typically more mental math, and UW basics - if you compress your exit cap what happens or how would an I/O period move numbers blah blah. Once they're through that, it's ARGUS full on - we really just want to see data entry proficiency, after that the less you no the better for us (we want it done our way). The take homes are kinda BS as you can look up things/ask around - we've been screwing with a model in some way (usually apply a monthly rate to yearly or the other way around) and see if they can get to the bottom of whats wrong.
Agree. Also depends on the fund, they just want to see if you are competent and can think critically. Also, not all RE/transactions should be underwritten in Argus. Depends on what you are working with.
No doubt about it, which is why I'm pleading ignorance on other tests. I'm in industrial, so we don't leave it.
PS - if you haven't worked in ARGUS for at least an internship, don't state proficiency. Being certified does not make you CLOSE to proficient, and will only make the test harder for you.
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