Not learning as much as I feel like I should be.
I am currently at a (very) small repe firm in the southeast. In some ways I have it made; I get paid above market, have been offered carry after my first full year with the firm, and I get a lot more responsibility than many of my peers. I am the youngest at my shop by far and the deal team is only 3 others which is great. The management team is working on growing the business and I have a clear path forward. There are two issues I have with my current set up. First, the owner is a complete and total moron. This isn't just my thought as the entire team has this sentiment. He inherited the company in his late 40s after not having worked his entire life and is a human hand grenade. He has a reputation for being kind of a joke but people still do business with the firm because of the management teams strong reputation. I would say 15-20% of the Presidents time is managing the owners stupid, stupid requests and being a small company I get stuck with a lot of bullshit. This is not to say I am above dealing with bullshit requests, but I was blindsided by a lot as the vast majority has nothing to do with real estate. He has a decently high net worth and I don't think the man could tell you how much money is in his checking account. He and his wife burn an insane amount of money relative to their net worth. Being a small office, people talk, and I have to wonder if his spending habits will one day bring real issues to the firm. My second gripe is that while I feel that I have a decent amount of responsibility, things are slow. I know without question that I am not seeing the amount of dealflow/getting the reps that my peers are. This brings me great agita for obvious reasons. I would say that my lack of learning is of more concern at this point than the owner. Has anyone ever found themselves in a similar situation and if so what was the line in the sand that made you start looking for new opportunities?
People leave managers not companies. Sounds a bit like the case here. There’s not much advice to offer you but it sounds like on the one hand you’re being given more responsibility than your peers but on the other hand you say you’re not learning. I’m not quite sure I follow that as you should be learning if you’re getting more responsibility. It sounds to me like you just don’t like the head of the company, which is totally okay. Considering this is how the company is, you can decide to either stay and deal (corporate bullshit exists in some form everywhere), or leave and find hopefully greener pastures.
Regarding deals being slow, well, look at the market. It’s not exactly hot pickings right now. Many acquisitions teams are going to be slow as most people think pricing is pretty high right now and there is less deal volume. So..you’re probably going to have that issue everywhere.
Thank you for the response. I can see how what I said is a little contradictory. What I meant was I’m not getting the reps it seems my peers are at bigger shops. I am learning something new on each deal we work on, and in most cases learning a lot as I am new to RE, but the sheer number of deals I have worked on seems low.
What you said about the market as a whole right now makes sense. I come from a equity trading background where theoretically I could do an unlimited amount of “deals” a day so I guess I have to realize that the nature of the business might be that I have some more downtime at my desk during the day. Your “macro” perspective assuages some fear re learning.
The boss situation is a weird one. I get to walk into my VP and the Presidents office at will and they are both great guys. It’s not uncommon that we get beers after work and they are genuinely fun and interesting people. The real issue is the owner. He effectively has no day to day pull on any deals we’re working on because candidly he has no clue what’s going on, but it feels like we’re working in a small family office sometimes having to deal with the absurd requests. Your right, I think it’s something I have to weigh out and see if it’s worth staying around.
Has your VP or President ever expressed interest in starting their own fund? Spin-offs are common in this industry so if you think there's a chance they take you with them then it might be worth sticking around.
What is your firms deal volume? it's not uncommon for small shops to only close 4-5 deals a year, but you should be underwriting at least 100 new opportunities in that time frame. IMO you shouldn't be worried about "Reps", just absorb all the knowledge you can and enjoy the ride.
Yes, both have expressed the desire and we have had discussions with large family offices who are willing to capitalize a new company. My VP has the means to never worry about money again, the President does not, and with small children money is somewhat a concern for him. Ultimately I have a feeling if things don't change around here within the next 8-12 months those two will start their own shop and they have expressly stated that they would want me to go with them which I would do.
Closing 4-5 deals a year sounds about right, but I don't think I see (though my bosses definitely do) half that many in terms of underwriting them. Both my VP and the President have 20+ years doing this, and it seems as if they intuitively know if a deal will pencil or not, so often they are telling brokers no before I even begin an underwriting process. I will hear their reasoning for not wanting to underwrite something, but I wont see it if that makes sense?
Great culture + responsibility + strong comp is is very hard to find so I'd be weary making a jump elsewhere as you'll likely be trading incremental deal flow for the culture/responsibility/comp. There's a bit of a deviation in the market: cost of capital is decreasing and the surplus of dry powder is driving executed transactions to very low levels at a bit of a spread. Unless you're at a major REIT riding structural tailwinds/well-known REPE that has raised a new discretionary fund/Lifeco or open ended fund with capital to deploy (quite a few so won't knock it), seems like everyone's getting priced out and the winners are the handful of players as mentioned.
Instead of the CEO, I'd pay more attention and vet who's sourcing deals for your firm and who are your capital partners. To the extent your capital partners want to continue to invest with you and you're able to find investable opportunities, I would personally ride it out until you had enough notches under your belt.
So, all of this sounds normal for small firms. Not to say that as a good or bad thing, just sounds normal. Should or when should you look?
If you have been in the role 2+ years, I wouldn’t hesitate to be on the lookout for the next role/firm. If less, than I’d mainly focus on preemptive networking but would maybe strategically apply for things you really, really want.
My two cents… only jump for roles that are legit upward moves! Like better title/role/pay/firm type (hopefully for all or at least 2 of those). From being at such a small firm the way you describe it, I would say moving to an analyst/associate role at a “major” firm is an upward move (or at least viewed as such on a resume); so I would have some “flexibility” in title if considering a jump.
Personally, if you feel you are reaching the limits of what you can learn/do at a job/firm (which can happen quickly at very small firms tbh), then that is a good sign of a need to move on. Still, be strategic and make a good move, rushing it is not worth it for sure!
Agree don’t rush it. I rushed my previous move to a PE firm and regretted it in a month. I was ready to jump for a while at that time, but I took the job without digging in enough. Suffice to say it was a horrible fit and I was gone within a few months. I landed at an absolutely amazing firm with a great role, title bump etc., but it was a bit of agony arriving here.
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