Pay Cut to Move to Dev?
Would you take a $25k pay cut to move from REPE to Development? Basically to move from the LP side to the GP side as a development analyst? Or would you wait for a different opportunity?
Trending Content
| +52 | Leave brokerage to be GP | 12 | 2d | |
| +49 | New Comp Database - Google Form (Now with Data Validation) | 24 | 2d | |
| +24 | Seeking Career Guidance in Real Estate Development Post-Graduation | 3 | 3d | |
| +23 | Going out on your own | 4 | 2d | |
| +23 | Spreads over SOFR/UST | 8 | 6h | |
| +22 | REPE/Development GPA | 15 | 5d | |
| +22 | Real Estate = complicated + underpaid | 15 | 2d | |
| +20 | High achiever that doesn’t want to work weekends | 12 | 15h | |
| +17 | Fisher Brothers | 6 | 2d | |
| +15 | Can you exit from Fund to Asset management or Investment in Real Estate ? | 22 | 20h |
Career Resources
I'm in dev and am looking to move to REPE for a pay bump. Why do you want to do the opposite? Also, need more info. Are you going to a more recognizable firm Will you be learning a new asset class? Is this lateral or a promotion in title? Hard to answer with such limited info.
Looking to get closer to the real estate/be more involved in the actual dev process rather than just from an LP perspective, overseeing the GP... I would be going from a recognizable firm to a recognizable firm.. both mid sized. REPE covers all asset classes, GP covers just one. Lateral in title (although titles at GP are less meaningful), with a pay cut. The reason I'm considering is I feel like in order to make this move, it will likely involve a pay cut regardless of where I go....
I mean, fuck it, do it. Reason I say that is because I think it's important to diversify your experiences when you're young and try out as much as possible. Only way to really hone in on what you want to do long term. 25k isn't that much either tbh so might as well. You'll learn something new, have dev and REPE on your resume, so even if you don't like dev, your exit options should be plentiful. And yes, at junior level, 100% you will be taking a pay cut to get to dev. Might as well do it now when the pay cut is digestible.
What a stupid question.
Would you rather be on the LP or the GP side? No one is going to be able to answer that for you. Whatever the answer is, that is what you should do. How the hell do you expect a complete stranger on an anonymous online forum to be able to quantify the difference? Especially when you provide this little information? Are you making 75k vs 50k? Or 275 vs 250? It's like asking if you want to live in an apartment on the north facing side of a building or the south facing side. A question entirely dependent on personal taste either way, but completely inane without context
Ozymandia has been off one lately lol
We should be discouraging people from asking questions which by their nature cannot be answered intelligently. Shaming the people who ask these questions is the only appropriate response; anything else will encourage it.
I mean, what the fuck did this person expect? They asked a question to which the answer is "what are your person preferences?" which no one here could possibly know. And then compounded the utter stupidity of it by asking if they should wait for a "different opportunity". Doing what, pumping gas?
He's got a point though. How are we supposed to offer any help when we don't know anything about this guy or his personal preferences? If he asked a question about the difference between the roles, or how he should think about the two jobs, or even long-term prospects in the respective areas we'd be able to offer some guidance, but as it stands all I can really say is "go where you want to, you're still young and the money doesn't matter so much at this age", which is pretty anodyne advice.
He’s a bitter lib what do you expect
Lol sure. Projection at its finest.
I came to say the same thing (maybe a little more gently lol)...
OP this isn't a financial question, it's a question about what you're interested in doing. Development is a completely different ballgame than working in acquisitions/PE. The work is way more involved on a project-by-project basis and you'll work on one thing for years at a time and understand every individual detail, instead of underwriting a deal, pushing it through diligence, then getting to the next one.
Development is far more about project/risk management, planning, and creative structuring than it is a finance role in the long term. You need to get a handle on what interests you more - creating something from scratch and juggling a million balls while managing a project, or a more pure play finance role that is transaction-heavy. That is the answer to your question.
I did this, albeit came from non RE and it was a larger paycut (~50k). Absolutely no regrets.
What were you doing before and what made you switch into dev? What do you like most about the switch? Better hours? More interesting work?
He likes picking out the colors for the countertops the most
Depends on your end game. Dev is way way less interesting and entails way way more grunt work day to day. It gives you a narrow chance to go out on your own, which REPE does not really (you’re more likely to raise a fund to build MF than start a fund to acquire preexisting MF in core core plus).
And having been in REPE and dev, the mindset senior folks in development have of junior folk needing to pay their dues and working for shit money because of the experience is pretty off putting. Obviously that exists in REPE, but I would say it's less pervasive than it is in dev. I'm at a very large dev co and they make you work just to earn the year end 20-25% bonus. At this large dev co and often am reminded of how they are “making an investment in me”, despite not making that significant of an investment (dollar / salary wise). Development feels like the poor man’s game, whereas REPE feels like the rich man’s game. Yes, I’m jaded and want to go back to REPE.
Count your blessings. A lot of dev folk don’t even hit 20 percent bonus. “Market headwinds” “overpaid for land.” The rest of your description is spot on.
Why do you say "a narrow chance" ? I am looking for a development job to learn the experience and do my own thing. Love to hear from your perspective.
Most entry level dev employees dream of going out on their own. Most never will. The few that try will work on very minute projects (spec houses, 2-4 unit MF). It is really hard to raise the equity for the first deal, a lot don’t have the guts to try.
Because you need a full skillset and to be a true entrepreneur to do so, not to mention you need a massive amount of start up capital which most people don't have access to.
If it was easy everyone would do it. 99% of people will work for someone else forever.
Right, because sitting in an excel file all day is thrilling work.
Development has a good amount of grunt work (what junior job doesn't?), but you also see a much wider spectrum of activity. You'll deal with finance, debt/equity partners, underwriting, architecture, engineering, construction, local government, legal, all while having to creatively problem solve everything that goes wrong with all of those aspects. People love to talk about how REPE is so great because you see all sorts of deals come across your desk, but the differences are purely abstract, fundamentally you're still just plugging inputs into a model and deciding if you want to invest, it doesn't matter if the rent comes from apartments, warehouses or biotech startups. There are fundamental differences in the work you put in as a developer, walking a construction site to understand why the storm water system isn't going to fit is a completely different activity and skill set than redlining a construction loan.
I started in development and I'm currently in REPE. REPE is pretty boring cookie cutter stuff once you've gotten enough reps in. My learning curve has flattened massively and I'm pretty bored in work now as a result. Pace of work is slower in development, but I'd argue it's much more intellectually stimulating as long as you're not pigeonholed into some niche role of the development process (i.e. just entitlement, or just pre-construction etc).
If you work at a halfway decent development company, you’ll farm out permitting, estimating, and GC responsibilities to a third party. Few legit players do that in house anymore. Doubly so if you’re a national player and not working for some cheesy family builder in a second tier city that could be extras in The Godfather with greasy slick back hair (more common than not in terms of dev company ownership). Occasionally that outsourced permitting firm will need the CEO’s signature for a debris fine or tree removal permit. The CEO be ticked you distracted him from the real work of fundraising and dispositions. Then you can go back to your main responsibilities, contesting every single construction draw/Precon bill and yelling about blown deadlines you have zero control over.
The biggest benefits of REPE is that some let you WFH and a lot can be done on autopilot. Reading 50 pages of Biloxi MS planning commission comments on a variance application will make you question everything
Disagree. More likely to go on your own by working in dev than PE. Reason being you see more of the business and to start on your own, you’ll need to be an operator. Unless you’re super senior raising money, you see more and learn more about how to operate at a developer.
Sorry if I confused you. I meant going out on your own from development is easier than from PE. Becoming a GP and fundraising for ground up or value add is wayyyyyy easier than starting out as a new LP.
"Way less interesting" for you. There are a ton of people that would find development 10x more interesting than REPE (I'm actually a transactions guy, but just pointing this out).
Yea and a lot of people find sniffing glue in their 20 year old pick up in NJ more interesting. No one looking for advice or info here thinks an anonymous internet poster is an encyclopedia make infallible pronouncements. Most people on WSO making the dev v REPE decision will prefer REPE for the reasons I outlined.
Good lord going into development was the most boring thing I ever fucking did. Making PDF maps and doing market surveys all the time for raw pieces of land fucking sucked.
Yeah, that does sound like a shitty job
Crediting. They all think it’s sitting down with the architect choosing styles, schmoozing with city planners, and raking in huge bonuses from condo sales. Your acquisitions counterpart will make more money at every level of seniority, especially at the top end. C Suite will expect you to do the job perfectly, zero brownie points for perfection. Perfection is the baseline.
I started in development and currently in REPE. Looking to move back to development and that's going to cost me roughly 40% of what I think I'll make in 1-2 years time as Principal. If this is something you're thinking about, I'd disregard immediate near term comp and think through what you want to do long term as you'll be financially comfortable in either role. I think there's a lot more opportunity to create upside in development than there is in REPE. The work is also very different and you need to give some thought to which you'll be genuinely interested in. If you're not, it'll be a grind.
A well capitalized operator that plays in one market and does it well is the best place to be in CRE imo.
^this 100%
I took a pretty sizable pay cut from brokerage to development. I know my situation was different coming from brokerage but for me the pay cut was worth it 100%. Might not be the case for you but my wlb at my new shop is significantly better.
Was it difficult to break into dev from brokerage? How were the hours in brokerage? Were you a broker or an analyst?
I'm the same person, but just realized I have two accounts on here (1 on my phone, 1 on my computer). Anyways, it wasn't too difficult because I came from a strong team worked at HFF as an analyst before the merger and had a lot of transactional experience. My skillset felt good, but there were a lot of learning curves that's for sure once I got hired at the developer. I transitioned when the market was pretty good so I was able to talk with a handful of groups that were looking for candidates.
I think I would probably average 65 hrs/week with some outliers here and there that would be more or less, but that was pretty typical. Doesn't seem ridiculous for some people that work crazy hours, but after a while it wore me down and affected my personal relationships at the time primarily with the girl I was dating.
Est quia quia cum ut unde. Doloribus est rerum non fuga rerum. Distinctio excepturi similique est aut ipsa. Voluptatem exercitationem cupiditate expedita velit minus nesciunt. Saepe aut reiciendis in aliquam odit dolorem. Et qui accusantium aperiam earum reiciendis magnam non.
Iusto enim a totam. Iste accusamus ut eos veritatis illum.
Voluptate nemo maiores et quia expedita hic. Nesciunt sint aspernatur sed architecto earum. Aut sit consequatur quidem sit rerum ut quo. Perferendis ad quia veniam sed et cumque commodi. A officia architecto et est consequatur quam adipisci. In quos ut sequi aperiam placeat delectus rerum. Vero corporis sint dolorum enim.
Voluptates voluptatum assumenda animi officia at illo voluptatibus. Voluptate earum impedit quisquam aut perspiciatis harum aliquam. Quasi eveniet laboriosam distinctio quod. Dolore ex qui quaerat.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Rem consequatur ipsum sed quia tempora qui. Ea et consectetur accusantium. Autem unde excepturi sit libero. Doloribus provident quasi molestiae sit omnis ut placeat hic. Voluptatem rem fugiat dicta ea repellendus aut labore quibusdam.
Nihil ut non ut maxime inventore ex. Nihil est laborum sint odio dolore.
Eius quas saepe at eos. Recusandae quia occaecati sunt doloribus eveniet voluptas sed. Repellendus omnis suscipit porro ut.