RE Upside

I, personally, have never claimed that RE necessarily makes more money than other industries from a W2 perspective. However, generally speaking, I think RE finance/investment roles tend to pay decently and provide better work life balance (people always seem to discount this) than other finance industries such as IB/PE. Obviously there are shops out there that require 90hr weeks and hopefully the compensation reflects that.

Can someone explain to me why whenever anyone complains about RE pay, the general response is that RE has great upside and then proceeds to say you need to own RE to make the big bucks.

Because it is sort of true? When you graduate from college, no firm is going to pay you $150k-$250k to work 40-50hrs a week putting together ppt's and playing around in excel. You get that pay either because you have a more unique skill set that is more difficult attain such as software engineering or you are worked like a dog such that your hourly rate reflects the equivalent of someone working 40-50hrs making $60-70k. If you can code, then go the SWE route to make the big bucks. If you can't code then be a slave in IB. But if you can't code, don't want to work 90hrs/week, want to make a decent living, and have a finance background, then that's when RE may be a good option.

Regarding owning real estate to make money, the reason it is so appealing is because it isn't rocket science, but you can make out like a bandit. Real estate is a highly leveraged asset that is pretty safe in most economies, somewhat protected by the govt (govt won't let it crash), and goes up in value over time in most markets. Where else can you buy a $1mm asset with only $200k? If that asset goes up by 5% (which is very possible after just 1 year), that's a 25% ROE... Find me another asset/business that can generate that type of return, with the same risk profile, and little day to day management.

Anyone can own RE (even a software engineer). How can you possibly use the upside of owning RE as a cope for making less on your W2 from a RE company.

That's kind of the point of real estate...it's that anyone can do it and potentially make a lot, but if you know the intricacies of real estate/zoning laws, ideally through working at your W2 job, you can really get a leg up on those who don't. Take me for example. Before I joined my family's business, I worked at a mid-size developer/RE investor learning different strategies they employed such as entitling properties and value add projects. I then took that knowledge and am now growing my family's business and employing strategies that we never even considered before. Now obviously I am using my family's capital, but even without it, the strategies (namely entitlement) I've learned from the mid-size developer can be adjusted to almost any size project ie dollar amount. I can entitle a $10mm acre of land or $700k 7000SF parcel of land. How many ibankers can work at goldman sachs then source M&A deals and run it? How many PE associates or even principals can go out and acquire a company? But how many RE professionals can acquire RE on the side and apply some things they've learned from their job? If you aren't using what you learned from your W2 job to make investments on your own then that's kind of on you, not the industry.