Tell Me About a Deal You Worked On - What Do Associates+ Want to Hear When Asked This
I've heard they want to hear a story and discuss the more qualitative features (location, market demographics. business plan, market rents, etc) for why you did or didn't go through with it vs actual hard numbers as those are more reviewed after and would not be a sole reason for going forward with a deal.
Thoughts? I've gotten offers from discussing a deal (x units, tertiary market, IRR was in range didn't move forward bc YOC spread was not high enough, too tertiary of a market, and supply metrics). But I've also not moved forward with the same approach so curious if someone can outline what a good answer is clearly?
Based on the WSO threads and discussions, when answering the question "Tell me about a deal you worked on," associates and higher-ups generally look for a narrative that showcases your analytical skills, decision-making process, and understanding of the market dynamics, rather than just the hard numbers. Here’s a structured way to approach your response:
Background of the Deal: Start with a brief overview of the deal. Mention the type of deal (acquisition, refinance, etc.), the location, and the property type. This sets the stage for your narrative.
Business Plan and Strategy: Discuss the business plan or the strategy behind the deal. Explain why the property was considered, what the expected benefits were, and how it fit into the broader portfolio or company strategy.
Market Analysis: Highlight your ability to analyze and interpret market conditions. Discuss the demographics, market rents, and economic factors that influenced the decision. This shows your understanding of how external factors impact real estate investments.
Qualitative Aspects: Elaborate on the qualitative features such as property location, community, tenant mix, or unique selling propositions of the property. Associates often value insights into how these factors contribute to the success or failure of a deal.
Decision-Making Process: Explain the rationale behind moving forward or not with the deal. Discuss any challenges or hurdles that were encountered and how they were addressed. This includes explaining why certain metrics like IRR, YOC spread, or supply metrics were critical in the decision-making process.
Outcome and Lessons Learned: Conclude with the outcome of the deal and what you learned from it. Whether the deal went through or not, highlight how the experience has refined your analytical and decision-making skills.
Engagement and Interaction: Throughout your narrative, make it clear that you were actively engaged in the process, interacting with different stakeholders like brokers, management teams, and legal advisors. This demonstrates your ability to work collaboratively and your understanding of the importance of relationships in real estate deals.
By structuring your answer this way, you not only provide a comprehensive overview of the deal but also demonstrate your strategic thinking and market knowledge, which are key aspects that senior professionals look to understand in your experience.
Sources: Life in Acquisitions (Analyst/Associate), Q&A - Post-MBA VP, Q&A: Analyst --> Associate at a VC / Growth Equity Firm, Associates who “Do” vs. “Review”, https://www.wallstreetoasis.com/forum/real-estate/walk-me-through-a-deal-you-worked-on-interview-question?customgpt=1
I’d think of the question as an opportunity to share your opinion and thought process with the interviewer. It doesn’t tell them much if you just share details about what your previous firm has or hasn’t invested in- tell them your thoughts. Do you agree with the decision to invest or not? What do YOU think about the deal strengths, forgoing the actual numbers. What’s the story, how do you tell it and interpret its value, and also, how did you play a role in the story.
Don’t over complicate it, it’s just a chance to talk shop; focus on what you would focus on. Let your honest intelligence and thinking shine through.
Could you give an example? I'm still caught up on sharing the numbers because outside of that it would be me saying, I did not like the deal - the market was too tertiary, population growth was declining, current rents were the top of market, and there were no major employment bases in the area that would have demand for a higher quality product if we were to renovate. Good?
You should tell them what you did, not about the deal. They don't care about that, and you probably had little to do with the decision to invest in the first place. What was a challenge you overcame? What was a snafu that you took initiative to sort out? That is what you should focus on. Who cares if the deal was successful, or what the land basis was - none of this has anything to do with you as a person or a professional.
Maybe the lender had a bunch of last minute bullshit questions that you walked them through. Maybe you had some comments about unit layouts that got incorporated into the eventual design. Maybe you took over the requisition process early on because you took the time to understand it. Senior people will want to know that if they give you an open-ended task, like "accomplish XYZ," that you're going to be resourceful in carrying it out and not come back to them every time there is a hiccup. That's real estate in a nutshell, anyway - solving the inevitable problems and frictions that come up in a complicated multidisciplinary field.
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