My goal has been to be a CRE investor/GP in the future. At this point I’m at a crossroads on where to go.
I am 1.5 years into my first role at a large CRE lender (think Berkadia/WD) and haven’t gained any real tangible skills that I need to do well in acquisitions. Thus, have had a hard time moving into an acquisitions role.
I have the opportunity to move South and pursue a capital markets analyst role at the same firm, try to apprentice or find a gig at an acquisition shop while trying to purchase ~20-plex on my own, or try and modernize my families ~350+ unit multifamily portfolio and use their track record and help to try and scale it larger. I’ve been also pondering an MSRE program but not certain yet.
I have understanding of how CRE works, have take classes, and financial modeling courses. But what I lack is true institutional experience or deal seasoning. What would be your path? Just confused on how to proceed and have too much time on my hands with WFH.
Thanks for any input.
Can’t offer much help on what your next step should be. However, you’re only 1.5 years in, so you have time. I was recently talking to someone who now runs their own firm, he didn’t even know what real estate was when he started. Fell into it because he had no choice and then fell in love with it later. He started in lending like you, moved into investment sales and then a developer. Now he’s in his early 30’s and is very successful.
In some ways you’re ahead of this guy, if your family has connections to HNW individuals that could be very useful once you gain some acquisitions experience, CRE is a family business after all. I’ll leave actual advice to other posters, but just wanted to tell you that.
So, the real question here is are you really wanting to pursue and institutional real estate career or do you want to focus on more private investor market deals (i.e. the 20-plex, 350 unit stuff you reference)?
At this stage my advice would probably be the same, stay where you are until you have a clear picture of what you want to do. I don't think you need to rush at all, and in a year or so, you will be more marketable and have a clearer picture of next steps.
I would start networking and researching moves like you are doing now, but not likely the optimal time to jump, laterals are not great moves quite often.
Perfect advice. SB.
I guess to your point I’ve always wanted to own and run my own deals and possibly start running syndications in the future as my capital will surely run out after a point. I don’t think long term institutional CRE is my cup of tea, simply because I see myself wanting more freedom and not being tied a trade time for money role. The reason I’m a bit weary of staying in my current role is that it’s back office work not front line debt production work either. Realizing that the principal side for me is where I want to learn so maybe the capital markets role isn’t enough of a reason to move down south. But maybe I should try to find work or even an internship with a syndicator or full acquisition firm? Possibly through networking and cold calling/emailing?
redever to add to that, I think that pay is important but I could forgo for a time if I was presented with a great learning opportunity. Not sure if that’s a smart move. But think that if I’m able to even apprentice or intern and throw it on my resume it may be a decent stepping stone into either fully moving into acquisitions or going towards private deals afterwards.
So, can you give a little detail on what you mean by "back office"... like do you mean true back office operations/servicing (i.e. not a real finance/real estate job), or do you mean roles like credit analyst, underwriting, or some other part of the lending process that is not client facing (i.e., is it a true finance/real estate job).
My thoughts and advice are going to be massively different based on your answer.
Yes it would be true back office work like operations. Thank you for taking the time to understand my situation
Got it! So you are really looking to do more of a full on career switch/jump, which makes this both more difficult, yet easier in some ways.
More difficult in that you would be looking for your "first" true real estate/finance job. Assuming you have the basic background, some training, and can interview for those roles, you stand as decent chance as any of your peers (who all find ways to make it work). The obvious most easy way (and I think you are suggesting it is a possibility in your post) would be to "jump" internally at your firm. If they know and like you, networking internally can be a relatively easy goal to make this work. But, if you want to start interviewing elsewhere, not as much need to "wait" as you are getting close to the two year mark anyway.
The "easier" part is that you are not really leaving a gig/path that you care as much about. Thus, there is overall less risk, and where you go doesn't matter that much so long as it is forward progress. I would suggest you look at all analyst type roles at principal shops, brokerages, and other capital market type firms. Even commercial appraisal could have value.
After a few years at that stage, then you can reassess what you really want to do, but no sense in stressing it now. Just focus on the next step, truly breaking into the industry. Trust me, it really doesn't matter where/what, just start. You may want to do a grad degree in a few years, and I could argue starting next fall is not a bad idea, but still think its better to see where you really want to go before deciding on grad school. No rush on that either.
Coming from a GP/sponsor, I would encourage you to sit tight until you have a more clear vision for your future, just as the others above have referenced. I have found that most successful sponsors do not happen by accident--they are a group of former VPs or attorneys who have cut their teeth and had a very intrinsic understanding as to deal flow, capital stack, and the relationships necessary to make the cogs work together.
Having 18 months (!!!!) in experience, you likely don't have the cash to float when necessary, nor the proper relationships in which to raise it. Not a shot at you--I was in your shoes a while ago too. You are closer than you think--the experience needed to succeed in this space is far more important than your cash on hand or ability to raise money. Work on seeking experience first, and surrounding yourself with someone who can aid you in your pursuit. The rest will fall into place in due time. Don't lose patience.
So basically focus on the basics.
sorry... it was too easy.
Thanks that is good to hear and makes a lot of sense. To your point do you think gaining a better understanding of deal flow, deal structuring, capital stack, etc. from networking and starting a role in acquisitions would be the best bet in going on my own/taking over small family firm in the future rather than staying in back office work at a GSE lending shop?
I know it hasn’t been that long but Im not gaining nor do I see myself getting exposure to the financial modeling skills and deal exposure you mentioned in my current role.
Are you on a deal team? Because usually those analysts have solid exit opps after 2-3 years, which includes GP/LP roles
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