Where is the money in real estate now?
As a rising senior who will be doing a summer internship at a one of the "big 4," I am trying to learn as much as I can about the industry. In the most blunt way possible, where do the people coming out of college make the most money in the NYC area? Is it investment sales, brokerage, cap markets at these large companies? Which area has the highest growth potential for the following years?
I am trying to use this summer to network and learn as much modeling as possible, but want to allocate my time efficiently. I know I need to find something I enjoy but future salary is a big factor in anything.
I mean there's money to be made in practically any Real Estate Finance/Investments role it just matters on your level, comp structure(carry/bonus % of salary, etc), and also your team. I know guys in IS/debt placement who are big dogs in their market and make an absolute killing, but you can't apply that same level of logic to any brokerage firm.
If money is your biggest driver and you're short-sighted, then don't go work for a brokerage without any relevant Real Estate experience because you will fall on your face and you're going to have to live on a small salary draw.
Long term, the most money is in being a successful sponsor. Medium term, the most money is in rising up to VP at REPE. Brokerage is a crapshoot, you may crack 7 figures in your 20s or you may be a glorified graphic designer...
These are both very helpful comments. Thanks guys!
The short answer is that the most money is made by the people with ownership of the carried interest, or more succinctly, the people taking the most risk.
Generally that means being a principal at a REPE fund, or being a developer, especially in the long term. If the ask is about which positions will pay the best within a manageable time-frame (say... 5 years), that's a different question. But as with most businesses, you make the most money when you are the owner. In real estate that comes along with some additional risk, mainly recourse construction loans, in addition to covering overhead and daily business operating expenses.
Is there a reason its lodging specific? Or just because they're more likely to be off loaded as a portfolio as opposed to something else?
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