Where’s the most upside in CRE for people starting their career?
REPE or Top dev shop (and ES, top brokerage) roles usually carry the most “prestige” and salary/comp but 70+ hours (currently at one of these).
However, it’s usually pretty crowded at the top and working for one of those shops has limited upside (beyond already-anticipated salary/ bonus bumps) since they are “proven models.” Harder to be a successful “cowboy”in this industry given how much its institutionalized.
For those that are more entrepreneurial and don’t want to climb the MD ladder, seems like the only way to make REAL money and own your schedule is to: 1) start your own GP/dev shop (which is increasing difficult unless your strategy is extremely differentiated OR you’re relying on existing capital relationships) 2) Go balls-to-the-wall in brokerage for a couple years and start making big commissions assuming you’re differentiated and can hack it. I know guys guys a couple years in that pull 350-400k+. Then you can invest that capital wisely… 3) Go to the capital markets side as an intermediary either as a debt broker OR an equity /investment adviser in the BD Chanel 4) RE Startup?
Thoughts on the areas with the most upside for young people in CRE that want to make real money?? I realize the above are generalizations and not always the case for everyone but even for career paths with more barriers to entry, what are the top areas of the industry to be in?
You'll probably see this posted all over the forum, but any role in which you get carry from the deal on the principal side, or a hell of a salesman on the IS D/E brokerage side. You can go to a Blackstone, Brookfield, Starwood, etc. and make very good money and by the time you're 28-32 you'll be a VP pulling down $400k if you do well. Or you can go to a MM or smaller dev/REPE and make 50-75K out of UG and by the time you're 28-32 you're getting carry and annualized comp can come out much much higher ( or nothing at all if you're a bad investor).
Being "young" and "making real money" is all relative in RE. RE is traditionally an older person's game so someone in their late 20's making mid 6 figures is rather young, but in the grand scheme of things I wouldn't say someone in their 30's is old by any means. Plus, there are people in the Midwest who will get their $200k annually and a massive check when their carry hits (maybe quarterly distributions too if they're invested in their deals) and call that "real money" since CoL is much less there. Then there are people who are IS brokers or started their own shop in a tier 1 city who make close to $1MM and have the exact same standard of living as the person in the Midwest.
In RE there is no "quick" to make real money like there is in more traditional finance. RE is the long game, and you'll see a lot less millionaires in their 20's here than those who got rich off of crypto, options, seed investing, etc.. Fastest way to go broke or rich is being a IS broker and get reallyyyyy lucky or have amazing connections and get some very high valued deals to get commissions on them. Otherwise, you'll pay your dues in your early and mid 20's in REPE/Dev, and hopefully learn enough to invest in your own deal (something relatively small) or develop your own property by the time you're 30 and have enough reps under your belt to be able to manage the entitlement process and coordinate all the 3rd parties.
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