Comments (34)

2mo 
Jondoe007, what's your opinion? Comment below:

One day I have my gold shovel ceremonially starting a project on a recently closed deal, and the next I'm meeting with a developer at a lot. In short, the variety is what most appealed to me. Hbu?

2mo 
Ozymandia, what's your opinion? Comment below:
ctc19

Greatest wealth generator in the history of this world. Has created more millionaires than general finance careers, by multiples 

I mean, this isn't a controversial statement, given that until exceptionally recently (in historical terms) there was basically no wealth without land.  Whether it is renewable wealth (food) or extractive wealth (metals), all of that was based on land ownership.

Moreover, there is a big difference between working in real estate and owning real estate.  While real estate ownership may be a great way to wealth, working in finance is certainly more lucrative from an employee's standpoint

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2mo 
ctc19, what's your opinion? Comment below:

I guess that's true but the first step to understanding how to invest in real estate is understanding it, so by choosing a career path in real estate moves you closer to that goal. 

Whereas, working in finance will lead you no more closer to building actual wealth other than collecting a paycheck. Numerous posts from IB bros with extremely poor financial positions and almost no ability to discern a good investment from an absolute con. Skills are much more transferable with real estate and allow you to be an entrepreneur with almost no barriers to entry (an if ya didn't know, almost everyone who works in real estate, owns some form of real estate)

  • 2
2mo 
Pierogi Equities, what's your opinion? Comment below:

BECAUSE IT'S TANGIBLE

Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.

  • 5
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2mo 
jarstar1, what's your opinion? Comment below:

I got to real estate from all angles, it's an interesting story. When I was young I always loved houses and the design of houses, and I read about architecture. In high school I wrote a term paper on Frank Lloyd Wright, and for my senior project I worked with a local architect to learn how to put together architecture drawings. He was old school, he still did everything by hand and hired a dude to copy everything he drew into CAD. He showed me how to use a straight-edge and a French curve, how to lay out a kitchen and a bathroom, how to avoid plumbing in the exterior walls and how the exterior of the house lines up with the interior through the alignment of the windows. It was a fascinating experience, and I loved architecture in the abstract, but I knew I wouldn't want to be an actual architect.

So I went to get my degree in engineering, mechanical to be specific, I wanted to work in the auto industry. I was in love with cars (still am, but I no longer harbor pipe-dreams of working for Rolls Royce or Cadillac), but realized very quickly a) I wasn't as good of an engineer as the guys who worked for the big car companies, and b) I wasn't at a program that they recruited from (similar to finance, there are targets and non-targets, and my dinky engineering program was definitely a non-target). None of this is to say I wasn't a good engineer or I didn't learn a lot from my program, I just wasn't quite the technical whiz that the Big 3 demanded. Meanwhile, my roommate and best friend in college introduced me to finance since his father had been involved in high finance across a variety of functions for decades. I started reading the intro books everyone knows, Monkey Business, Liar's Poker, The Big Short, and all the Vault guides I could get my hands on. I wanted to change my major but most of my scholarship was for the school of engineering (besides, I did really enjoy studying engineering, I just knew I didn't want to be an engineer), so I studied on the side, got the books and took the CFA I (lol), and interviewed with hedge funds, mutual funds and AM shops. I got rejected from all of them, all saying I didn't have enough finance knowledge and they didn't want to spend the time to train me up (didn't they read my resume?). So I graduated and got a job in the industry I had my one internship in, construction, with the intention to get my MBA and transition to finance later on. 

I looked at a job in construction as a way to learn project management and the soft skills required working in business, I had the technical background, I knew I could do the math, but I needed to round out my experience. Construction was honestly a huge culture shock, I couldn't relate to anyone I worked with despite them all being around my age, and I fell into a depression for the first 3-4 months. But then I started working with an architect out of Chicago and we clicked from day 1, which made the job a lot easier. I got to learn so much about construction drawings, the construction process and how to work through issues. My engineering background helped not from any sort of technical aspect, but to develop a knack for understanding how to think abstractly about the physical world: taking two dimensional drawings of plans and elevations and converting it into an understanding of 3D space and how to resolve conflicts and issues. I continued in my career, getting raises and a promotion, but I still had my eye on an MBA. I took the GMAT, got a good enough score for a T-20 program, went to the school fairs and school presentations, applied super early (R1 after only my second year of employment) and got into my target school. At this point my goals had shifted from a pure finance role to real estate development, and I ended up matriculating with 2 years, 8 months of experience, starting my program at 24 years old. 

I was young and insecure about my seat at my MBA program, being surrounded by people with years more experience and far more knowledge about real estate finance than I did (I didn't even know what an IRR was), but I soon learned, taking modeling classes and all the real estate classes my school offered (which was a good amount, it's a school with a very good real estate MBA program). Along the way I took classes in art history (Survey of Western Art Pt 2: The Renaissance to Modernism, and Theories of Architecture), visited many architectural places of interest (Fallingwater, the Robie House, the Farnsworth House, and many buildings in LA, NYC, Chicago, Detroit, Paris, London, Berlin and Tel Aviv), and continued my interest in building technology, doing my masters thesis on 3D printed concrete. I had an internship with a CM and another with a real estate consulting firm, and eventually landed a full time job with a residential developer. After all that I finally got to where I wanted to be, I love the management part of development, I love working with architects on designing plans, working with interior designers to select FF&E, and working with the marketing team on our brand materials. I'm learning to love underwriting haha, but that is never going to be my core competency, so I'm content to let the analysts do the heavy lifting.

So long story short, I got involved in architecture, design, construction, and finance, and blended it all together for a career in real estate development. 

  • Associate 3 in RE - Comm
2mo 

One thing I like about real estate, especially development, is that it exposes you to a huge range of society. The other day I went to a site and met with a grizzled site super who's spent 40 years around excavators and dump trucks, and then left that meeting and went to see our investors at a big PE firm. And then there are elected officials, bureaucrats, engineers, architects, lawyers, brokers, property managers, crazy abutters at public hearings, nerdy accountants, charismatic brokers, tenants of all kinds...the list goes on indefinitely.

  • Principal in RE - Comm
2mo 

Honestly? Of all the rich people I met growing up (not a lot) the ones in real estate both: had the most control of their time and were the dumbest

FWIW by dumbest I mean not rocket scientists. You have to be incredibly smart, lucky, driven, etc to have outsized success in majority of fields. Majority of the RE folks I know just plotted along and bought things that seemed fairly priced and stewarded them well (didn't go bankrupt)

2mo 
Ozymandia, what's your opinion? Comment below:

Majority of the RE folks I know just plotted along and bought things that seemed fairly priced and stewarded them well (didn't go bankrupt)

This sounds pretty smart, to me.  People in real estate, the good ones, take a longer term view than people in other industries, I've found.  It is an industry that rewards looking forward and thinking in years or decades and not days or months.  I say this often, but the best real estate operators are the ones who have survived multiple downturns and market corrections.  Every boom cycle, especially one like we just had, is going to have lots of people who get rich very quickly by betting the house on every deal.  That works great, until you lose one spin of the wheel and lose it all.

I mean, at the end of the day, who is smarter - one of the principals of LTCM, who were all acknowledged to be geniuses, but who bought into their own PR and lost most of it?  Or the family that buys a building, manages it well, doesn't overextend, and ends up in an unassailable financial position?  I get the argument you were making, but any idiot can make money trading, too.  The sign of a smart businessman is who is left standing after everything blows up, not who does the best when everything is going well.

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  • Principal in RE - Comm
2mo 

Exactly right. If you are in the business of personally owning RE assets for you/your family, your job is to #1 not go bust #2 make some money. Now when you start investing OPM, then the math begins to change, then when you become a platform, it really changes.

But up until then, your goal is to stay afloat. 

2mo 
Bigbodybugatti, what's your opinion? Comment below:

Dude I just want to build a skyscraper in Manhattan before I die

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1mo 
IcedxTaro, what's your opinion? Comment below:

So, what are the difficulties of buying a commercial unit versus a residential unit at an investor standpoint?

What capital are required?

I am familiar with the basics of purchasing a du-tri-fourplex unit, with the FHA paperwork.  However, are the same principles applied to a commercial unit?

If one were to be a property manager/leasing agent for a residential apartment (think 50-300 units) versus a commercial property (businesses), are the experiences different?

1mo 
bruce1, what's your opinion? Comment below:

Used to drive industrial markets with my old man when I was a kid and he'd tell me deal stories which seemed fantastical given the amount of money involved for what I believed at the time to be worthless concrete buildings. Seemed cool that you could be semi involved in all of these interesting industrial businesses as well. Also he had a couple tenants default and we got all of their equipment which I would help him sell for a cut which seemed cool to me that you not only go to collect rent from but if they messed up you got to take their stuff. 

Also I babysat for this guy when I was in HS who had the most insane house I have ever been in to this day, so nice the home magazines would regularly have photoshoots there. He would constantly be on the sickest vacations imaginable and had a smoking hot wife. Talked to him a bunch about his business and decided to try an emulate it as best I could (still not even close). 

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1mo 
nessy, what's your opinion? Comment below:

I got into RE to legitimately make as much money as possible. 

Over the past 20 years, family friends who accumulated a bunch of RE had done really well. Depending on the product type, some starting with one property that they cash flowed and continued to re-invest the cash flow/re-lever to buy other assets. Some accumulated wealth elsewhere then invested in RE which fueled their net worth.

Being in RE My belief is that unless I go and raise OPM, I don't think what I'm doing right now will ever pay me a significant enough amount to start doing stuff on my own.

As referenced above, I guess the question is do you want to just invest in Real Estate or be in the Real Estate Business. If you want to invest in RE, there may likely be faster ways to generate funds to buy a few properties here and there. If you want to be in the Real Estate business, then might as well get in from the beginning.

1mo 
greenlander., what's your opinion? Comment below:

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