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Outsource it to indian excel wizards
Real question. Why don’t more companies do this? Or atleast smaller private shops ?
Modeling is not rote/automatic, it is the language of the deal and its mechanics, you would never outsource a very critical step in risk management and investment decision making
Truth is that you need to know it, but eventually you learn how to model better than your superiors. The analysts are the lifeblood of many of these shops and they like to use you until you cant function anymore. My suggestion is to apply elsewhere. The days of an analyst moving up to CEO are long gone and very few see this happen. Its better to take your experience and go to other shops that slowly let you handle more direct tasks then being an excel monkey.
Delete. Delete. Delete.
Delete. Delete. Delete. Delete. Delete. Delete.
Pretty much, analysts know all the models. If they let the analysts go, these shops wont function. I dont think the CEOs or MDs are gonna start modeling assumptions themselves.
Go read, Cal Newport's "So good they can't ignore you" great book and will help you understand why mastering the fundamentals is critical, and the dangers of 'starting out on your own' too early. In short (part of book paraphrased), when you are young and inexperienced it is the worst time to take entrepreneurial risk, far from the best.
That said, if you are looking to approach real estate from the finance side (as opposed to brokerage, law, construction, architecture, etc.), then understanding the financial metrics and market analytical challenges is crucial to add value. You are not just keying numbers into a spreadsheet and letting it spit out an answer, you are actually analyzing and even structuring the deal. The models are tools for negotiating and making investment decisions. It is also crucial to be able to do any forms of advanced structuring equity investors and joint venture partners.
This business is not easy, it really does take years to learn and really master. There are no good shortcuts, and there is very much a reason everyone has to do "stints" as analysts (for those on that path). Prime example, if you were not extremely well versed in modeling, would you be confident in being able to structure a complex equity investment with partner needed to fund your own deals? Waterfalls, promotes, contingent fee payouts, clawbacks, IRR hurdle based performance metrics, and other items should be well understood by the principals.
This is way lawyers and architects who go into development at senior/entrepreneur levels often take the time to learn modeling and financial analysis, they are blind without it. Until you can really provide value in some domain, you really shouldn't feel like you are wasting your time.
Ok what else can you do? You want to be the relationship guy? How do you think brokers will react when they have to deal with a 25 year old kid who barely knows what a dcf is... (not trying to be a jerk here just want to give you a dose of reality)
Think positively man. Put in your time, get some good network with the brokers and you will be on your way pulling in your own deals soon. Remember your 20s is for learning. Your prime years are yet to come!
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