Brand Name vs. Small Shop
Two years out of undergrad (did a year in IB), no past experience in RE before my current job.
Currently one of four employees (responsible for decks and models, one rainmaker, two back office roles) at a REPE that syndicates all of its deals. Could I get your thoughts on jumping to a bigger REPE / developer vs. continuing to build the shop that I'm currently at.
Comp is: Salary (below / in-line with market) + % of Fees on Closed Deals (12.5% of fees per deal) + Carry (
This depends on how good your rainmaker is. If you see potential in making a shit ton more money down the line by being his right hand man, then that seems to fit your goals much closer. Other shops may not be so quick to give you carry at such an early point in your career. Real estate is a slow, slow game. It takes time to build wealth, and if you are getting a piece of the pie two years out of undergrad, it can only get higher from here on out.
Could not agree more with @VCWannabe"
It sounds like you have about 3% of the carry, which is honestly just insane after only 2 years in the industry. That number will only be set to grow as you develop as a professional and as a shop. If you think you're getting to a point in 10-15 years where you can reasonably think you'll have 10% of the pie with no startup risk... well, most people on this site would give their left foot to have that kind of ownership in their mid-30s. You have a pretty incredible deal, one which much more senior and experienced folks can struggle to get.
The only downside is if you think your shop isn't set to grow or have long term success. That's something only you can evaluate, but if you think there is a decent or even only okay chance of that, you should be sticking this out. Worst case scenario you can always jump to a big player later on, with the experience you've gained.
Thank you both very much for your thoughts.
Yeah, I'm in a very unique position so just trying to understand how to gauge my situation We closed on two assets recently so we have stable fees coming in for the next little bit; our goal is to keep generate enough recurring fee revenue to hire another junior so that I can become another operator / rainmaker. I think the likelihood that I would get this type of experience anywhere else is next to zero, but a part of me keeps getting pulled into following the "traditional" route to have a broader set of skills/ experience.
We'll see how it goes, really appreciate your advice / insight @VCWannabe" Ozymandia.
Unless you don't like the job/firm for some reason, I would stay, it sounds like a great deal.
Play the long game, build a reputation of doing deals/track record. Network so you are visible and keep your skills at top level.... and wait for the headhunters to call you in a matter of years (like once you have 5+ years of exp). I wouldn't move unless a significant jump up in title, responsibilities, and pay. After five years of exp, you may need to move if you can't move up there. Long-term, you should a partner at a firm of this size (so, that is the real test of longevity).
If you do think it is a max 5-7 year gig, then I would maybe recommend a part-time MSRE or MBA if offered in your market. That would make your educational profile meet experience for much more senior positions.
I think this is great advice.
Thanks a lot for the insight!
Yeah, I think I'm falling for the whole "grass is greener" trap when I have a pretty awesome opportunity on my plate.
Sounds like you have a real opportunity here, hope you stay long enough to take it. Being this close to the action you can either stay long term and help it potentially become a giant or start your own and have a solid relationship and have it easier to raise capital.
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