I am struggling to make a LIFE CHANGING decision. I have two offers that are very different.
Offer 1 is with a brokerage: it took about 6 months and 8 meetings to get the offer, these guys moved slow through out the process. I developed 2 financial models, completed a personality and IQ test, wrote about 5 pages of materials, etc before they made me an offer 6 months later. I told the team I don't want to be an analyst but I am being hired as an analyst/broker but my responsibilities are building new disposition/development models for the team (and train the team on the model) and creating ~3 models weekly for BOVs/OMs with write up. Secondarily, I am responsible for 50 calls weekly on their listings (set up 4 actual meetings) and other ad-hoc. Base is $55K with opportunity to get to $100K+, I need to bring in a deal or two for the team to get to that range. My second year, I will lose the base and go to 100% production and I am not sure if it's possible to do all the analyst work and make the business development calls to get to $100K. I live in a core market like SF, DC, Boston with a high cost of living.
Offer 2 is a boutique REPE shop to do acquisitions, they are small with $100M in capital and they want me to join as an associate responsible for acquisitions. Process took about 3 weeks. I will be involved in the overall deal process from looking at the deal through the actual purchase with some support for asset management and potential dispositions. I can get to about $130K all up (still small for standard PE less risk).
Offers are different but my concerns are below. I come from a strong data analytical/real estate background but I made it clear at the beginning of the chat with the brokers I want to leave analyst (bitch work) type work to production work. I have a strong background in modeling and the role as described is to do exactly what I don't want to do especially for shit pay where brokers control your destiny. The team at the "brokerage shop" wants me to create all new templates, etc for their team for development and dispositions. I am also responsible for making 50 calls weekly and doing some other due diligence along with doing financials for 2-3 OMs/BOVs weekly.
PE shop in my opinion as little dry powder but I will have a good work/life balance. Process was smooth and direct.
What are your thoughts??? Need to make a decision in the next 24 hours. Counting on you WSO peeps.
There's a lot of moving parts in this question which makes it harder to answer. Some questions to ask yourself:
What do you want to do long term?
Which team did you get along best with? You're going to be spending a good amount of time with these people so it's important that you get along.
Are they both in your target market?
Is this broker team the asset you want to work with long term? I would ponder over the above questions and then start moving towards making a decision.
From reading your post it seems like the Private equity firm might be better for you. You say you don't want to model and do "bitch work" but I can almost guarantee that's what the brokerage firm would have you do. You are just starting out on the team so you aren't going to get a lot of the sexy, fun and exciting work. This broker team is going to want you to work your way up and show that you can do the unexciting work before you move on to the fun work. With your above layout of your day to day it seems as if they want you to start off as a broker in training/analyst hybrid. I am sure 90% of that work will be analyst work. 50 calls really isn't a ton and you could knock that out pretty quickly. Not saying there's anything wrong with that position but from what you said above it seems as if you wouldn't enjoy it. As far as pay I would just look at it as they offered you 55k. There is no guarantee that you will bring in any business in the first year. Especially when closings can take upwards of 6+ months.
Offer 2: This seems more aligned with your interests. You do have some support tasks but it seems as though you will be more involved in the deals. Probably less support work than the brokerage. Better work life balance is a plus, and you are making more. Since this is a smaller fund you will most likely be able to wear a bunch of different hats and get better overall experience. I don't have a ton of experience in the private equity world but it seems as though deal flow would be the most important thing here for your exit opps (if you want them).
Ultimately it boils down to what you want to do long term.
If you want to be a broker then take the analyst job.
If you want to work on the buy side then take the private equity job.
OP what is your current backround?
Sounds like you've already answered for yourself. Go with Option 2.
Option 2 sounds like a clear winner. The size of the company might actually work in your favor - you have an opportunity to grow professionally alongside the fund, which in the long term means better incentive pay, better experience, and probably better exit opps.
Aside from avoiding bitch work, what is your career goal at the brokerage? If it's just to get experience and move on, why not do that somewhere where you might end up getting a bit of carry in 4 or 5 years?
long term, i would love to be a broker! it fits my personality to shot the shit and being analytical helps me take a different approach in analyzing deals and being value add.
i somehow find my self in analytical roles but it's not what i enjoy.
i am fine not having a work/life balance. I am fine to grind but also want to be rewarded for it! The brokers want me to build new models for them and teach their current analyst, 2 brokers and other support how to use the model. Building 3 models weekly, 50 calls for existing listings and also trying to drum up new business is what freaks me out. Most associates on teams focus 90% of their time on business development with 10% on analytics. Looks like I will only get 20% of time for business development which means i might be stuck as an analyst making $55k. The number will drop to zero year 2. My main concern is if i will have time to make the calls to set up meetings and close a deal or two. Still paying off some grad school loans, need to make a strategic decision. Brokers are looking out for number "uno" so reason I have to be more careful so i don't get screwed.
My background is in real estate acquisitions/development and corporate banking with an MBA from a top 10 school.
Where are you located OP?
I know you have put in a lot off effort to get the offer, but it sounds like it might now be the right fit. You're well qualified, if not over qualified, to be in a producer role. Leverage this offer and meet with other IS teams in the market and see if there is a better fit. That said, don't lead with your financial analysis/modeling skills. Be a salesperson who happens to be an expert in modeling.
feeguy are you a broker?
feeguy hit the nail on the head above. What you need to do if you really want brokerage is make it clear that your value add is that you are someone who can be a producer but who also has the analytical skillset and can teach/manage the junior analysts and people on your team on the financial/technical side of things as well. You should make it clear to that or any other team you talk to that you are fine with managing that part of the process, but that you expect to be primarily focusing on production after the first couple of months when the other team members learn the models.
Regarding PE, I hate to break it to you but you're going to be doing the grunt/analytical work on that side as well for a while. Being the top person in an acquisitions team is almost identical to brokerage in several ways, the first of which being that you have to 'sell' your deals to investment committee/BOD/other type of glorified investor gatekeeper team. The second is that it's 100% based on your network, which will take time to build in either role. It sounds like you could turn either opportunity into a good situation, but just know that going in. Your first 2-3 years at minimum at the PE shop or a similar one will probably be underwriting/deal execution/grunt work, since it takes time to understand the acquisition process and everything that goes with it to a point where you can run your own deals (ALTA, PCA's, Phase I's, BOMA reports, Title/Zoning/Legal, PSA negotiation, etc.).
From just you describing the brokerage opportunity, it sounds like this could be an absolute disaster.
Of course the fund can as well, but I would still go for that offer instead.
my concern with the brokerage role is that i am 55k for analyst which is 90% of my work and 10% business development which is dependent on me to get to 100k+ for total comp my first year. (i would have to bring in a deal or two to make 45k+ bonus which will be at the brokers discretion).
most folks doing brokerage spend 80% of their time doing business development (cold calling, research, etc) and 20% doing analyst work for BOV to make $30-40K year one.
the brokerage already gave me expectations and responsibilities as an analyst. if i push back on 2-3 OMs, they will fire my ass or not help me succeed until i quite. or i can be a superior analyst making 55k and the brokers get all the upside!!!
my fixed costs are close to 70k in my market due to student loans :( . i will be fine taking 40k as an associate (business development 80% / 20% financial modeling) while using my savings to self sustain. i make close to 160K now but i really hate my job doing data analytics!! just trying to avoid the analyst trap! i know guys who have joined H*F or other shops as analysts and left after putting in their time due to the broker BS "trap" of promise to make "great money" and they find themselves working 70+ hours for 80K total comp.
Then counter with another compensation structure.... If you are going into real estate without being willing to negotiate an initial offer you're going into the wrong business.
feeguy are you a broker? also, i made it clear at the beginning of my chat with this shop/team that i don't want to be an analyst anymore and that's why i want to move to brokerage.
based on the role description, it's mainly analyst work with me taking on all the risk.
the worst part to me at this point is that they want me to develop new models for their team. currently they have an unleveraged model. the model i built for them when they asked me to do a modeling assignmed included leveraged and unleveraged IRR, COC and sensitivity tables at purchase and exit based on price changes. they told me my model was better than their current model they have in house. they also shared their model with me. on 30 day task to accomplish, it includes building new development and disposition model to TRAIN THEIR TEAM ON!! for 55k along with my responsibility to CREATE MY OWN BUSINESS development LUCK, not sure it makes sense.
I feel like you are going in circles with your responses. You've already told us what they expect of you and what the offer is on the table. If you don't like the current setup/offer, which it's clear you don't, your options are to: a) take the offer anyway and roll the dice, which is obviously irrational and not a good choice; b) decline the offer outright, which means you might be leaving cards on the table; c) do what you're going to have to do anyways on the brokerage or principle side and NEGOTIATE a better offer, and be willing to walk away if they don't concede any ground. You have another offer you're leaning toward anyways, FFS... the worst that can happen is you just take the other offer.
going in circles due to folks saying i should take it after going through 6 months of hazing and others saying option 2 is better.
i see the upside and risk in both opportunities and 2 brokers have told me my deal is shit.
the PE firm sounds good from a work/life balance standpoint and i know i will be modeling there as well. just worried that everything is favored towards the broker based on the current set up. they didn't budge on increased pay and said no one has asked them for more money before.
Brokerage 100%. In 2-years there you will be able to interview with any REPE shop you want.
Bro, you should be hitting up the Yoruba, and even Igbo and Akwa Ibom in real estate. You guys are surprisingly well-represented.
This really comes down to your interview with the PE shop and what you see the shop doing in the next few years. $100M is plenty to get a few meaningful deals done and get some good experience on your resume. I would also be interested to see what other type of work you would be doing in the PE role. From my experience, positions at smaller PE shops tend to have little to no job descriptions. One day you may be doing acquisitions and screening and the next you may be doing fundraising and marketing. This is not a negative by any means (especially early in your career).
What it comes down to is your feeling about the guys running the PE shop and their experience. When the inevitable downturn comes, will their strategy survive/prevail? If you have any hesitations about the shop/strategy/personality of the leaders at the PE shop, go back to the brokerage and negotiate a better offer. Just my $0.02.
@OP
I was in the exact same situation about 2 weeks prior. Both of these are long-term plays but really depends on what you want to become and what kind of knowledge you'd want to build. You could end up on the buyside if you choose brokerage first but it seems like you'd want to be a hybrid broker / analyst. If this is your gut feeling, then go with it. You could always switch back to acquisitions. Don't depend on the bonus for the brokerage shop. You will most likely end up with 55k at the end of Year 1. If you're all about the potential upside, then brokerage compensation definitely beats acquisitions compensation down the road. Personally, I chose the investment shop because I want to be working on deals from start to finish on the buyside but that's just me.
I made up my mind to go with the REPE shop over the brokerage firm. My pay will be cut in half after year 1 to 25K at the brokerage, at that point, I will be broker in training.
Also, I can get into brokerage in the future once I build relationships with various owners/brokers in the market. I spoke to a handful of folks in the industry and the theme is the brokers are looking out only for their interest with all the risk on me.
As mentioned earlier, I am 90% analyst for 50K and 10% broker for potential to make bonus at 50K+. Business development is a full contact sport and it will very challenging to do the business development when they are already fucking me on analyst salary and potential workload. Most junior brokers are networking, cold calling and kissing ass 90% to drum up meetings / accounts with 10% analyst work year 1.
Building a brand new model for the team and cranking out 2-3 BOVs/OM valuation and analytical writeup per week, 50 plus calls with minimum of 4 calls set up for their listings and also hunting down my own deals will be tough to even land a deal!! I expect to grind 60 to 70+ hours as a broker and put in 6 days a week or even 7 on occasion...
I put in 40-45 hours of work (writing business plan, creating 2 models, taking IQ & personality test, writing 6 pages of documents to show my writing style, etc) to land a role that's exactly opposite of what i told the brokers at the firm i want to do when we started the chat 5-6 months ago. I sold myself as a guy who understands real estate finance/analytics but wants to get out of that side to production. They appreciate my analytical skills but want to low ball me and give me analyst work. A VP at one of big 4 brokerage shops told me the salary is not acceptable for an analyst at his shop who is brand new to real estate.
Offer 2.
I find it completely ridiculous that any company would have you take a fucking personality test as part of your applicant profile.
You're not wrong, but I think that also should key the OP on how much phone calling he would actually have to do. Id be willing to bet the time spent modeling is about half of what they said it would be and the calls are more than double.
I agree with you but there are a lot of firms that do this. The bigger the bureaucracy at a firm the higher the likelihood of them doing this as a CYA.
Yeah I find the more prominent the bureaucracy at a firm the more prevalent weird things like personality tests are. I just never understood how you could possibly ask 50 multiple choice, basic, superficial questions and deduce a person's personality from it. Should at least bring up personal questions of the type of leadership at the company. Plus option 1 seemed to have him jumping through a lot of hoops, wouldn't be surprised if they just told you what you wanted to hear in terms of letting you do more modeling and once you're hired just drown you in calls.
terrible post
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