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I'm interested in the responses. I work for a larger owner than OP and get paid pretty well but I'm worried my earning potential will flatten in the future due to not having an MBA.
This may not be the norm, but a buddy of mine didn't get an MBA after IBD and now is pretty high-up in a Top 10 fund, that maybe though because he worked in banking first. Not sure if it's different if you come from an operator/developer first.
OP i work at a small PE shop similar to you in the sense I'm being paid below market as first year buy side analyst. I think for me it makes sense to stick it out because the company is really going to start growing quickly very soon. 2nd fund will be 4x the size of first fund.
Wondering if situation is similar for you. Does it pay to be loyal if you know your firm is going to grow?
What is considered below-market for a small REPE shop? (range / don't gotta be specific)
I think you need to ask yourself if you truly love real estate and want a career in the industry? You mention traditional PE and IB and it seems like you are very focused on compensation. Obviously, money is important to everyone but it should one of many deciding factors, not the only factor.
My advice to you is to figure out what career or industry is going to make you the happiest and go from there. If you decide on a career in real estate, I would put the MBA on hold and network your ass off. I can't stress that enough. You need to be out at industry events, emailing senior employees and HR folks, ask for coffee chats, etc. Best of luck and I hope this helps.
Where do you live? I ask because living in Indiana may require you to get an MBA. Not enough opportunities in that area. On the other hand, if you live in NYC or DC you can focus on networking and building your resume.
An MBA would be great, but it isn't a requirement. Everyone pursuing an MBA believes that they're smart enough to get wherever job they desire. Things don't always work out because some of your classmates have more connections and/or a better resume. Attaining your dream job is not as easy as you believe.
@jimbo 50-70 outside of top markets where cost of living is exorbitant.
@jimbo 50-70 outside of top markets where cost of living is exorbitant.
re:#3, studying for the GMAT is NOT "infinitely" harder than anything. that should be the least of your concerns when considering b-school. the "con" to b-school is mortgage-sized debt and mortgage-sized monthly payments.
"I will be gunning for Blackstone" Quite optimistic
A guy I worked with once told me over lunch, "big brands help you early in your career." It certainly helped him (Harvard undergrad, M7 MBA, IB, REPE, Very Top F500 real estate, think Disney, Blackstone, etc). I tried to think about what this meant from a guy I admire and who seemed to do everything right, yet him and I were trying to turnaround a real estate company during the recession, and would have reached BSD status had we pulled it of.
I think in life, there is the "early in your career" phase and that period where you hit your stride. As you put it, become a BSD and then a very BSD, and then a very, very BSD, and so forth.
I think all the resume candy coating helps you get on the BSD path, but after that there are so many variables, timing risk, market risk, partner risk, "wanting to be king, instead of rich" irrationality, politics, etc that come into play when you truly vying for very BSD status.
So I think he was trying to tell me big brands help open doors, especially early in one's career, but have diminishing returns over time as career paths become more undefined. This is true in real estate, VC, PE, many other fields at the principal level.
In your case, I value optionality (short term) and focus (medium term). Both tend to be mutually exclusive, but if you stagger them, you increase your opportunities:
If you've been at your firm a couple years and you feel like you're being used (I've worked for a developer/empire builder), now is the time to jump ship. Liquidity in the marketplace is high, and analysts are needed to allocate. Won't last forever. REPE or REIB or stay at your firm but have a plan to go to b-school. In a downturn, smaller developers tend to feel the cash crunch the hardest. If compensation is not good now, I would hate to think what would happen in a contraction.
Take the GMAT. Why not. I waited and waited on the MBA, but ended up doing it. Literally, one day, I looked around my development firm to everyone I supported, from the SVP of development to the development managers and I saw people with MBAs. I was studying construction on my own, by reading books, but thought I'd never be able to put this on my resume. It sucks applying, but you can take the GMAT multiple times and have the score stay with you for some number of years. Maybe you don't have the sweet spot 5-7 years work experience yet, but please give it a shot. Make the trend your friend (more MBAs in real estate). If you have a great relationship with the principals (and you should because you must be doing tons of work for cheap), they owe you a fantastic letter of recommendation. I had the developer guy write my LOR like "Faulkner" (we joke). Long term, if you are thoughtful about the school choice, the cost of the MBA is immaterial.
Focus (medium term goal): try to get some brands (MBA, firm).
Longer term: be the principal of a
Similar but not quite. Im the only junior level acquisitions guy in my firm and my experience day to day speaks to that. Im involved throughout the deal and value add process. For example, we closed on a multifamily value add deal and not only had I underwritten the deal, I was the one liasing with attorneys and brokers throughout the entire process. After the deal had closed, I would tie in our conversations into a strong value-add business plan and prepare investment materials to reach out for debt and equity raises. I cant help but think that I can be making a lot more money doing the same thing for a bigger firm.
Shoot for the moon. Even if you miss, you'll land among the stars.
@"odog808"
thanks odog808. great post. As a developer yourself or working for one, you definitely understand the experience of treating every deal as having skin in the game and the urgency that comes with it. Hence my saltiness for being mistreated this year. For me, I am young (24-26) and I want to build my resume and my deal sheet. You mentioned that my medium term goal should be to try and get some brands. Would you suggest going to REIB from my operator role to gain these brands? Or even join another REPE firm as an experienced Analyst rather than an Associate to get these brands on my resume?
and Yes! I definitely will try and take the GMAT now.
Do you work in a city with brand name real estate company offices?
If Yes, then REIB or REPE are almost equally good choices. If I had to choose I would go buy side REPE, but it depends on the firm. Eastdil vs $1B AUM REPE maybe slide with Eastdil. Why, because as an analyst trying to build your deal sheet, you want deal flow, product type diversity and geographic diversity. I had my name on 30 equity funded acquisitions by the time I was 27. Whether or not I was exercised and used and abused is another story, but it gave me a great perspective and flexibility later when I became more specialized in particular product types. I can raise my hand when mixed use or out of the box company initiatives arise.
Becoming increasing rarer to get a direct hire associate role at a top REPE without a MBA. Experienced analyst is achievable with your profile. Some REPE like 1-2 years of seasoning before hiring an investment analyst.
If No (you live in Austin, Seattle, PHX, Hawaii where I'm from, or somewhere I'm just guessing that has strong development pipeline but is not a financial center), then I might modify my strategy. I might move if REPE, Blackstone, etc is your goal. If you live in a secondary market and want to stay there then my strategy would be development all the way. There is not enough of a transactions market to do REPE or REIB. In this case, as I mentioned in the topic about starting your own firm, I would play small ball. Get to know everyone, then work for one of the most successful guys, go get a MBA, work a few years in a financial center and then come back as a principal with capital connections. The limiting agent in secondary, tertiary markets is access to capital and you can make things happen if you combine your deep market knowledge, vision and access to Global Capital Markets.
If you have the first world problem of multiple offers, I can opine.
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