Comparing two types of real estate dealmakers
This thread was inspired by a recent discussion I had with a member on this forum. He works at a life insurance company and buys stabilized office buildings in major metros at 4-caps using 0-40% leverage.
My question is basically this - what do you think is more impressive? Doing what the above guy does? Or working in investment banking and moving onto Starwood and working on the Yotel deal (big corporate deal - google it)? Or doing IB -> Blackstone and working on the Hilton deal, Logicor deal etc
Who do you think gets paid more?
My advice for you young guys in this forum, if you enjoy buying single assets and clipping coupons, investment sales is the way to go. You’ll be able to put together an investment committee memo for an asset level deal in a heartbeat after a couple years there.
If you want to work on big corporate deals and make 2-3x your buddy at MetLife real estate, go the IB route
Yet the 20 something google / Facebook SWE would making more money
Time changed and only the tech rejects are going to finance today
Who gives a shit?
Real Estate Alert about a month ago had the league tables for real estate M&A for 2018. A total of 14 deals spread out among 25 firms actually closed. Over the past 10-years the average number of closed deals is 10.
A lot of people on this site fawn over REIB, but to be honest it is generally a brand-name heavy/experience-lite gig, especially at the junior level. Someone at a lifeco or a small REPE shop actually closing multiple deals a year is getting much better experience and will the better deal maker, the person at REIB will be superior in PowerPoint.
Closing a loan =\= closing a merger. Obviously a loan underwriter will do more “deals” per year but calling a loan a “deal” and an M&A deal “just another deal” is totally inaccurate.
Let’s just say REIB isn’t the best experience. It doesn’t matter. The topic was about the REPE corporate deals versus 5 cap industrial in Houston. I don’t even think Yotel used a broker. But you won’t work on the Yotel deal without going thru banking
The junior level is about opening doors and creating opportunities for yourself. Doesn’t matter if you get “the best experience” if employers don’t want to hire you
Closing an asset acquisition is similar to closing on a merger, I'd imagine, and if you're entitling and constructing a new development project that is almost certainly more challenging and involved than REIB. Especially at the junior level, where development folks have real responsibilities and IB folks are just running league tables and putting pitch decks together
Hahahahahaha "Elite Student" works in Real Estate "Investment Banking" and tries to shit on other shitty mortgage brokers to make himself feel better in comparison. Dude, REIB is wack. Raising capital for REITs at some large-cap, primarily consumer bank's IB division isn't the experience that most people have in mind when they talk about the IB cache.
Why are you the way that you are?
There are these friends of mine, from school, they studied computer science, now they are making $150K out of school and have normal hours .... I repeat normal hours ....... seems kinda embarrassing for EliteStudent11 to be flexing all the time when we finance people are second, third, or fourth place when it comes to lifestyle/compensation combined.... we are kinda that group who used to be the shit, and now we are not the shit, and some of us do not realize, the ones that are here "for the money" are the most laughable
But the prestige bro. Chicks immediately flock to any dude who has an EB on his Business Card. Every girl that is a 10 is completely informed about the hierarchy of banking and tracks prestige closely on WSO. Obviously they’ll flock to REIB guys... right?
Only if their business card has a classical font, tasteful thickness and is just the right shade of eggshell. But otherwise absolutely.
I think working 40-50 hours a week on complex developments that will transform neighborhoods is a lot more impressive than jerking off in excel and PP every day while constantly stroking your MDs ego to appease their every whim. It's even more impressive when it comes with a 30x payday and an actual, REAL accomplishment you can walk past knowing others are enjoying and appreciating what you created. Also, Yotel blows.
Investing in RE companies is not a real accomplishment... thanks for the insight!
Nice rebuttal bro. Clearly missed the nuance there - not surprising given that all you care about is preftige and $$. Get yourself a MicroTAC and go back to the 90s where you belong.
What’s that? Facts.
Hey man - I see your posts from time to time. I understand that you are very interested in pursuing a REIB role focusing on entity-level advisory. I think it could be cool for the right person in the right group or bank. That's a great career choice if you are genuinely interested about the work and want to be doing it for the foreseeable future. The same goes for any line of work really.
Why are you always trying to flex your self-perceived superiority over the rest of the members of this forum? Do YOU even have a REIB job...? I thought I remembered you complaining about your balance sheet lending role or something.
If you want a REIB job then go fucking get one. No one really cares. Not hating on you, just saying you may consider being a little more polite. Especially considering the fact that this is a relationship business.
Umm... This dude is a troll. Evidently a pretty darn good one based on the communities responses to him.
Stop replying to this thread and let it sale off into the sunset.
What irritates me about the trolls on WSO is that they’re spreading misleading/wrong information on a website meant to help people. There are tons of college kids & professionals that actually use this website as a resource, and this jackass is dilluting the quality information for the lulz. In EliteStudent’s case, if it were just one or two posts that’d be one thing, but it’s almost every fucking thread for this guy.
I’ve contacted AndyLouis and WallStreetOasis.com twice regarding this, and frankly I’m disappointed that they haven’t done something about it.
sorry about that, that account is now banned
It’s funny how I get shit on for saying RE I-banking is the best place to start your career in real estate, but when people say I-sales is the best place to start your career in real estate, no one bats an eye. The truth is I-banking is the best for one particular path (working at a fund that does corporate deals, distressed debt, etc) while I-sales is the best for another particular path (asset level acquisitions fund, although many of these funds also prefer banking analysts).
But most people in the RE forum didn’t get into banking and they work in I-sales / lending so telling them that I-sales is the greatest basically panders to them. It’s not that it’s 100% correct, it’s just that it makes everyone happy to hear it.
Obviously my post is phrased in a way to piss people off, but it’s ultimately accurate info that just happens to not pander to you.
What I thought this tread was going to be about was dealmakers with higher sales vs higher analytical skills. Of course you need some of both.
Also gets back to dealmakers with acquisitions or asset management backgrounds.
And then deal makers for more stabilized, value add, development (land acq) or portfolio deals.
I think back and also in the mirror, and there are different types. There are MDs/partners who are great at building a pipeline. There are MDs who are great leaders and or visionaries. I think it matters in what stage the company is in.
I thought the same lol. Someone should actually start that thread instead. I'd be interested in hearing the different styles of the rainmakers at everyone's respective firms. My principal, for example, is very low on the analytical spectrum and high on the "nose for a deal" spectrum, and I personally think that goes 10x further.
My old MD was very transactional based and sometimes I wished there was more leadership coming from him.
At least I get home in time to have sex with my wife, nerd.
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