Contrarian Thesis: Acquisitions is the Least Interesting Job In Real Estate
Feel like it's worth giving an alternate opinion, just because I see so much of the same notion repeated constantly that acquisitions are the best gig in real estate. What I do right now is 75% acquisitions, but I've worked on a lot of development, AM and portfolio management type work in a past life as a generalist. Here's why I can't wait to get back to the AM/PM side;
Acquisitions is the most repetitive job in RE.
Argus Inputs -> Excel Model -> IC Deck -> Due Diligence -> IC Deck, rinse, repeat. It gets old being the last cohort in the office every night while working through the same templates/checklists every day. My experience in development is that there are so many moving pieces to every deal that you don't get as worn down doing the same thing again and again. On the AM/PM side, the anticipation of working around a variety of cluster-fucks that could be occurring across portfolio assets on any given day also provides a more mixed balance of work. Working across redevelopments, capital projects, leasing, PM work, valuations, dispositions, etc. provided a good amount of variety too.
Sifting through a heap of deals week and dealing with unrealistic brokers can be a tremendous effort for an actual ~20% hit rate. Technical skills are crucial, but once you've developed them, doing dozens of preliminary underwritings on deals that will never actually get done gets old quick.
Acquisitions is largely a young analyst's game.
Can't see myself getting old in my current role and there are basically only two guys on the deal team over the age of 30. It's the opposite for our Asset/Portfolio Managers. Doesn't bother me as a young gunner, but I don't want to be 40 with kids and have to find a new job as an acquisitions guy while competing with kids that have way more energy and proficiency with the latest technology than me.
Underwriting is the least important aspect of being a successful RE entrepreneur.
Working with a variety of financing structures and knowing how to build a model are definite pluses, but at the end of the day, my landlord isn't 30 years old and living off of his "passive" real estate income because he's a killer at institutional quality underwriting and piecing together IC decks. His real talent is property management. He knows how to renovate and what it costs, knows what to look for in a home/apartment that's going to come with backed-up capital needs, knows his local market and where to find small-cap value-add play, etc.
It's easier to replace your capital slingers/model builders on the front end
It's easier to replace your capital slingers/model builders on the front end than it is to replace your veteran Asset/Portfolio Manager whose intimate and aware of the tenants, capital needs and state of affairs at every property in the portfolio. Again relating back to job security and growing more valuable with tenure, versus less valuable. The AM/PM team ultimately has the last sign-off on the deals we bring before IC because they're the ones that are supposed to be able to gauge assumptions, be experts in their markets and take ownership of an assets performance post-acquisition.