I have three first job opportunities. I can start my career in brokerage, work in property management, or work for a developer. Which options is the best? I do not want to go into property management. However I think brokerage is nice. But working for a developer is pretty good and offers a salary unlike brokerage. So I have three job opportunities. I am trying to focusing my career on multifamily. Which one should I pick?
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If you wanted to focus on multifamily, property management sounds like the logical first step to me.
Do not take this advice
You're right in that you should avoid property management.
The brokerage role sounds like you're going to be commission based from day 1, which is not ideal. You'll go 6-12 months without making any money. This role will **ALWAYS** be available to you down the line if you ever choose to switch to brokerage. Ideally when you join a brokerage shop, you join as an analyst or an associate on a successful team and grow from there. That way, you have some salary and deals already underway from your VP that you're supporting.
Go with development, it'll be good experience.
So here is my experience from what I have seen. Property management pays well. And no I dont mean someone thats a leasing office manager, I'm talking about having a company that locally/regionally manages X number of apartments. This is great field thats often ignored on this forum. Everyone here wants to work for a developer or in acquisitions, but the PM side really shows you how to run the business side of it. I know two guys that started their own PM companies. Theyre both regionals dealing with sub 100 units MF in secondary markets. By my conservative estimate they pull in over $1.5M each. One of them is actually branching out into the GP acquisitions space because he's built quite the experience on the management side. He's building out an acquisitions platform. My point is that there is opportunity everywhere, its just a matter what you make of it.
Curious how big is the market that your friends are in? How many years of experience did they have (and was it in PM) before they started their own companies? Thanks
Population is less than 2 million for the MSA. Theyve always done PM.
So true. This is one of the better ways of escaping the w2 life. Opening up a Mgmt company is a good avenue to $$$ and way more realistic than becoming a fund manager
Typed up a long response, and it got lost.
I will make the short comment that I am strongly, strongly, strongly suspicious of the claim that your pals in property management are making 1.5mm a year. I don't have to tell you that for the firm to make that requires a gross income of (likely, at a 5% fee) $30mm. Assuming that salary/overhead/etc for the companies make up like 65% of revenue, that means $90mm of gross income in order for them to clear 1.5mm a year in profit. And I think a 35% profit margin is extremely high, because someone with that much fat is going to find competition entering the field real quick. The average rent for a 1 bedroom in the US is 1,098; lets say that this guy's buildings are a little denser, or in a higher CoL area, and round up to 1,250/unit on average. That means he's managing 6,000+ units to make that 1,500,000. Not impossible, but at that point your running a major operation, with dozens if not hundreds of employees. That isn't something done on a lark, or built in a day or even a decade.
So no one said this, but if you want to do MF, do any of the roles focus on MF?
Yes. All of them, for brokerage I can do MF investment sales, MF property management, and development as an analyst for affordable housing MF.
Currently a broker and I'd say go with development. Brokerage is tough and is at the whims of the market for deals to close and even in good times nothing is guaranteed. What brokerage is it?
Well... what do you want to do long-term? Why do you want to go into a brokerage or why do you want to be a developer?
This really is the key question, those roles are so different and require very different personalities/skillsets. I wouldn't make this decision solely on income potential, you need to determine if you actually enjoy what you'll be doing/if you'd be good at it.
I like multifamily as an investment.
So, while I think the OP is asking an honest, legit question.... there is not really enough info to give much insight/answer... Since, details on title/role, firm (or at least firm type/category), and even pay level all matter. Finally, a multifamily career is also a bit too ambiguous to make it much clearer.
For example - (all personal views, from an "institutional real estate bias")..
1. I'd take an analyst/associate role with Eastdil over a dev. associate role at a third tier retail developer in Birmingham AL
2. I'd take a dev. associate role with Hines in Houston over a commission-only brokerage at a no-name shop in NYC
3. I'd take a legit role/job in the regional/HQ office of Bozzuto over either of the above two latter choices, and I'd take either of the above former choices over the gig with Bozzuto.
So, to the OP, if you give more details (being vague is okay) on the actual jobs/roles offered and at what firms in what markets, you will get way better feedback.
You could add more about long-term career, but this is a first job, so really, you will probably change that going forward (i.e. feel free to add, probably won't change feedback you get).
Worth noting, hats off to the OP! Three offers are amazing to get, good problems to have, congrats!!!
I am thinking development is the best option. It's an opportunity with an affordable housing developer. They are pretty big, they also do property management on some of the properties they develop. I feel like demand for affordable housing is just going to increase and knowing the development processwould make me valuable. The pay will be 70-80k for the development role.
That sounds like a great first role in real estate! congrats!
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