Graduating in 2 years, what path to take?

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Rank: Monkey | 36

I'm graduating in two years and currently work in residential real estate. I want to join commercial real estate once I graduate and eventually end up managing funds for a syndication or REIT. I have a lot of super newbie questions so please bear with me.

First, I just transferred to a school (UCI) as an Quant. Econ major. Does major matter to firms and should I switch? (I don't lose any time if I switch ASAP)

My mentor recommended that I jump right into Marcus and millichap (MnM) once I graduate. His reasoning is that I'll fit in well with IS and if I can survive there for 3 years, I'll be golden. He wants me to develop hard skills as I work by taking classes for a RPA or other professional designation. In the meantime, I am studying Real Estate Finance and Investments by Jeffrey Fisher (slowly, as I have a strong engineering/calculus background, not a financial one)

What do you guys think of this? What would you change? I did a lot of reading on this site already and heard basically everyone hating on MnM due to their brutish, cold-calling methods. They seem to produce the best salespeople though.

What type of internship should I get, or is working transactions in residential enough? What skill set is required for the internships? I'm a 4.0gpa that transferred from engineering to Econ as a senior if that matters at all.

Is going for an analyst position somewhere the best route? I don't quite understand what it is/what it does, but I see many many people on this site going for it.

What is REPE? How is it different from PERE? I actually searched this on this forum but it was filled with acronyms and jargon that I didn't really understand it. I looked around for a FAQ but I didn't see one on mobile.

Basically I learn quick, am willing to work hard and grind, and I'm hungry. You guys are smarter than me so I have to ask: What do you guys think?

Thanks!

Comments (26)

Sep 17, 2018

For starters, REPE and PERE are the same things. While there is a quantitative and analytical aspect to CRE brokerage and investment, it is far more important to have a strong understanding of the market you work in and the assumption drivers rather than just knowing how to plug assumptions into a model, not to mention the importance of relationships. I wouldn't say MnM "produces" the best salespeople, but given the sink or swim approach to training, they are left with top salespeople. Its probably not the best for learning. As far as exit options MnM is definitely at a disadvantage to more prestigious firms aka CBRE, C&W, ED, HFF, JLL etc. where you'll see larger more complex deals and have greater focus on training analysts.
Shoot for an internship in finance or at one of these shops rather than staying in residential for sure.

    • 1
Sep 17, 2018

^^^^ This. I'd avoid M&M like the plague. The brand isn't a good one to have on your resume and you'll be dealing w/ unsophisticated buyers/sellers and selling gas stations, B/C multifamily, NNN assets, strip retail etc. It'd be better to start out as an analyst at CBRE, Eastdil, HFF, etc.. where you'll learn to model and underwrite $20-100MM+ institutional quality deals with great Sponsors. You'll develop a much stronger analytical skill set and can easily jump into REPE, AM or move into a legitimate broker role down the line. I think exit ops from M&M would be minimal and there's a decent chance you'l crash and burn.

    • 2
Sep 17, 2018

Depends on the group you are placed in and/or apply to. M&M has an institutional property group to compete with the cbre, eastdill, hff's of the world.

    • 1
Sep 17, 2018

Do you actually make more money working with institutional purchases? Intuitively, I feel like they'd take longer and need a larger support team. (And as an analyst, you'd be salaried and capped right?)

Sep 17, 2018

Thank you! Do I need a background in finance to get these internships?

Should I change my major for it?

What's the best way to contact these people? If you tell me, I will execute and get it done.

Finally, would having a brokers license be conducive to this in any way? I'm thinking that if I could broker my own transactions while managing. (Conflict of interest between brokering and fiduciary duty?)

The original idea was to work as a broker until I got enough experience/connections to start a REPE. My mentor is a top 1% producer (lucky friends with the mayor) so it make sense that he pushes me very hard towards the brokerage side.

I also remember that he argued that since most brokers are "dumb" analytically, I'll be at a level above the rest once I master my numbers. I'm assuming that this means more sales.

I think this new path you're revealing to me is more analyst > manage an REIT/REPE > start your own.

It looks like both can work so I'm confused as to the pros/cons.

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Sep 17, 2018

What do I need to do to prepare for an internship there? (Make myself appealing, succeed, etc.)

Sep 17, 2018

I would go for an HFF or Eastdil job if you can't get a buy side gig right out of school. The labor market is tight right now, so you never know.

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Most Helpful
Sep 17, 2018
mattqchou:

I'm graduating in two years and currently work in residential real estate. I want to join commercial real estate once I graduate and eventually end up managing funds for a syndication or REIT. I have a lot of super newbie questions so please bear with me.

Not saying you don't know what you want to do, but at your age and "newbie" level, I wouldn't focus so intently on one path in real estate. There is way more out there than you currently know.

mattqchou:

First, I just transferred to a school (UCI) as an Quant. Econ major. Does major matter to firms and should I switch? (I don't lose any time if I switch ASAP)

Econ major is fine. Your major doesn't matter unless it's something absurd. Take some finance classes.

mattqchou:

My mentor recommended that I jump right into Marcus and millichap (MnM) once I graduate. His reasoning is that I'll fit in well with IS and if I can survive there for 3 years, I'll be golden. He wants me to develop hard skills as I work by taking classes for a RPA or other professional designation. In the meantime, I am studying Real Estate Finance and Investments by Jeffrey Fisher (slowly, as I have a strong engineering/calculus background, not a financial one)

Does your mentor work for M&M? That's oddly specific advice. Anyhow, working for a brokerage firm (and there are much better firms than that...) is typical advice because of ease of entry, and because having any commercial experience on your resume is better than no commercial experience, not because working at a brokerage shop is some inherently valuable rite of passage. I worked for Colliers for a year. It wasn't noteworthy and I've had internships that have proven to be infinitely more impactful from both a career and knowledge perspective.

mattqchou:

What do you guys think of this? What would you change? I did a lot of reading on this site already and heard basically everyone hating on MnM due to their brutish, cold-calling methods. They seem to produce the best salespeople though.

Much like I wouldn't recommend you laser focus your specific career path as a rising junior in college, I wouldn't recommend you trying to find a specific first job either. You need to be open minded and flexible in your approach or you'll miss a ton of opportunity out there. Also, even if M&M "produced the best salespeople," and they don't, that's not necessarily a required trait, depending on where you end up.

mattqchou:

What type of internship should I get, or is working transactions in residential enough? What skill set is required for the internships? I'm a 4.0gpa that transferred from engineering to Econ as a senior if that matters at all.

Working in residential is not enough. Fair or not, people in commercial real estate think all residential people are decent to good looking 35-45 year old housewives with too much makeup who repeat things they heard on HGTV. You need to find an internship in commercial real estate doing absolutely whatever.

mattqchou:

Is going for an analyst position somewhere the best route? I don't quite understand what it is/what it does, but I see many many people on this site going for it.

It's a good route. Analysts typically run numbers, whether they be financial data, market data, etc., and prepare reports. This is more relevant experience to working at a REIT than cold calling is.

mattqchou:

What is REPE? How is it different from PERE? I actually searched this on this forum but it was filled with acronyms and jargon that I didn't really understand it. I looked around for a FAQ but I didn't see one on mobile.

PERE is a news website. REPE is shorthand for "Real Estate Private Equity." Essentially, they're the same thing, since the letters stand for the same words. Don't read into it too much.

mattqchou:

Basically I learn quick, am willing to work hard and grind, and I'm hungry. You guys are smarter than me so I have to ask: What do you guys think?

Thanks!

Talk to as many people as you possibly can. Experience as many things as you possibly can. Read as many things as you possibly can. The more your knowledge and exposure base grows, the more informed your decisions about your future will be. You truly learn something new in this business every day - sometimes shit you don't even want to know but you have to for one reason or another - but you always want to make decisions with the best information available.

    • 8
Sep 17, 2018

Always great responses @cre

Sep 17, 2018
Chekdastack:

Always great responses @cre

Thanks, man. (or woman)

Sep 17, 2018
CRE:

Working in residential is not enough. Fair or not, people in commercial real estate think all residential people are decent to good looking 35-45 year old housewives with too much makeup who repeat things they heard on HGTV. You need to find an internship in commercial real estate doing absolutely whatever.

I agree and disagree with you there. You are spot on about the "stigma" of residential brokers. Most people think of Million Dollar Listing people screaming into their phone on speaker in a public area or think of a hyper social, attractive woman. And to be honest, the latter really do well in the residential brokerage realm.

But I've managed to spin my experience as a residential broker and it seems to work. Thankfully I have had several investor clients so I can play up me using my homemade excel model for them and analyzing things. And my production is several million, so at the very least it shows I work a lot. Disclaimer: non-target state school, 3.0 GPA, and I'm not looking at Megafunds like Starwood or any REPE/ REIT for that matter. I would say residential brokerage isn't as impressive as a top company internship, but it is better than a non-RE related job.

Sep 17, 2018
SoCalRE:

But I've managed to spin my experience as a residential broker and it seems to work. Thankfully I have had several investor clients so I can play up me using my homemade excel model for them and analyzing things. And my production is several million, so at the very least it shows I work a lot. Disclaimer: non-target state school, 3.0 GPA, and I'm not looking at Megafunds like Starwood or any REPE/ REIT for that matter. I would say residential brokerage isn't as impressive as a top company internship, but it is better than a non-RE related job.

I would argue the success you've found with this approach is attributable to your skill in overcoming the perception, along with your obvious success in the residential position, not that the perception itself doesn't exist.

Also, I didn't mean to imply that working in residential is some awful position, just that it is not enough.

    • 1
Sep 17, 2018

Amazing response! I'm really grateful for your insight. Not sure how to quote but I'll answer each section in order.

First, I agree with you. I know I'm inexperienced and I'll be the first to admit it. That's why I'm looking for guidance from everyone here. The path that I've explained is the best path that I know so far. Thus I'd be welcome to suggestions into other paths so that I can look into them more deeply!

Thank you, I will listen to you and take finance classes after this semester ends.

My mentor does not work for MnM. He has his own brokerage and syndication. I'm not sure why he told me MnM, which is why I'm turning you WSO for insight and clarity. I know he told me that it's good to take risks while I'm young, and he thinks that being a broker in general is high risk/high reward.

I understand what you mean. I originally started for medicine, then engineering, and now RE. A lot can change. Unfortunately, I'm the type that needs some sort of specific end goal before I'm able to execute on it. Also it looks like (to me) people take 2 years or so developing the skills/resume to end up hired as an analyst. Doesn't this mean that I'm starting at just about the right time?

I understand. How can I make myself appealing to HR departments taking on interns? I have very little finance background. How soon should I contact them by?

Thank you. It makes sense, since analysts develop hard skills. I believe that my mentor wants me to have my own brokerage firm, which is why he pushes for me to start working with soft skills as an agent and develop the hard skills along the way.

Thank you! REPE sounds like the go to place to end up. I've read a couple hundred threads back now and I see that it's much more common than REIT.

I appreciate your last statement, but I'm a little confused because it's so vague. Who do I talk to? Whats the goal? Is it to learn the overall state of the market to make investment decisions? Or is it to get a better background so that I can decide which path in RE I want. I learn everyday because there's so much around, but only a bit is useful if it's unfocused.

Once again, I appreciate you sharing your experience with me and taking the time out to answer my questions!

Sep 17, 2018

The best advice I have gotten is starting as a DP or IS analyst on a strong team, preferably in your target city. From there you will cover more deals and develop a larger network than any other out of school gig. I know of plenty of people who choose CBRE, HFF, Eastdil over PE right out of school. From here you can jump to development, REPE, REITS, Debt Funds, Banks, you name it. Right now you should network network network and learn how to kill the question "Why Real Estate?", if you nail that and are a good fit good firms won't mind teaching you the financial side.

Sep 17, 2018

I believe that I am going to do this.

I was warned about the opportunity cost though; becoming an analyst delays my entry into the market as a broker for at least a year or two. Since brokers generally make more money on the upswing, so I want to time my entry late in the downtrend.

Sep 19, 2018
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