Real Estate Modeling Course

  • Real-life RE Modeling Tests from actual Interviews
  • Various asset classes including multi-family, commercial and more
  • Huge discount - until more tests and cases added

Comments (5)

Best Response
Mar 1, 2015 - 12:17am

Investment/development analysts will spend much of their days working on potential deals for acquisition and/or development. Routine tasks would include scanning the market for deals, building and manipulating spreadsheets, working with lenders and equity sources to gauge interest, testing various financing structures, conducting market research, constructing financial statements, collecting internal/external project cost estimates, talking with brokers about potential deals, and any other tasks related to the acquisition and/or investment decision-making process.

Asset Management analysts would spend their days working on day-to-day tasks for properties that are already in their company's portfolio. AM tasks might include working on refinances, rehab projects, annual budgets, writing and managing leases, legal and accounting, over-seeing and directing property management, property dispositions, and any other ad-hoc tasks (such as working on site plans, managing investor relationships, distributing and collecting funds, appealing tax assessments, applying for zoning variances, etc.). In many cases, once an investment decision has been made by an acquisitions group, the property or project immediately goes into the hands of asset management, which may work with the lenders on finalizing details, it may organize contractors, it may work closely with property management on devising a marketing and lease-up strategy, it may work with legal on formulating the organizational documents, and many other tasks.

If working with a principal (that is, a non-institutional investor) the lines between Asset Management and acquisitions may be blurred.

Generally speaking, asset managers have a deeper knowledge of real estate because their work is an inch wide and a mile deep. Acquisitions people tend to have shallower knowledge of real estate because their work is often a mile wide and an inch deep, although I've found that their many, many reps can expose them to a broader range of deals which gives them a unique perspective. But ultimately, acquisitions pays a lot better than AM, so if you want to make real money in this business then I'd try to get an acquisitions role. However, asset management has much better job security.

Mar 1, 2015 - 11:26am

Couple of points to add

1. I wouldn't say the inch vs mile deep thing applies here - but I do agree AM people know real estate better for the reasons you mentioned. Acquisitions is more investment minded, although both do a bit of both.

2. I'm in AM in my group. People typically go from AM to acquisitions so generally that's the preference. RETS associates actually did an interesting poll about the ideal RE job by gender. Men overwhelmingly said acquisitions and women chose AM. Generally as a rule, its easier to go from acquisitions to AM but anything can happen. This isn't IB where pedigree means everything.

3. At my shop, AM does a ton of valuations and handles any sort of underwriting once something is owned. This includes some major developments or anything else that wasn't contemplated in IC. Fantastic place to learn modeling if the AM group handles this stuff but you need to ask.

4. Tied into #3 above, there was an article in RE Alert (weekly industry news - mostly deal summaries - that everyone should be reading) that was about how the AM role has changed and expanded in some places to do more than just reporting BS and the boring stuff. Typically you can tell where this happens because the pay is better (for example, acquisitions and AM get paid the same in my group)

5. AM as a function clearly has better job security, but if you're a rock star in acquisitions they're prob not gonna cut you in place of a mediocre employee in AM - you'll prob just move to AM for a while.

Mar 2, 2015 - 9:03am

Thanks for the added insight. On the topic of AM roles expanding, is it possible that Asset Managers can
also be part of acquisitions? I had an interview for a RE PE (small boutique) and he mentioned acquiring
hotels as well as asset managing them. Does this happen often or just for small firms? Thanks

Mar 2, 2015 - 8:59am

Thank you for the extremely valuable insight. I initially was confused when I started my search because I found some 'development analyst' and 'Asset Management' positions with a mix of both descriptions you mentioned above. Regardless, I will apply to both and see what opportunities arise. Thanks again!

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