Not to be a debby downer: Reading through all these posts it looks like RE for ~90% is a financially middling career.
I have read more or less the entire stack of threads here at WSO Real Estate.
After digesting it all, it seems like unless you are one of the few anointed elite who lands top end real estate private equity positions (or one of the outliers who has family money to put to work in a deal), you could easily spend your 20-30 year career making middling money ($65k to $120k) without much upside (save for a better quality of life, time and stress-wise, than our high finance brethren).
It certainly makes the case for opting out of RE and working in a professionally-decreed/licensed field (if possible) where the barrier to entry is much higher and standardization of pay much greater.
Maybe it is 'the sexiness of real estate' and the grandiosity of dreams that comes with it which lures candidates into a field where they will be, more likely than not, stuck in the middle financially and in overall job distinction.
It's not really for the type of guy with an mba that wants to work for the man and get a big bonus
Real estate is for the entrepreneurial type
Another argument could be that it's a lifestyle job for somewhat lazy, educated preps from the upper-middle class. You're judged based on how much business you bring in, not on what time you get in in the morning. Half your job is socializing with your industry buddies. And even though the median might not be all exciting, as you point out, there are guys who make great money at a pretty young age. Just the other day, while hanging out on the patio of a local bar, my friend pointed out one of the 32-year old retail brokers from his firm walking out to his brand-new range rover with a smoking hot chick in his arm. No family money, no connections, just a great producer. Definitely not making $750-800k+ or anything like that, but doing pretty well.
Making a buck 40 or so and working the hours so of my friends dads work in an extremely low COL city is not that fucking bad.
This. Plus some people think it's interesting.
I know a family where 2 brothers saved up a few $k each and got some $ from their dad (not much, they were barely middle class) and bought a decent amount of property in an ok area on the southwest side of Chicago. After a year or so of working and saving and then getting a loan they were basically the GC and helped build a bunch of apartments on their property.
In the beginning they were the landlord, repairman, etc... 30 years later the entire family is essentially retired. They have a secretary/bookkeeper, a full time repairman and a few guys who help part time when needed at the apartments. I've known this family for years and I bet the guy has gone into their office on average 5-10 hours a month the last 10 years.
Now....he is not filthy rich. However, he has a $400k home, drives a lexus suv, used to have partial ownership in a Cessna, his wife has never worked and he spends most of his time doing whatever the heck he wants. Not too bad in my book.
What do you think of going the retail broker route to over time raising the cash to buy your own properties.
Having a Rolodex full of credit tenants and an eye for who could fill say an abandoned ground floor of a mixed use property would not hurt. Seems unless one is independently wealthy or has other skills&abilities to trade with a capital partner, one needs to find ways to generate cash beyond this 70 to 150k level to ever have a chance at buying their own property.
Can you unring the broker bell on your resume if the gonzo plan to doesn't work seems to be a question as well.
"Real Estate" is a very broad topic. OP's post could easily be changed to "Finance" instead of real estate and would cover 95% of finance jobs.
Because its so broad "Real Estate" runs the gambit of jobs from pencil pushing back office to sell side client facing to buy side analysts and on.
Jobs in general are "middling" its not like every one with a finance degree or who works on wall street makes what the few analysts at top IB's or HF's make. Its the same for real estate.
Remember that "Business Investments" are approximatly 15% of GDP. Which we can label has financial activity. Of that the entire commercial real estate sector (everything from construction, management, investing, financing) only accounts for 3% or so of GDP and thats a huge catagory. If you take out construction you're only left with approximatly .5% to split among what WSO considers "real estate jobs" which is a far cry from the size of any other sub forum here.
But in general I think they are relativly on par when comparing apples to apples (an "analyst" at HFF or CBRE is not the same as an analyst at an IB/PE), boutique vs boutique, large vs large. Remember there are very few real estate firms the size of BB banks.
Anyways thats my $.02
I think this pretty well sums it up. "Real estate" is very broad. Just like in any business, the top 5% make pretty exceptional money, and then there's everyone else.
The way I see it: $10B AUM or bust.
Just kidding. I don't think real estate is right for everyone, but there is a lot desirable of it if you want to play an influential role in your community. I'd rather be king of a pond than a peon of the ocean. There is just something appealing about saying you own half of downtown (vainly speaking). Everyone has their passion, and for me I want to do something that makes a real impact on society. What better way than providing the infrastructure for housing/office/CRE and helping your community grow, you get nicely rewarded for it. Not to mention the positive feeling you get for doing good in your area, thats something money can't buy.
OP didn't factor in the size of the RE Finance community, which is significantly smaller than other forums. The ratio of those doing well vs. middling is similar to other areas of finance.
Sure if you live in Lincoln, Nebraska. Most people I know are above this range by year 3 (in a city with high cost of living). If you like real estate, don't be discouraged as there's a ton of money to be made.And, of course, another key is the size of the deal. Just as one should encounter measly compensation at a boutique investment bank doing $4m private placements for software companies, you should not expect to make a lot doing a $4m single-tenant retail deal. So, if you want better pay, find somewhere where you can work on $500m+ deals.
Mark Walsh was a real estate MD at Lehman. He made $70 million in a very short amount of time. AIG's head of real estate sued AIG for nearly $300 million in back pay. Those guys might disagree with the OP. Perhaps there is money to be made.
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