Should I Take Construction Project Manager Position
Currently doing Multi-Family Investment Sales in major city LA/NY. I am in a cold calling sweat shop at a no name firm. Doing a few deals not making much money but can see some some deals and $$ in the future but no desire to be broker long term. Goal is to run small multifamily deals on my own and grow from there - thought is being a broker pounding the pavement would allow me to see these opportunities and jump quick.
Just offered a position as Construction Manager with the most active multi-family value add investor in the market after building a relationship with them and their team over the past few years. I am wondering what the exit opportunities would be from this role and how this experience can help me in the future. No Construction Management degree or real knowledge of construction. Currently in mid 20s.
Thanks
@Malta Monkey"
So here's a few questions I have for you, OP
Is the role on the CM or the GC side?
CM (Construction Management) firms are hired by the developer (aka owner) to oversee the construction process at a high level. The CMs will be in charge of the GC, Architect, and consultants.
GC (General Contractor) firms are hired by the developer to actually build the building. They work in conjunction with the architect, CM, developer, and consultants but oversee the specific subcontractors (ie. the plumber, drywaller, electrician, etc).
Both are very useful for learning about the development. I work on the GC side but know several people at one of the top CMs in the US.
Some idiosyncrasies I learned the hard way:
There's a ton of jargon that takes time to get used to. A lot of the people in the industry use this jargon a lot so get used to asking a lot of clarifying questions.
Hours are early (may only apply to the GC side). In SoCal most work starts at 7A. Which means at your job site at 7A, which brings me to the next point.
You can be sent anywhere. You can negotiate not to be sent out of state (or quit, which I know a few people who quit their job to avoid being sent elsewhere). I live in SoCal, I woke up at 4:45A today to get to work on time.
Jobsites can be rough if you have allergies/ asthma. Kinda seems like common sense when you think about it, but something I did not think about. I'm also a germophobe, which you can guess makes smaller things more difficult.
In spite of this, it really prepares you well for development. I know someone who jumped from brokerage -> construction -> Top Tier MSRED and is confident about his ability to work at a top developer after. A few others on this forum have done GC -> CM -> MBA/ MSRED -> Development. I always say, "My job is like eating a salad with no dressing. It's not pleasant but it's really good for me."
Edit: If you're in LA then feel free to PM me. I'm happy to give you contacts for people in the industry and help answer construction related questions. If you're in NY feel free to PM me but my contacts there are limited.
So the owner has started its own construction company and I will be directly working under the senior employee who "started" the construction company. I am not sure how much that helps answer your question.
Thank you for explaining how things work and what your role is. As far as career advancement getting MRED sounds from you to be essential in moving up.
I am unsure how to feel about your '"My job is like eating a salad with no dressing. It's not pleasant but it's really good for me."' phrase. Lol. My question would be, why is it good for you?
like.Alsoci
It's good for me because I learn a ton of applicable stuff all the time. Much like a salad without dressing is pretty healthy for you.
That's a good opportunity. Exit opps to a principal side development team are generally strong. The one caution I would provide is whether you are limiting yourself to value-add deals only. CM on value-add (unit rehabs, modest capex) is going to be significantly different than the issues you will deal with in ground-up development.
Very good point here. A lot of the value isn't always about building it, but getting approvals to move forward. In value add you don't deal with the politics nearly as much as ground up. Understanding costs are also important.
On the flipside, rehabbing places gets you more reps in the same amount of time. You can often work on one project per every 1-3 years ground up. Sometimes you catch the end of a project and start of another- but that is usually blind luck.
Thanks for the response guys.
Yeah, the issue of rehabs not applying to ground up is something I saw while researching.
My question to you guys is will the skillset acquired in this position be valuable for me? This is something I do not know much about. Would doing this for 2 years make me more of a an attractive candidate for Development positions.
You most logical step after being a CM if you still want to be on the buy side would be as a development professional. These professionals need to know how to physically manage a development site, construction schedules, knowledge of market costs, the permitting and entitlement process, but also know the numbers/analysis side (to a lesser degree). They are not sourcing deals but may help underwrite but are mainly caretakers of the development process.
Most of these guys are lawyers turned RE guys of those been in that role as a junior person for a long time. I would expect some CM guys but would be surprised if they made that jump without some type of advanced degree (MSRE at the least).
Notwithstanding the foregoing the jump from brokerage to CM is going to be shocking. I am surprised you got an offer as a CM with only brokerage experience. Construction management is a role of minutia, tiny $10 differences between a PO and construction req will cause half a dozen emails asking how this mistake happened. Once you have finished one pay application you're on to throwing together the next for for the next month and multiply that by 2-3 as you could be handling multiple projects. You're life will be double and triple checking every PO to the pay app, finalizing, fixing the errors that are bound to be found when 3-4 other people review, fixing that, chasing down lien waivers that will have the wrong info on them, answering dumb questions from lenders about your pay app/loan req and then doing it all over again.
I dont mean this to come off as a hit against the position but I really do want to highlight how different your role will be compared to what you do today. Lastly to respond to this line of yours "Goal is to run small multifamily deals on my own and grow from there - thought is being a broker pounding the pavement would allow me to see these opportunities and jump quick."
You already know this (but maybe need someone to say it as well) but the proposed position will not help you here. Not form a skills stand point but from a realistic expectation of cash. Unless your family is wealthy you're not going ot be making enough money to invest in RE as a CM. Brokerage has a much higher ceiling and much lower floor. As a CM you're going to be making a salary which will be a great change from where you're at but its not like you'll be making hundred of thousand of dollars. You'll hopefully get decent raises as you prove yourself but they will start to level out to the standard 3% raises and I doubt your bonus will be any higher than ~10%
Anyways sorry I've written a diatribe but so many things keep popping into my head because the differences between brokerage and CM are night and day and theres no way to highlight them in one (albeit incomprehensible) post.
Edit: for context I work for an owner/developer in NYC in a acquisitions/capital markets/catch-all position so I've done plenty of construction loan reqs. and worked closely with in-house and third party CM's but I am not a CM or on the construction side.
This is very accurate. Precision is critical and it really is a lot of tiny details adding up. My company had us all take a personality test and 90% of the room had the top personality strength of precision/ attention to detail. Just know this is the personality type.
In CA at least, here's the general pay structure (all in):
Project Engineer: 60-90
Sr. PE/ Assistant PM: 80-110
PM: 100-160
Project Executive: 200-250
This is pretty general. Sometimes you'll see PMs with 20 years of experience. Sometimes you'll see PEs (who are damn good) with 5-10 years of experience. It's really company specific on pay and title. Some PEs actually are PMs without the title. I really mean this, there's no PM and the PE is running the job. It can be odd. But 80%+ of the time, my outline above holds true.
Wow, a lot to digest. I really appreciate it.
Yeah, I got lucky with this offer. Got it from being close with a guy who heads acquisitions and constantly being in contact with the principals about deals.
Obviously all the details of the role and my fit is a personal decision I have to weight out. But, as far as you saying this will not help me do my own deals. Are you saying this because of simple fact that I will not have nearly enough money to invest on my own, or because the skills learned in this wont be applicable to going off on my own. I want to be entrepreneurial in real estate, and don't mind working with these guys who I respect a lot for a bit to learn nuts and bolts about business on side I know nothing about. But it is important me for me to leave this position significantly more knowledgable/valuable since I might be sacrificing income. I'll also add, the team is relatively small so might be opportunity to wear other hats if I have the time. They did mention I would be doing a little bit of acquisitions work.
Again, thank you for the detailed response. Really gave me a good idea of what to expect.
Depends on what you want to do. If you want to buy multifamily, fix it up, and then raise rents/ sell then this sets you up very well for it. If you want to do ground up development, I can help guide you to get other roles within the construction industry. Both models are very effective.
A lot of good input in this thread, but i'd heavily consider your mentorship and validity of the CM position that you're going into. @Malta Monkey" is pretty close in terms of compensation, but "CM" has a huge difference in expertise, roles, and responsibilities in scope. I'd be careful taking a position like this.
CM can mean anywhere from a glorified maintenance manager that makes sure the guy who is painter shows up and has to slap on drywall when the home depot pickup doesn't show up, to an owner's project manager/owner's representative that drives a $100-million+ ground up development. There's a massive range of expertise and and job responsibilities to all of this. I'd really dig into the scope of your job, expected project portfolio, etc. Multifamily-value add construction manager could just mean maintenance manager that hires $15-an hour laborers at home depot, but it could also mean quarterbacking GCs, vendors, and designers; the latter of which is what you really want for development experience. I'm currently a CM in multifamily residential doing CapX/Renovations so feel free to DM me if you have any questions.
Good points. There's a huge range of complexity in existing building work. The OP might be sprucing up tired apartment building lobbys, redoing kitchens, etc....which would be a learning experience but only somewhat. On the other hand, he could be converting a 1925 school building to residential, which is actually harder than new construction in many ways.
Brokerage to Construction PM.. that would be one of the most interesting direct transitions I have ever seen.
Seen it done 3 times before. Makes for a unique background.
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