I have an interview coming up in a few days for a junior analyst type position working under a debt broker (hotels, senior homes, multifamily, land).
Do debt brokers create any CIMs/OMs? Any powerpoint slides? How deep do they financially model? I've heard that the modelling they do is very basic.
I just want to know going into the interview what specifically I can help him with so he can spend more time with clients.
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Debt Brokers create OM's and send it to lenders. Message me if you want to see a sample. Modeling in brokerage can be pretty basic or complicated depending on the product type. The more stabilized the asset, the simpler it will be. Your main value add will be assisting with creating OM's, researching the market, property, sponsor, summarizing it in the OM You will also most likely use the firm's existing model templates, it will be plug and chug and then copy and paste it in the OM.
Thank you for the reply, I'll send you a pm
Tacking on to this.
I met a debt analyst at one of the big three brokerages. The analyst covered multifamily and the modeling was very plug and chug. The model was created in house, and the analyst just input expenses, rent income etc from the rent roll that was sent over. The underwriting seemed mostly written to Freddie mac / Fannie mae standards. 70% ltv, 1.25 dscr etc.
On the Investment sales side one of the analysts told me that the test administered is mostly time value of money. Take this with a grain of salt as I have also heard there is no tests with some firms and the interview is mostly fit.
Thank you very much!
Are exit ops from debt considered less good because the underwriting and modelling are less complex then say doing investment sales at a big 3 shop?
I can't really speak to the exit ops as I am not in that type of role. I currently work in research and am trying to make the jump to a more finance oriented role such as Debt/equity analyst, investment sales analyst etc. I say that so you will take what I say as a grain of salt as this is all things I have learned through networking, and not first hand experience of being one of the above analyst and then switching to the principal side.
From what I hear the Debt/equity analysts are just as respected as investment sales analysts. The analyst I met told me "IS guys sell the dream, we make it a reality". The model she showed me was not very complex and was plug and chug but there could be other variables that aren't accounted for, Such as her showing us the most basic model (I was an intern when she showed me this), her being humble and not wanting to come across as a braggart.
One person that would be good to talk to or read through their posts would be brosephstalin If I am not mistaken he comes from a debt equity background and speaks highly of it.
TLDR: I look at Debt/Equity and Investment sales analyst as having pretty equal attractive exit ops. Everyone I have talked to has described both paths as a great way to get a very hands on, nuts and bolts knowledge of real estate.
Yes, I came from D/E brokerage and you'll hear me beating that drum forever. I wouldn't have gotten the opportunities and interviews that I did without that experience and I always recommend it along with IS as a perfect place to start a RE career, especially if you are not certain which direction you want to go. It gives you the exposure to all types of stakeholders in the market while you cut your teeth learning the technicals and honing your deal chops. The key point I always stress, and the only one that matters if you choose to go this route, is that the team you work for is the most critical element. If you get a few years on a strong team your exit opps will be almost limitless. If you join a garbage team that works on low-quality deals, your exit opps will suck. Garbage in garbage out. Be sure that the team you join is: 1) active with a strong reputation 2) works on asset classes you are interested in 3) works on deal types you are interested in. As another poster above cites, if you join a DUS broker for instance, you will have limited exposure and therefore limited exit opps mostly into multifamily. The shop I worked for financed deals nationally, on all product types as well as deal profiles (value-add to ground-up development). This gave me a broad background that allowed me to score interviews with developers, lenders, and acquisitions teams when I was switching to the principal side.
Can anyone that works as a debt broker shed light on all the information needed by the borrower besides the rent roll?
not a debt broker but a direct lender. Basic info needed is info on the sponsor, rent roll, historical operating statements or T-12 at the very least, proforma if you have it, sale/lease comps and market info will be a bonus.
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