5 *Big* Real Estate Career Mistakes [& How To Avoid Each]

If you’re trying to build a career in commercial real estate, there are a lot of decisions you’ll need to make early on that can have a huge impact on your trajectory in this industry.

While some mistakes are pretty easy to recover from, others can set you back a lot when it comes to your earning potential and long-term career growth.

So in this post, we’ll walk through five of the biggest career mistakes I’ve seen people make in commercial real estate after more than a decade of experience working in this industry, and the things that you can do to avoid making each of these.

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Mistake #1: Picking a Career Focus Based on Current Market Conditions

The first big career mistake I see people make is picking a product type to focus on based on what’s hot in the market at any given time.

Real estate is an extremely cyclical business, where asset classes move in and out of favor on a regular basis. This means that what’s most popular today very likely won’t be by the time you’re finally starting to make some major strides in your career.

30 years ago, office was considered one of the safest asset classes to invest in, with what were considered “bond-like” cash flows attracting pension funds and insurance companies. Meanwhile, multifamily real estate was seen as too fragmented and management-intensive for most major institutions.

However, multifamily real estate is considered today to be an extremely durable asset class with a lot of pent-up demand, while office is considered to be an extremely volatile product type with a very uncertain future.

The key takeaway is to pick a product type that you’re excited to learn about and become an expert in, regardless of where we are in the cycle, and to be ready to capitalize on favorable market conditions whenever they end up materializing.

Mistake #2: Not Pivoting Quickly

The second big career mistake I see people make is not changing jobs quickly enough when they know they’re on the wrong path.

If you’re working in a role where you’re not learning or working for a company where you see very little potential for advancement, the longer you stay in that position, the further you’re going down a path that you ultimately don’t want to be on.

A lot of people get really concerned about having a short stint on their resume, but especially if this is early in your career and you’re still in the process of figuring out where you want to end up in this industry, the faster you can cut ties with a job that isn’t the right fit, the faster you can get on the right track.

This doesn’t mean that I recommend quitting immediately when a job feels hard or you run into a little bit of conflict at the office, and I would highly recommend having a new job lined up before leaving your current role. However, if you have a significantly better offer lined up and you’re worried about how it would look to leave your current role after just ~9-18 months, it’s almost always the right decision to take a chance and accept the offer.

Mistake #3: Waiting Too Long to Strike Out on Your Own

The third big career mistake I’ve seen over and over again is people waiting too long to start their own company.

If you have any desire to become an entrepreneur, you need to be very intentional about when you plan to take the leap, and you also need to be realistic about how your life may change over time.

I’ve worked with so many people over the years who had elaborate plans to start their own firm when market conditions “made more sense.” But today (many years later), almost all of these people are still working in that same job they were in, with a lot more responsibility both at home and at work.

The reality is that as people get older, they tend to become a lot less likely to take on more risk, especially if they’ve gotten used to a big, steady paycheck.

In my experience, the sweet spot for people to strike out on their own in this industry is usually somewhere between the ages of about 27 and 32. In this window, people often have about 5-10 years of work experience, they’ve built a meaningful number of relationships, and they likely don’t have insurmountable financial obligations that would prevent them from taking a risk.

There are people who take the leap into real estate entrepreneurship successfully in their 40s and 50s, but from what I’ve personally seen, these are often people at the very top of the industry who have already achieved some sort of financial independence. With that in mind, if this is something you want to do early in life and you don’t want to spend another 20-30 years working for someone else, this timeline is definitely something to consider.

Mistake #4: Waiting Too Long to Build Relationships

The fourth major career mistake I see a lot is waiting too long to start investing in relationships.

Even if you’re working as an analyst and there are no expectations for you to bring in new business, you should still be out at industry events and conferences trying to make connections.

Real estate is an extremely relationship-driven business, and just like any investment, these relationships compound over time. The earlier you can start getting your name out there, meeting new people, and building trust with your peers, the more likely it is that you’ll be able to do business with these people in the future.

There are so many benefits of building your network early, from job opportunities that might come up to investment opportunities that might come your way, or even just getting a clearer sense of whether you’re being underpaid in your current role. Especially in your 20s, when you very likely don’t have significant family responsibilities at home, spending as much time as possible at industry events and conferences can have a huge positive impact on your long-term career growth.

Joining organizations like ULI and NAIOP can be a really easy way to get the ball rolling with this, since these are great places to connect with other industry professionals and build your network quickly, while also learning about different parts of the industry that you might not have been exposed to.

Even if there isn’t a local ULI or NAIOP chapter in your area, creating your own group of your peers that meet up for dinner or drinks on a regular basis can be a great way to deepen your relationships and get a real-time pulse on the market.

Mistake #5: Blindly Accepting Golden Handcuffs

The last big career mistake I want to mention is blindly accepting golden handcuffs early in your career.

Just like you probably aren’t going to marry the first person you date, you probably aren’t going to stay with the same company throughout an entire 30-40-year career, so you want to be really careful about how the incentive structures you agree to might impact your long-term flexibility in the industry.

The vast majority of compensation structures in this industry that include participation in fee income or promoted interest take at least about 4-5 years to vest, and if you leave before that timeframe, you could end up losing most or all of that money.

This can end up causing you to pass up opportunities that might actually be better for you overall, whether that’s moving into a less hostile work environment, increasing your base salary or bonus, or even moving to a different city that might be closer to family.

Even though it can feel flattering to be offered these types of packages, the key is to make sure you go in understanding the timeframes and requirements to actually receive that money, and make sure all of these terms are clearly stated in writing.

How To Break Into Commercial Real Estate

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