Big vs. Small Real Estate Investment Companies – Which One is Right For You?

Whether you’re just starting out in the real estate investment business or a few years into your career, the companies you choose to work for can have a big impact on your trajectory in the industry, and where you end up when it’s all said and done.

When you’re trying to find a shop to start (or advance) your real estate career, it can feel like you’re in a minefield, not knowing which might catapult you towards career success, or leave you feeling stuck and unmotivated, potentially even looking to switch industries entirely.

And while this is only one facet of your decision in choosing a company, differentiating between big companies and small companies is key to narrowing your search, and making sure you end up in an environment that fits both who you are and where you want to go-long term. 

So to help with that, in this article, we’ll walk through the five main differences between big and small real estate investment firms, and which one might be right for you.

If video is more your thing, you can watch the video version of this article right here.

The Real Estate Job Search Process

You’ve put in the time and effort to gain the education and skills needed to work in the real estate industry, you’ve set your sights on a building a career in the business, and now you’re ready to jump head-first into the job market – but where do you begin?

It can be an extremely daunting task to decide on the exact company (or even type of company) you’d like to work for, especially when you’re early on in your career. Between cover letters, resume updates, networking, and interview prep, applying to jobs is no small task, so you have to be targeted and deliberate in the companies you choose to focus your efforts towards.

And when making decisions around which types of companies you want to aim for, one big dividing line between companies (that’s very easy to spot) is company size. 

Your experience working with a small start-up or entrepreneurial firm will likely be very, very different from your experience at a larger, more established company, and knowing which type of path is right for you is huge in making sure your first experience in the industry gives you what you’re looking for. 

In my own personal work experience, I’ve seen both ends of the spectrum, working at both big real estate investment firms with thousands of employees and offices across the country, and working at firms with as few as five people in the office and a focus primarily on local markets.

I can tell you first hand that these experiences are vastly different from one another.

And this isn’t necessarily a good or bad thing either way, but it’s important to be clear going into these different opportunities that both will prepare you in very different ways for your future career path. 

So, to help you sift through some real estate investment or brokerage firms that might be targets on your list, in this article, we will walk through the five biggest differences I’ve seen between working in small and large companies, and what each means for your career path. 

Overall Experience and Skill Set Gained

Real estate investment firms are not immune to the strains of scaling a business (far from it).

As a business grows and the volume of work grows, that business is forced to find ways to become more efficient. Part of that is reducing task-switching done by employees, usually resulting in the creation of very siloed departments, with dedicated specialists in each of these areas of the company.

Big Companies Create Skilled Specialists

In larger real estate investment firms, it’s very common to see this same theme play out.

At bigger shops, you tend to become a specialist in one specific area of the business or one specific task in the lifecycle of a deal. These companies will typically have dedicated teams for acquisitions, asset management, transaction management, construction management, and property management, and what you do on a day-to-day basis will depend on what team you’re on, and potentially even the geographic market(s) you’re assigned to.

The clear benefit of a scenario like this is that you tend to get really, really good at one or two specific things in these situations, which can be a huge asset if you plan continue to specialize within larger companies throughout your career, or you have a gap in your skill set that you want to practice consistently.

For example,  if you’re an Acquisitions Analyst at a major institutional firm, you’ll likely get a ton of reps underwriting deals and evaluating new investment opportunities, but you likely won’t have visibility into capital projects performed after acquisition, the intricacies of due diligence and deal closing, or the capital raise process as a whole.

Gaining expertise in one role in the deal lifecycle or becoming well-versed in a specific market can be a helpful factor in improving your career trajectory later on, and can be an important step in your career path. With that said, however, you’ll likely leave this type of role with some gaps in your skill set that were outside of your-day-to-day responsibilities on the job.

Small Companies Create Resourceful Skilled Generalists

Within a smaller company, efficiency is still a priority, but the resources might not be there yet to hire staff for each individual discipline.

And with that, employees at smaller shops tend to do a little bit of everything, which leads to significant learning opportunities across a wide array of activities and job functions.

Of course, you’ll likely have a job title labeling you as an Acquisitions Analyst or Asset Management Associate, but at companies with just a small handful of employees that are still relatively young, you’ll more than likely have your hands in just about everything.

For example, an Acquisitions Analyst at a small shop might be heavily involved in (if not responsible for running) the due diligence process, the transaction and closing process of the deal, and even the asset management analysis of that deal once the transaction has closed.

And with that experience, even though it might feel like a tall order at the time, you’ll be able to see deals through the entire life cycle of a transaction, and you’ll be exposed to several different parts of the business. And this is huge in figuring out where you might want to focus your efforts long-term, and/or preparing you for entrepreneurship if that’s a goal of yours in the future.

On the other hand, the downside of this is that, since the volume of deals is lower and your time and effort are spread more thinly over a variety of tasks and parts of the process, it’s extremely unlikely that you will get the kind of “reps” in that you might expect to see at a larger shop. So while the Acquisitions Analyst at a large, established shop might underwrite 500 deals per year in various different markets, that same Acquisitions Analyst at a small shop might only work on 3-5 closed transactions in a year, but they might also run those deals from start to finish (building a much more well-rounded skill set in the process).

Overall Job Difficulty

Two people with the same job titles can have very different day-to-day workloads at different companies, and the size of the firms those people work for can often play a big part in what that looks like.

Larger Shops Provide More Resources & Predictability

At a larger real estate investment firm, you’ll likely have a wide array of resources at your disposal.

Whether that’s established in-house training that you can rely on, or highly-trained specialists that you can lean on for guidance on various deal scenarios, bigger companies tend to consist of many layers of human capital (i.e. people) that are meant to make each other’s lives easier and their jobs more streamlined.

And with that, the overall difficulty of your job on a day-to-day basis at a larger shop will likely be relatively low once the initial learning curve flattens.

For some people, there is a significant sense of calm when the majority of the guesswork has been removed on a day-to-day basis. However, others might find this extremely boring, or might feel stagnant in their learning when the unknowns have mostly either been removed, or another professional is able to bail you out whenever you don’t have the answer.

Smaller Shops Require More Resourcefulness & Adaptation

At a smaller company, on the other hand, your on-the-job experience can vary tremendously on a day-to-day basis, and things can get very difficult very quickly.

These types of situations often represent what people refer to as, “Drinking from a fire hose,” or essentially taking in a ton of information and tasks and learning as you go.

Obviously, this can often create a significantly more stressful work environment, but for people who love a challenge and want to do something new every day, these types of firms could be a great fit.

With the larger variety of tasks you’ll likely be responsible for, and the time it takes to learn the ropes for each tasks, you might also find yourself working longer hours in these types of positions, with the answers not necessarily being at your disposal for everything you work on.

With that said, however stressful this type of environment, it can be invaluable to a young real estate professional’s career development, and can often allow you to pack in multiple years of experience in just 18 to 24 months on the job.

Career Upside (Internal)

The bigger the company, the more likely you’ll run across some red tape in growing within the firm, with either long, established tenures of your managers getting in the way of your own progression, or outdated, bureaucratic decision-making determining who gets promoted (and when).

This tends to create a significantly longer time-frame to be promoted or to take on leadership roles within larger firms, which can be frustrating to those who want to progress up the ranks in their careers quickly, or want to substantially improve how they’re compensated for the work they do.

On the other hand, at a smaller, entrepreneurial firm, the sky tends to be the limit as far as how quickly you can progress. If you add value and show leadership potential, there’s often the opportunity to advance quickly from the ranks of analyst to associate to manager or VP, and the attitude is very much towards putting the most talented people in the positions they need them in most, regardless of tenure or status within the organization.

If you want to move up quickly, and you’re willing to hustle and prove yourself to make that happen, a smaller shop is an excellent avenue to make that accelerated career progression a reality.

Career Upside (External)

This one is a tricky one, and tends to be less black and white than some of the other points on this list.

A big company comes with a strong brand name, which can be extremely helpful in the future to beat out other candidates for a new position you’ll target in the future, or giving you an additional layer of credibility if you strike out on your own and raise capital from investors.

Hiring managers may be more likely to call on you for an interview with a big-name shop on your resume, since this generally comes with the assumption that you’ve been trained in a systematic, methodical way, and you tend to do things “by the book”.

And for investors, people tend to be more willing to trust someone with their money when they’ve heard of the household name they’ve worked for, or they’ve already been trusted with hundreds of millions or billions of dollars of investment capital in the past.

However, speaking to a point discussed above, how you look on paper is only one part of the equation for career success.

At a smaller shop, you’ll likely gain an even more valuable skill set than your peers at big name shops will, making you a more resourceful, often more knowledgeable employee from day one on the job (with more hands-on deal experience, to boot).

And if you’re looking to become an entrepreneur, having gone through the entire life cycle of a deal in the past makes you far less prone to make significant mistakes when you’re first starting out, often leading to more successful acquisitions than those made by real estate professionals that might just look good on paper.

Again, there’s no right answer here, but where you want to end up might dictate your decision as far as what kind of shop you want to start out within.

Financial Upside

In a big-name shop, you might have the security of a steady salary and solid benefits, but these positions tend to lack equity upside if things go well at the firm.

At smaller companies, there is often the ability to invest alongside the company you work for in deals you work on, generally with significantly lower minimums and net worth or income requirements than what would be required from outside investors ($5K to $10K versus $50K to $100K).

As your responsibilities grow in a smaller firm, you also might be more likely to be offered a piece of each acquisition fee you bring in, or a portion of the asset management or disposition fees, or even a piece of the promoted interest on deals you materially participate in.

At a larger firm, it’s much less likely that you’ll have these types of opportunities until you get to the most senior executive levels, and even then, these types of agreements are generally tied to many years of tenure at the firm or fine print that make these types of opportunities not as great as they might seem on the surface.

Where Do You Belong?

Again, there is no right or wrong answer here.

At a smaller shop, you’ll generally gain more hands-on experience and become a more resourceful, well-rounded real estate professional that’s well prepared for entrepreneurship if or when the time comes.

At a larger shop, you’ll generally become a more highly-skilled specialist, groomed with the best practices of the industry, and with a strong brand name to add to your resume for your next position and/or to gain credibility when going out on your own.

Either way, the goal is to be honest with yourself about what your long-term goals are and how you work best, and to make sure the firms you’re targeting reflect that. The last thing you want to do is choose incorrectly for your first role, and end up with a bad taste in your mouth in the real estate industry in general, when you may have had a significantly different (or more enjoyable) experience somewhere else.

Where To Go Next

If you want more guidance on what might be best for you based on your own unique interests and goals, make sure to check out our premium training platform, Break Into CRE Academy.

An Academy membership will give you instant access to all Break Into CRE courses, pro forma templates, and career resources, as well as in-depth video training on the different parts of the real estate industry to find out where you might fit in best. You’ll also have access to private, one-on-one, email-based career coaching support to get feedback on your own unique situation, and how to best position yourself to land the roles you’re targeting.

I hope this helps you get a better idea of where you might fit in best for your first (or next) role in the industry – good luck!