The Best (& Worst) Jobs For Aspiring Real Estate Entrepreneurs
Real estate is an extremely entrepreneurial industry, and for many people who break into a career path in the business working for someone else, the end goal is to ultimately build their own investment firm or portfolio in the future.
As part of that, a main goal for these people in the beginning of their careers is to use their on-the-job experience to learn the skills they’ll need to eventually go off on their own. And with that, this makes choosing the right jobs a really critical piece of the puzzle for real estate professionals with entrepreneurship in their future.
Based on my experience of seeing what tends to work (and not work) in the CRE entrepreneurship space, and knowing the pressure that inevitably comes along with picking that first or second job in the industry, in this article, we’ll talk through some of the best jobs to get into if you’re a young real estate professional trying to set yourself up for success on an entrepreneurial path, and a few types of positions that might be worth thinking twice about before saying yes to an offer.
If video is more your thing, you can watch the video version of this article here.
Get Paid To Learn
Having been around the real estate industry for a while, I’ve become a very big proponent of starting a career working for someone else, even if you have goals to be an entrepreneur in the future. And specifically, I’m a big fan of working for another company that does what you want to be doing long-term.
In my experience, this is an excellent way to learn the best practices in the industry, to spot opportunities around where you might be able to improve upon the current system, and to make the industry connections that will ultimately help you be successful when you do make the decision to strike out on your own.
With that said, though, in order for this strategy to work, those one or two jobs you end up working in during the first few years of your career need to help train you to build the actual skill sets you’ll need to be successful, and not all jobs in commercial real estate are equal in this regard.
So, if your long-term goal is to do your own thing and build your own real estate investment firm or portfolio as an entrepreneur, let’s go over some of the best and worst jobs to make that a reality, and the case for and against each.
The Best Jobs For Future Real Estate Entrepreneurs
The top job on this list probably won’t surprise you, and that is a role in acquisitions.
Landing an Acquisitions Analyst or Acquisitions Associate position tends to be one of the best ways to get “reps” in, and to practice the things you’d be doing to build a portfolio of your own. These types of roles essentially give you the opportunity to get paid to learn how to analyze, value, and close on profitable real estate investment opportunities, which is ideal if you’re planning to take the leap into entrepreneurship in the future.
Acquisitions roles also tend to be some of the most valuable types of positions for soon-to-be entrepreneurs because they’ll generally expose you to a significant amount of transaction volume.
The more transaction volume you see, the more quickly you’ll start to spot patterns and operational norms in a market, accelerating your learning curve and building your experience levels in a relatively short period of time.
Most of these jobs also require you to participate in the capital raising process either directly or indirectly, through creating investor Offering Memorandums or Investment Committee presentations. Both of these activities will help you learn more about what equity investors are looking for in sponsors and specific projects, and the biggest risks or trigger points that can cause investors to shy away from certain deals.
Overall, acquisitions roles will expose you to some of the best practice you can get before you strike out on your own. And in these positions, the more of the process you can participate in, including closing, the takeover of the property when the deal is acquired, and the debt and equity raise itself, the more well-prepared you’re going to be when it comes time to start doing your own deals.
Investment Sales Analyst
If a job in acquisitions isn’t in the cards for you, a close second to an acquisitions role to prepare to go out on your own is a role in investment sales.
Investment sales analyst or associate positions, especially on a team doing a large amount of transaction volume, can give you great training around the analytical skills necessary to underwrite deals, the pitfalls that can scare away buyers or make a deal fall apart altogether, and even how to win business and find off-market opportunities where there’s untapped value and profit to be made.
Investment sales analyst roles also will generally require you to build out Broker Opinion of Value (BOV) documents for potential sellers and Offering Memorandums for potential buyers, both of which force you to find value potential in a deal, and to highlight where the upside might lie for a future investor in the property.
By learning the skills necessary to frame the deal in a way that maximizes the property value for the seller, you’re also learning the skills necessary to be able to sell a deal to equity investors, and learning how to showcase your projects as attractive investment opportunities for potential equity partners in the future.
I would also include in this category Equity Placement Analyst or Capital Markets Analyst roles, or any other third-party intermediary position where you’re responsible for analyzing deals from an equity investor perspective on a day-to-day basis.
As long as you’ll be interacting with clients to understand their investment decision-making process (and the factors that influence that process), you’ll be in great shape to leverage that experience into buying your own deals and finding investors to partner with you on your projects.
Asset Management Analyst
Investment Sales Analyst and Acquisition Analyst roles are great, but they’re also some of the most in-demand jobs in the business for young professionals just breaking into the industry.
So, if you’re having a tough time getting traction on either of those types of positions (or neither of those types of roles sound like the right fit for you), another path to consider if you’re preparing to build your own company or portfolio in the future is asset management.
Asset Management Analyst or Asset Management Associate roles aren’t quite as ideal as the first two positions on this list, since these types of positions don’t generally provide an in-depth training ground in acquisition analysis and won’t give you the kind of transaction volume exposure you’d see in an acquisitions or investment sales position.
However, where asset management professionals have the upper hand here is that, when they do end up underwriting deals, their experience in the hands-on management of commercial real estate actually makes their underwriting significantly stronger, by using more evidence-based assumptions to predict how a property will operate in the future.
Working in asset management allows you to see how deals actually perform (not just how they’re expected to perform), and you’ll be involved with the business plan execution around things like renovations and re-leasing efforts to add value to a deal.
Having this experience can teach you to ask the right questions to brokers and sellers before acquiring deals on your own, and can also allow you to spot operational opportunities to decrease expenses or increase revenue that someone with just a purely transactional acquisitions or investment sales background very well might miss.
These types of roles will also often expose you to investor reporting and communication, which are key parts of building a business and maintaining (and growing) a base of equity partners over time.
Especially when operations don’t go as planned, the more practice you can get in this arena, the easier this is going to be when you’re communicating directly with your own investors in the future.
The Worst Jobs For Future Real Estate Entrepreneurs
If you had your pick, those would be my top three recommendations for roles to shoot for if you’re planning to build your own real estate investment firm or portfolio in the future.
But while choosing the right job is important, making sure to not take the wrong job is equally as important. So now that we’ve covered the best jobs for aspiring real estate entrepreneurs, let’s go over some other positions that I might think twice about taking if you’re planning to build your own business in the future.
The first type of position I would be weary of is a role in leasing, especially tenant representation.
In my experience, seeing leasing professionals doing their own deals and building an investment firm is relatively rare in the industry, and these types of roles tend to leave some major gaps in an investment analysis skill set that are necessary to accurately underwrite and value properties.
The issue that leasing professionals tend to run into is that their job doesn’t generally expose them to the things that are required to build and operate a real estate portfolio on a day-to-day basis. Specifically, leasing agent responsibilities generally don’t include the underwriting of property acquisitions, analyzing return metrics, structuring and modeling partnership agreements, and sourcing debt and equity to fund a real estate deal.
Without this experience, this tends to make it difficult to figure all of these things out after striking out on your own, and the learning curve can be steep when going through this process for the first time without a company to back you.
With that said, there is definitely merit to understanding leasing patterns in a market and where opportunities might lie. However, if your long-term goal is to own and operate your own portfolio, you’ll likely come out of a role like this with some pretty big gaps in your skill set that might make the jump to entrepreneurship a little bit more challenging than it would be coming from a different part of the industry.
Portfolio Management Analyst
Aside from leasing positions, if you’re looking to do your own thing long-term, another part of the business to be weary about starting out in is portfolio management.
Portfolio Management Analyst or Portfolio Management Associate roles usually only exist at larger CRE firms which often have 50 to 100 or more properties under management, which means that these positions (by design) will usually skip over any property-level analysis on individual assets. And with that, the key skill sets you’ll need to strike out on your own, including underwriting new transactions, closing on new deals, or driving the execution of the business plan on individual projects, won’t be a part of your job description in almost all cases.
This isn’t to say that these roles don’t have their benefits, as portfolio management roles at bigger firms can sometimes have you involved with a piece of the equity raise and the investor management process. However, if you’re not planning to raise your own fund immediately after starting your company and plan to start out doing deals on a one-off basis, the fund-level experience isn’t necessarily going to be applicable to the JV operating agreements and smaller-scale reporting you’ll have to master when doing your own transactions.
Loan Underwriting Analyst (With No Client Interaction)
Finally, in certain cases, I would also be weary of certain roles on the debt side of the business, specifically underwriting analyst roles that don’t involve client interaction or sourcing new business for the company.
In many underwriting positions, especially in agency lending settings, the main responsibility of analysts at these firms can often be to look at deals and make sure they fit into a certain “box”.
In these types of environments, the lender generally isn’t looking too far past the first year of operations, and usually doesn’t get heavily involved with any of the equity waterfall structures or details of any capital projects on the deal.
Borrower assumptions are definitely scrutinized on the lending side, but the level of granularity between the way a lender looks at a deal versus the way an equity investor looks at a deal tends to be pretty different. And with that, most lending professionals end up having some catching up to do when they make the move to the equity side of the business, and start looking at deals from an owner/operator perspective.
Again, lending roles that are client-facing and transactional, like debt placement or mortgage brokerage roles, or analyst roles at debt funds, would be significantly more beneficial here, and will get you some solid experience to leverage in the future.
However, these roles obviously prepare you more for doing your own debt deals rather than becoming an equity investor, which can be somewhat of an indirect route to getting to where you want to go if you plan to own and operate commercial properties long-term.
Which Role is Right For You?
Overall, if your long-term goal is become a real estate entrepreneur, but you want to learn the ropes and get paid to learn first, these are the types of roles I’ve seen real estate industry professionals have the most and least success from when striking out on their own.
If you have entrepreneurial goals in the business, I hope this gives you some ideas on where you might want to head into the industry first (or next), and what types of positions will help you build the skill sets necessary to be successful in CRE.
And if you want to go into more detail on the different parts of the commercial real estate industry and where you might fit in best, make sure to check out How To Land a Job in Private Equity Real Estate available on our Courses page, and if you’re looking for more individualized guidance to break into the industry, make sure to check out our premium training platform, Break Into CRE Academy.
A membership to the Academy will give you instant access to all Break Into CRE courses, including detailed walkthroughs of solutions to sample interview Excel exams, practice case studies and exam questions, training on how to tighten up your resume and LinkedIn profile, as well as one-on-one email based career coaching to help guide you throughout the job search process as you’re trying to find where you want to go in the industry next.
I hope this was helpful if you’re looking to prepare for an entrepreneurial future. Speaking from experience, it’s worth it.