The Best (& Worst) Jobs For Aspiring Real Estate Entrepreneurs
Real estate is an extremely entrepreneurial industry.
And for many people who start a career in the business working for someone else, the end goal is to ultimately do their own thing and build their own investment firm or portfolio in the future.
For these people, a main goal 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, making choosing the right early-career jobs a critical piece of the puzzle for real estate professionals with entrepreneurship in their future.
And if you fall into the camp of “future real estate entrepreneur” yourself, this article will walk 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 the article right here.
Get Paid To Learn
As someone who has seen this work time and time again (including in my own career), I’m a pretty big fan of the “learn, then earn” model, specifically through the process of working for another company that does what you want to be doing long-term.
In my experience, this is really the best 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 connections that will ultimately help you be successful when you do make the decision to strike out on your own.
In order for this strategy to work, though, those one or two jobs you end up working in during the first few years of your career are important. Specifically, these roles 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 will fit into that category.
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 happen, and the case for (or against) each.
Best Jobs For Real Estate Entrepreneurs – Acquisitions Analyst
The top job on this list probably won’t surprise you, and that is a role in acquisitions.
Landing an acquisitions analyst or 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, with these roles essentially providing you the opportunity to get paid to learn how to analyze, value, and close on profitable real estate deals.
Acquisitions roles tend to be some of the most valuable types of positions to prepare you for entrepreneurship because they’ll also generally expose you to a significant amount of transaction volume. And seeing this transaction volume will give you the context to be able to start spotting patterns and operational norms in the markets and product types you’re working in, accelerating your learning curve and building your experience levels in a very 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 memos or investment committee presentations, which will also help you learn what equity investors are looking for 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 as a soon-to-be entrepreneur. And 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 in the future.
Best Jobs For Real Estate Entrepreneurs – Investment Sales Analyst
If a job in acquisitions isn’t in the cards for you, a close second to an acquisitions role to prepare you 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 also Offering Memorandums for potential buyers. And both of these responsibilities will force you to get really good at finding untapped value potential in a deal and highlighting 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 own future projects as attractive investment opportunities.
I would also include equity placement analyst or capital markets analyst roles in this category, or really any other third-party intermediary position where you’re looking at a deal from an equity investor perspective.
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 own projects in the future.
Best Jobs For Real Estate Entrepreneurs – 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 is asset management.
Asset management analyst or associate roles aren’t quite as ideal as the first two positions on this list, since these types of roles don’t generally provide an in-depth training ground in acquisition analysis/valuation and won’t expose you to the kind of transaction volume 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 than many of their peers with an acquisitions or investment sales background.
Working in asset management allows you to see how deals actually perform, not just how they’re expected to perform.
Having this experience can teach you to ask relevant 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 analyst background very well might miss.
These types of roles will also often expose you to investor reporting and communication, which is a key part of building a business and maintaining (and growing) a base of equity partners over time.
Especially when operations don’t go as planned (as was the case for many office, retail, and hospitality operators in 2020), 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.
Real Estate Career Paths To Avoid
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 entrepreneurs, let’s go over some other positions that might not be the best fit for preparing to go out on your own, and a few roles that I might think twice about taking early on in your career.
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, these roles don’t require an in-depth knowledge of underwriting of property acquisitions, analyzing return metrics, structuring and modeling partnership agreements, and sourcing debt and equity to fund a real estate deal.
And 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 during the process.
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, 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 associate roles usually only exist at the larger firms which often have 50 to 100 or more properties under management. And with that, roles like this tend to be very focused on a very high-level overview of the portfolio as a whole, rather than the operations of individual properties within that portfolio.
This means that positions in this part of the business will usually skip over any property-level analysis on individual assets, and 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.
Portfolio management roles at bigger firms can sometimes get you involved with a piece of the equity raise and the investor management process, which can be helpful in some circumstances. 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 syndications starting out.
Loan Underwriting Analyst
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 roles working for traditional or agency lenders, you’re looking at deals and making sure they fit into a certain “box”.
And in most situations in these types of firms, 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 the 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 this tends to result in most lending professionals 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.
Now lending roles that are client-facing and transactional, like debt placement, mortgage brokerage, 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 want to own and operate commercial properties long-term.
The Best Real Estate Jobs For You
If your long-term goal is to go out and do your own thing, these are the types of roles I’ve seen real estate industry professionals have the most (and least) success from as a starting point.
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) if you’re trying to build a skill set to go off on your own in the future.
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 in the business, make sure to check out the How To Land a Job in Private Equity Real Estate course on our Courses page.
And if you want more individualized guidance to break into the industry, along with access to all Break Into CRE courses, models, and career resources, make sure to check out the full Break Into CRE Academy membership.
Good luck in your entrepreneurial journey!