what's up everyone it's kenji here and today i thought i'd go over five different career paths
in the real estate industry so for those that don't know when i started at cornell university
one of my concentrations was in real estate and so this is a career path that i contemplated for
myself and a lot of my colleagues ended up working in the industry so i'll do my best to try and
explain these paths and i'll rank each of them by difficulty meaning how hard it is to get the job
work hours so the work-life balance basically and thirdly the compensation so let's get into it
firstly we have real estate investment banking and this role has to do with providing debt or equity
financing so raising money for clients and on the other hand with advisory services so advising them
on asset sales or mergers or acquisitions as well the clients here aren't individual homeowners or
individual building owners but instead they're entire companies so it could be a company in the
hotel space like marriott say it could be one in the gaming space not really like computer
games but rather casinos and things like that as well as real estate investment trusts which
are basically a type of company that invests in real estate and they get certain tax breaks some
of the major employers in this field include the big investments like jp morgan bank of
america or citibank as well when it comes to the pay as a first-year analyst which is the entry
level position you can expect to be earning over a hundred thousand as your base level salary and on
top of that you'll get a bonus which obviously depends on your performance as well as that of
your team but you can expect to earn around 150 000 fresh out of college so for those reasons for
the pay we'll give it a 5 star that being said the hours are particularly difficult i'd say
around 80 hours a week is what's common there so obviously a lot more than your average job
so for that for the work life balance we'll give it a two star when it comes to recruiting even
though they do offer summer internships as well as full-time jobs it is very competitive typically
you'll be a graduate or a student in one of the best universities in your country you'll have
relevant work experience and maybe you've even networked with somebody in the industry so trying
to understand it better so for those reasons when it comes to difficulty to getting the job
we'll give it a one star as it's very hard to get in next up we've got real estate private equity
and unlike in real estate investment banking where you're primarily providing financing
or advisory services in private equity you are actually acquiring the property and monitoring it
and i split this down into two sub-categories on the one hand the real estate acquisition side
and on the other hand the real estate asset management so looking at the real estate
acquisition side first typically they raise money from outside investors and invest some money in
trying to find an attractive property looking for the right financing for it so how much should you
have in debt how much is that debt going to cost etc and lastly acquiring that property
these outside investors are usually the likes of pension funds insurance companies or endowment
funds as well once a process is complete you have the real estate asset management side which is in
charge of making sure they get a good return on the investment once it's been acquired they look
for financial performance as for the physical management of the property so things like
if they bought a hotel say the housekeeping the maintenance and all that all that stuff
they'll actually be outsourced to a third-party management company so it wouldn't actually be
the asset manager per se the asset managers oversee the bigger picture so trying to follow
the business plan and eventually selling the property for a return both of these
roles do sometimes include impersonal visits so it's not just say number crunching on excel
some examples of big players in this field include the general private equity funds like
blackstone or kkr as well as more real estate specific ones like brookfield or lassel when
it comes to the compensation it can reach around the 100 000 range and it's usually slightly higher
for the acquisition side compared to the asset management side which might have a say twenty
percent discount so for those reasons we'll give them a four star and a three star respectively
alongside the compensation you can expect the work hours to differ a bit as well on the acquisition
side you can expect to work around 60 hours a week while on the asset management side it's
more around 50 so we'll give them a three star and a four star respectively lastly for breaking
into this type of role the guidelines are not as clear as in real estate investment banking
for example you can work as a real estate broker for a few years and eventually make
it into private equity similarly you can work at a bank and then make that switch or like some of my
friends have just getting fresh out of college as well that being said for the acquisition side it's
slightly more prestigious and so we'll give that a two star rating as it's harder and on the other
hand for the asset management side we'll give it a three star rating as it's slightly easier
next up we have real estate broker and this is actually what my friend michael did as an
intern before joining tesla which you can find the video on that somewhere up here
in this spot there's generally a split between residential and commercial spaces
when it comes to residential it's more like individual condo units homes other things
like that where there might be a junior broker as well as a more senior one and the junior one is
mainly in task in charge of administrative tasks showing around the property sending emails etc
on the other hand there's commercial spaces which are just generally bigger so it might
be the likes of a warehouse it might be a shopping mall or entire building as well
and generally there's going to be a junior broker within a small team because commercial spaces are
bigger usually a junior broker will do somewhat more sophisticated tasks like what might be
financial modeling or deal facilitations as well some of the more well-known residential players
include keller williams as well as century 21 on the other hand for the commercial side these
include cbre as well as jll that being said these big commercial players sometimes do have
subsidiaries that do residential too when it comes to the work life balance it's generally quite good
that's because it's fairly flexible in that you're the one that meets with clients and chooses the
time frames for that that said it will obviously depend on the size of your team and how many
clients they're taking on but generally a rough guide is around 45 hours a week
so for that we'll give it five stars now let's get on to the pay and here's when it gets a bit tricky
brokers operate on a eat what you kill basis which basically means that they get commissions for each
sale and so the more they generate basically the more they're gonna make that's why the range here
varies quite a lot typically if you look online you'll go anywhere from like 23 000 all the way
to 700 000 and the median's around 175 000 that's obviously for more senior brokers that's on the
more commercial side but on the residential side it's usually slightly less than that at around say
70 000 or so and so combining those two will give it around the three star rating for that
looking at the recruitment difficulty because it's such a relationship based job there is a
lot of networking involved in there also unlike many of the other career paths that i've mentioned
this one does require a license and so that's an extra requirement there so overall we'll give it
a two stars when it comes to difficulty as it is rather tricky and the last career path we'll look
at is real estate development so what does a real estate developer do in short firstly they need to
find the financing from investors and lenders on top of that they need to find the property or the
land that they're wanting to acquire hopefully acquire that get the right zoning permits and
after that oversee the whole development process it is very much relationship based and there's a
lot of parties involved after all you need to hire the architect the engineer interior designer etc
overall though typically the actual developer will also put in some money himself for herself and on
top of that they'll be the bigger portion from the investors when it comes to the pay and the
work-life balance this isn't really a conventional job in that you show up and you earn a salary
instead it's a lot more entrepreneurial in that there's nothing guaranteed but the potential
upside is unlimited that's why you hear of all of these real estate developer billionaires like
wang jung ling one of the richest man in china donald bread or even donald trump so we'll put
both the work life balance as well as the pay at three stars really because it could go either way
some examples of the big name players include the wanda group irving company as well as the related
companies looking at the difficulty this type of a role doesn't really require any sort of a license
or a particular degree but generally it is common to have previous work experience in the industry
overall though because you don't really need permission from anyone to get started
i'll give it a four stars when it comes to recruitment difficulty
obviously this is just five different career paths it's by no means a complete list
do let me know in the comments though if you would like a part two also if you're interested in
seeing more videos about me i recently partnered with money under 30 a finance publication to
create a series of videos on investing and the stock market the content ranges from index funds
to zero commission brokers and much more they're all completely free and you can find them down in
the description below so feel free to check them out if you're interested that's all for this one
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you