What to say in a CRE interview
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[{"id": "ech99lx", "text": "Make the conversation a friendly one. Be interested in them and they will be interested in you. ", "replies": [], "depth": 1}, {"id": "echydpd", "text": "Hey there! [I wrote a blog post tonight](https://leveragedbreakdowns.com/2018/12/25/what-are-real-estate-private-equity-interviews-like/) that describes your typical REPE interview, which would be quite similar to a CRE interview. Much more detail there, but quickly here is a list of some of the most common interview questions you should anticipate:\n\n1. Why are you passionate about RE?\n2. Consider two office buildings directly across from one another in Midtown Manhattan. Assume these buildings are physically identical and, given their proximity across the street, are in the exact same submarket. What elements would you consider to individually value each building? What factors could endow one building with a higher or lower valuation than the other?\n3. Name some of the primary RE valuation methodologies\n4. Please order the major RE sectors in order of risk and explain why.\n5. Which asset would you rather own during an economic downturn? A hotel, an office building, or a residential building? Why?\n6. How does the tenancy of an office building vary from that of an apartment?\n7. What are the core differences between gateway and secondary markets?\n8. Would you expect more liquidity in a core or a secondary market?\n9. Name some of the primary RE valuation methodologies\n10. Walk me through the fundamentals of a single property real estate LBO model\n11. If I purchase an asset for $1M at a 5 cap, achieve 0% NOI growth over my hold, and exit with no cap inflation after one year, what\u2019s my IRR?\n\nIf you're looking to prep for a case study or beef up your technicals, my CRE course, [Breaking Down Real Estate Private Equity](https://leveragedbreakdowns.com/course/), is a labor of love meant to bring outsiders into the industry with insider insight. I also have a newsletter that disseminates similar detail, [you can sign up on my front page](https://www.leveragedbreakdowns.com).", "replies": [{"id": "ecjjty3", "text": "What\u2019s up LB,\n\nAny answers on these you can provide?", "replies": [{"id": "ecjo6kw", "text": "1. Needs to be relevant to your personal path\n2. Rent roll, operating financials. For example, if one building has a longer-contracted tenancy with same rents, it'd be worth more. If a building has a spec floorplan that would be hard to retenant, that'd ding the valuation. Stuff like that.\n3. LBO, Comparable Sales\n4. This isn't canon, but generally you want to know what the rent roll looks like in an economic downturn. Hotels are the first to go, followed by retail, then office / industrial is a toss-up (you really get into building-specific lease terms here, but both have longer term tenancy generally so safer), and multi is generally considered safest b/c people downsize their living space last\n5. Probably not a hotel. Office/multi is a toss-up. I'd prefer to own an office with a strong AAA tenant that has a long lease in a downturn. However, class A multi could be a good defensive asset (you'll still get dinged on depressed rent growth)\n6. Office building usually has a handful of tenants occupnying most of the space with very long lease terms. Multifamily is usually annual tenant roll.\n7. Gateway's pricier, has more tenancy, charges higher rents, etc. than Secondary. Gateway represents your top markets like LA, SF, NYC, etc.\n8. Core market\n9. see #3 above (didn't realize I repeated myself)\n10. See [my course](https://www.leveragedbreakdowns.com/course/) for this\n11. See if you can't knock this one out yourself, it's pretty straightforward. My course would give you the tools to solve this pretty quickly, too.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "echye5b", "text": "You missed the interview mate", "replies": [{"id": "ecj6b2d", "text": "Haahah my bad, guess I\u2019m screwed", "replies": [], "depth": 2}], "depth": 1}, {"id": "ecj5j2i", "text": "Tell them you love to cold call, and you don't mind working on 100% commission", "replies": [], "depth": 1}, {"id": "ectln6w", "text": "I think you have to display a couple different things to make a great impression for the interview.\n\n1. Passion. Whether it be for real estate, entrepreneurship or just making money in general. CRE has a very high turnover rate so if you can show that you're passionate about the opportunity brokerage presents - you'll give the hiring manager a higher sense of confidence that you'll stick through the tough times (which is always the first 2-3 years) and won't just add to the turnover rate.\n2. Professionalism. Show up in a suit and tie. Don't be the kid who's too lazy to put on a tie and expects to work with guys who pull 7 figure incomes.\n3. Communication skills. I think one of the most important aspects of brokerage is being able to communicate effectively and build rapport. Have a normal conversation with your interviewer. Don't try to impress him that much - just show that you're a normal guy who wants the opportunity for the role. I think being able to hold a good conversation holds more weight than a super-high GPA.\n4. Persistence. The hiring manager in my office will purposely not follow-up with a candidate after an interview. He wants to see the candidate show the initiative to follow-up with him. Don't be afraid to follow-up with voice messages and emails - this is what brokers do with clients on a daily basis.\n5. Research. Show him that you did your research and read up on CRE brokerage. Talk about which property type is most exciting to you and why.  Tell him how you're not afraid to prospect (door-knocking, cold calling, hand-written letters) because you understand brokerage is a numbers-game and 100 calls may lead to 10 meetings which may lead to 4 property analyses and eventually 1 listing. No matter where you go for a job interview, doing your initial homework is vital.\n\nGood luck buddy, let us know how it goes.", "replies": [{"id": "ectxuxw", "text": "Wow. Thank you very much, this is super helpful! I will make sure to follow these guidelines and will let you know how it goes! Thanks again", "replies": [], "depth": 2}], "depth": 1}]