Does anyone working in CRE / PE invest Personally in Real Estate
Hello there,

I am going to be interning this summer for a large Private Equity firm working in their commercial real estate team, and was curious to hear from people who are more experienced in the CRE industry (whether in Brokerage, acquisitions, asset management, etc.) whether they themselves invest personally in real estate investment properties, or know anyone at their companies who do so.

To give a little bit of background, I will be an undergrad senior next year and have always wanted to scale up my own real estate investment business. I figured that working in CRE / PE would only help me in becoming a better investor, but as I transition to a full career in PE I worry that I might not have enough time to devote to looking for deals / managing my properties.

Anyone here have experience doing both? Especially in the first few years of their career? I've always told myself that after 10-15 years I'd like to move away from my career permanently to focus on my investment business. I have a good amount of money set aside from working in high-school / college to pay for down payments on fixer-upper properties.

Please lmk what you think, and thank you.
[{"id": "h08k6hh", "text": "Yes I do both. I work in a small CRE development group. Eventually I was made partners on deals I originated and now I do deals on my own as well.", "replies": [], "depth": 1}, {"id": "h08kw6o", "text": "It\u2019s definitely doable. I\u2019d save up for a decent sized purchase to obtain economies of scale and then buy a multi unit property or something that needs work where you can invest capital to raise the NOI and then refinance all (or almost all) of your initial down payment. Rinse repeat. The only issue you\u2019ll face is time. You\u2019ll lose weekends partying and be away from friends/partners by going this route. \n\nI started my career doing compressed workweeks where I\u2019d get one day every two weeks. I\u2019d bank a few and take a 4 day weekend and go work on my properties. Did it for about 3 years until they took it away because of a promotion. Ended up with over 15 doors and am now working on a development. Under 10 years into career and work for institutional investor focused on real estate. Feel free to pm.", "replies": [], "depth": 1}, {"id": "h08yqaj", "text": "Most of the senior team members at my firm invest in at least some of the deals alongside our primary equity. It\u2019s a pretty good perk for folks that stick around long enough and make an impact at the company.", "replies": [], "depth": 1}, {"id": "h08znjo", "text": "Do the fixer uppers while you\u2019re young, before you have kids.", "replies": [], "depth": 1}, {"id": "h0925vc", "text": "I've been out of school and in CRE for 3 years; started as a trainee appraiser, now work for the county. I switched due to better work/life balance and a pay increase. Working on investing in multi-family myself (ironically with no valuation experience in multi-family).\n\nOur first home is essentially a live-in flip (still living in it and likely not selling, but renting at some point). Equity is up over $100K after $30K in repairs/renovations. Husband and I did most of the work ourselves due to the struggles of being a recent grad starting a career. We are now looking to access equity to potentially purchase MF. If we rented tomorrow without pulling equity, we'd conservatively have an NOI of $450 per month. \n\nI'm a small fish, but you gotta start somewhere. Took off a week recently to try and get some things finished on the house. It is a lot of sacrifice and sometimes it makes you want to pull your hair out. The husband is self-employed and goes through dry spells, so it gives him the opportunity to work on it. I have plenty of time to look for properties, but in the current market, it is hard to find properties that meet our criteria and make sense financially.", "replies": [], "depth": 1}, {"id": "h094dhk", "text": "Yes.", "replies": [], "depth": 1}, {"id": "h09af8q", "text": "I started off in commercial brokerage selling apartments in 2013. In 2017 we purchased a distressed 20 unit from a guy who refused to list since he was embarrassed about the condition. (\"I don't give a shit if santa clause buys it.\" was his response when we asked if we could take a run at it). \n\nWe've slowly added a deal or two a year and have started raising capital for our last few deals. My partner runs the brokerage side still and I run our investment/management side. We are still small time with just around 200 units but looking to continue to grow that portion of the business. \n\nI think if the right deal comes along the sooner the better to buy. At that point we had sold about $400 million in apartments but owning our own deals gave us a stronger understanding of realistic underwriting and better overall sense of how owners look at deals. I'm sure this would translate over to a better understanding in many other real estate related careers.\n\nIt's easy to say I will wait a few years and then I'll be ready. But honestly I have met a lot of people still saying this on the tail end of their careers. Life happens and it never seems like the right time. I'm not saying buy the first thing you see, especially in this crazy market. But some deals you just know are solid when you look at enough of them, don't pass those up. Even if you have to partner with someone. It will be worth it in the long run.", "replies": [], "depth": 1}, {"id": "h09hrs0", "text": "I worked for Yardi, a commercial real estate research company, but I was already an investor and got the job because paying $30k for their software was more than I could afford, but by working there I could use it for free.", "replies": [{"id": "h09qzn3", "text": "You sir are a genius", "replies": [], "depth": 2}], "depth": 1}, {"id": "h09i2o2", "text": "I do and work for a fairly large asset management firm where basically nobody invests in RE.  Same with my first gig at a name brand PE shop portfolio company.  Brokerage and smaller investment shops tend to have a larger portions investing.  I\u2019ve been consistently amazed at how many really smart people who are passionate about the industry have nothing invested in it outside of maybe a REIT tilt.  \n\nLike others said \u2014 lay the groundwork while you are young and have the time.  It only gets harder to find the time.", "replies": [], "depth": 1}, {"id": "h09vkjc", "text": "No. I invest at the fund GP level. Diversification, scale, institutional management.\n\nOver paying for some single family rental that any dumb money joe off the street can bid up is going to be a poor risk adjusted return.", "replies": [], "depth": 1}, {"id": "h0a50im", "text": "I work in REPE for a big firm. I don\u2019t personally invest in real estate outside of my fund; it would be a conflict of interest first off and second off the opportunity cost of my time makes it not worthwhile to get involved with, it better working to increase the value of my promote. \n\nIf you\u2019re young and have the cash go for it though. I don\u2019t know anyone at my shop in my peer group that does it but think there are some young guys who do it.", "replies": [], "depth": 1}, {"id": "h0ap1ai", "text": "I have very little of the commercial real estate knowledge that is usually discussed here. \n\nI do however have experience in fixer-upper as an investment real estate.   \n\nYou're still a student which gives you an in on the market for student housing.   If you can buy a currently liveable house to live in,  and find roommates to cover enough of the mortgage, you can devote your budget to a second, more labor intensive property.  Get it liveable, then rent or sell. Rinse and repeat.  Renters bring equity and cash flow, selling brings investment cash.  Have plans ready for both options.  \n\nWarning: just about every skilled trade is crazy busy, so budget for really long waits.  Don't be afraid to tackle a job yourself, if you've done your research, but let the professionals deal with plumbing and electrical in particular.\n\nDon't cut corners, deal with contractors who pull proper permits and when you find a good contractor,  be willing to be flexible to keep working with them.  A good contractor can always pick and choose their work, your first job with them is as much an audition for you to impress them, as it is the other way around.  \n\nLiving in a project house means you never escape the work,  it will always be there, right in front of you.  You need to determine if that is motivational or depressing to you.  \n\nOthers here will have better advice then me for finding properties and the specific finances, but I will say you sound like you are at a good point to start looking for good opportunities.  Be patient, and grab the right one when it comes.", "replies": [], "depth": 1}, {"id": "h0b0spr", "text": "I\u2019m a commercial RE attorney with my own practice. I invest in CRE as well. It definitely helps my understanding of what clients are facing when I\u2019ve closed on my own warehouses. \n\nConflict of interest is a risk. Plus the time/opportunity cost. At the end of day though it\u2019s fun to invest. It\u2019s a real live strategy game with real returns.", "replies": [], "depth": 1}, {"id": "h0b1z21", "text": "4 years into my career and yes I own 5 properties totaling 9 units. It\u2019s surprising the lack of people who invest in the industry. I enjoy the security of a few thousand a month I net from my properties.", "replies": [], "depth": 1}, {"id": "h0b30qx", "text": "Yes, I am in REPE and do about 1 deal a year on the side. They are small but will eventually replace my salary so I can go full time at it.", "replies": [], "depth": 1}, {"id": "h0bl4ry", "text": "I work CRE brokerage, now own boutique firm.  I view brokerage as the engine generating revenue that is re-invested into r.e. investments.  In larger brokerage or at PE depending on how they view may or may not have that flexibility/latitude.  If you do, to your question, I'd say it'll be good experience, invest early as you have the time now to work on both.  Owning my own brokerage we now have flexibility to scale in the direction we want to take it.  In summary, yes invest, great spot to start, can always use those investments as a jumping off point to your next venture.", "replies": [], "depth": 1}, {"id": "h0e4ofc", "text": "Crazy reading some of these posts. I would think with inside deals/knowledge you would all jump on this.  Personally I was thinking of gaining employment in this field just for the scope.  Currently at 80ish doors but finding it harder to find value add deals.", "replies": [{"id": "h0ud6t9", "text": "I was offered the ability to buy into deals that my firm purchases but with the average cost of our CRE deals being $4-$20mill - i bought in 5% of one building and that ran me $57k. I think the biggest struggle is saving enough capital when you are on a salary to keep buying deals worthy.", "replies": [{"id": "h16w8q0", "text": "Understood - that can be a hurdle for anyone tbh.  As an outsider, I would love to get my hands on these sorts of deals.  I would probably raise the capital amongst my network but I just can't seem to find them anymore.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]