Exit Ops
What have you seen guys do in CRE to avoid just being a career broker. I currently work at a large shop HFF/JLL/CB. What have you seen guys do once they leave brokerage. Development, Personal Investing etc...
[{"id": "elhy20z", "text": "You pretty much summed it up. Start your own brokerage, become a buyer, lender, manager, developer, etc.", "replies": [], "depth": 1}, {"id": "elhy4u3", "text": "I dont see why you would leave brokerage if you are good. You don have to work nearly as hard to deal with the pains in the ass that a developer does, and I wouldn't personally invest in real estate if I was a broker unless good deals came along. Id put all my money in the markets or investments not correlated to real estate.\n\nDevelopment, finance, and investing is really hard work that takes a long time to really pay off.", "replies": [{"id": "elhzjua", "text": "Most leave brokerages because they see investors building and compounding real wealth while they are just making good money.", "replies": [{"id": "elhzt0r", "text": "I guess as an investor, I wish I had the personality to be a broker. At least in my region, the brokers seem to have a pretty plush life, while I'm constantly stressed out and have everything on the line.", "replies": [{"id": "elijwoa", "text": "I could be wrong, but i feel like brokers need the face value of seeming to live a \"plush life\" maybe they are really living it but brokers always want to seem affluent. Comes along with their outgoing and confident personalities", "replies": [{"id": "elikuii", "text": "Their fees are often higher than the developers/investors, with no risk.", "replies": [{"id": "elilz3c", "text": "You can become a millionaire in sales easier and faster but how many multi-million and billionaires in investment or development compared to sales.", "replies": [{"id": "elinxpe", "text": "Id rather be a millionaire today than one tomorrow. It takes a very long time to make good money as a developer and a very long time to build the war chest, reputation, and balance sheet you need to execute a very profitable deal. \n\nThe grass is always greener but when a market turns, the broker isn't the one stuck with guarantees.", "replies": [{"id": "ell1ajg", "text": "No, they're just out of a job stuck with a car lease they can no longer afford.", "replies": [{"id": "ell1cgn", "text": "Better than the bank coming after your assets?", "replies": [{"id": "elnsbid", "text": "There is no risk without reward. Being an entrepreneur always assumes significantly more risk than being a W2 employee. \n\nThe difference between the two is that if done  successfully, one accumulates assets over time that produce tax sheltered cash and appreciate in value compared to actively working to produce cashflow that you will be paying ordinary income tax on.\n\n The day a broker stops working or get fired their income drops to $0. An investor can sit back and receive checks from assets regardless of working or not. \n\nIf you are not comfortable with risk then stay in a day job and limit your earning and net worth potential. It's really that simple.", "replies": [], "depth": 10}], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}, {"id": "ell17gx", "text": "But it's just a one time fee. For the developer a fee goes into building the machine or is gravy over the rest of the deal. No developer gets rich off their fee. They get rich on the back end waterfall where they get 30,50, 100% of profits after their limited partners are taken out. For many developers or operators they are using all OPM and have none of their own money in the deal. A high co invest would be 5-15% of the equity. \n\nNot to mention buying assets for \"passive\" cash flow that can run them selves via the right systems vs constantly grinding it as a broker always hunting for the next deal because without it you'll starve.", "replies": [{"id": "ellp3k4", "text": "I guess what I'm not articulating well is that there are a lot of people who take the shot at developing real estate that end up bust. Similar to gambling, nobody ever talks about the losses. There are many more successful brokers who end up wealthy than there are developers who end up a billionaire. \n\nNot all exits are good. I am guessing, since we are on Reddit and its probably a younger cohort and its been a 10 year bull market, many here have never experienced the pain of a workout, or an underwater building when you cant make rents or sell your condos, or when the bank takes your property back. The broker still makes a fee repositioning the asset or leasing the vacant building at a reduced rate. The developer? He loses everything.", "replies": [{"id": "elnhucx", "text": "You are absolutely right in that there is no reward without risk. Good developers understand risk and know how to navigate in uncertain times and position themselves to come out in an even better position if the economy collapses. Bad developers ignore or don't understand risk. \n\nThat's also why a lot of operators don't develop and just buy existing assets to remove development risk off the table. You can't create as much value but the risk is greatly reduced especially with the appropriate type of debt instrument and leverage. I know several apartment operators that cleaned up during the GFC. \n\nI know many developers and operators who used to be brokers but are now investors, I don't know any brokers that used to be investors/operators/developers. I also know many brokers who would rather invest.", "replies": [], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "elj0qi7", "text": "I\u2019m an industrial broker now, in the Midwest; but the goal has always been to transition into CRE development eventually, alongside many other things. \n\nAs the username implies, I\u2019d like to classify as the .01%; not stop at the upper middle class.", "replies": [], "depth": 1}]