thinking of switching to real estate. Honest advice?
Hi all,

I am considering a future switch to commercial real estate. I am finishing my master's in cognitive science after planning on pursuing a Ph.D., but I no longer feel like I want to work in this area long-term.

After contemplating careers, I have landed on real estate as a potential option. This is because I have always liked real estate; my father has his own commercial real estate company and has worked in the field for 30 + years and has been extremely successful in the Southern California market. Due to this, I feel like it is wasted potential not to pursue this avenue as he has many networking connections that could give me a leg in the industry.

My question is how important is math in your day-to-day life? I would not say math is my strongest area, and I have no interest in doing an analyst position that requires modeling (too similar to academic research and again it is not my strongest area), but obviously, I am good enough at it to obtain a bachelor's, pass the GRE, and get a master's. Also, Do most people have a burning passion for real estate? I like it but don’t know if I could say it is my passion. But also I don't know if I have a passion that I see as a good fit career-wise.

Any advice?
[{"id": "ip6dlkf", "text": "Not trying to sound like a jerk, but if your father has been doing it for 30+ years, why don\u2019t you ask him?  He will know more then anyone else on this sub.", "replies": [], "depth": 1}, {"id": "ip6g4mn", "text": "Yes... Your family has a successful business. You're in the perfect position to test this out with very little risk. For some it's a job and for others it's a fulfilling career. I think how you feel about it is personal but at the end of the day either type of person can do good work. Math is involved if you're crunching numbers all day at a big firm. If you do development work for your family the math is very simple usually unless they are modeling out complex payment structures.", "replies": [{"id": "ip6u2ls", "text": "I was reading that the main entry-level positions are analysts which do a lot of modeling/etc. I have no interest in doing something like that as it is too similar to a desk /academic research job which I know is not the right fit. My dad does property management, and I find that day-to-day more interesting. I just didn't know if I start from 0 if I have to do something like that", "replies": [{"id": "ip6up2r", "text": "Yeah but modeling doesn't even require there much math. A) the spreadsheet is doing it for you and b) it's a lot more about creating logical arguments then straight algebra. Just takes practice. Understanding how a property actually operates will help you be a better developer. Again, not a ton of math involved.\nAs for starting out, I'd remain humble and understand your new to the field so even if you are doing things you think might be at a \"lower level\"your going to learn because it's all new to you.", "replies": [{"id": "ip7t9bs", "text": "Sorry if I piggyback on this, but can you please expand on how it\u2019s creating logical arguments? Thanks in advanced!", "replies": [{"id": "ip7uf76", "text": "So of course you can use excel to perform algebra. However, each cell in excel is its own object. When you give it a number, that cells value is now represented by that number. Or at least that's a very crude explanation.\n\nSo, when you're building a model, it's less about theat and more so about how you logically thought through the problems.\n\nExample is getting to NOI:\n\nIncome: rent * 12months\nVacancy: income * 5-7% * -1\nExpected rent: income less vacancy\n\nAdmin expenses\nMaintenance expense\n\nNOI is just: expected rent less expenses\n\nThe math you have to do is extremely straightforward. The tricky part is making the whole thing connect and function as a system.", "replies": [{"id": "ip9bwur", "text": "&gt;x\n\nAlso to add to the logical argument piece combined with terms in contracts- you will need to take a contract and show how that impacts a project. For example, if your credit terms with the bank bring you into a cash sweep if you fall below a 1.30x DSCR (NOI/Debt Service = DSCR), you will need to build in functions to demonstrate this. Further, with large/risky projects (think a ground-up hotel development in 2021) you will likely have to fork over some collateral, and this will be released when a certain occupancy or NOI $ amount is reached; therefore, you will need to show a release of that collateral at some point. \n\n&amp;#x200B;\n\nThere are also terms for each tenant so you will need to be able to think logically about how these impact your bottom line.", "replies": [{"id": "ip9ccna", "text": "Thank you. Yes this ^ there's a lot of converting contracts to financial models. Basically giant word problems\n\nEdit: also, the functions built into excel for calculating, say debt service, do the \"math\" for you and are far mor accurate. You just have to know when to use it", "replies": [{"id": "ip9cyw2", "text": "Yep, contracts are the main component of CRE. They flow all the way from the construction agreement, joint operating agreement, tenant agreements, and then to the PSA. Each of these will significantly impact a project's profitability and can be rather complex to model out.\n\n&amp;#x200B;\n\nThat being said, getting into a CRE investment role will be difficult without this modeling experience... Some may call it paying your dues, but you are genuinely learning how to drive value from a formulaic perspective.", "replies": [{"id": "ipagh1a", "text": "I appreciate you taking the time to respond! I am currently a (non-traditional ... I'm 37 years old) undergrad trying to get a philosophy degree. Econ and business econ were too competitive for me. However, I figured it wouldn't hurt me too badly as I have over 10 years of property management experience. I was feeling particularly bummed that I fucked up my future with a philosophy degree instead of pushing through for econ or finance. Then I came across your post about logic, which is something my major focuses on. I am hoping to transition from property management to asset management or acquisitions. Would you have any advice for someone like me? I saw on break into CRE's youtube video that in property management, if you climb the ladder high enough, you eventually become an asset manager, and it's not hard to make a horizontal shift to acquisitions. But he only touched on it briefly.", "replies": [{"id": "ipbwmel", "text": "Don't worry about the lack of econ/finance as long as you are willing to put in the time to learn these components. The real estate field has people with very diverse backgrounds. \n\nTransitioning from property management to asset management will be easier than acquisitions if you don't want to have an analyst job. You can climb the ladder in property management to reach an asset manager- this is a pretty standard path. Property management isn't the most rewarding, but it's much more cut and dry than acquisitions regarding career development. Marketing your skills and framing your experience will be paramount in whatever real estate profession you go into. \n\nTake a look at Linneman's REFAI course. Expensive but very worth it and gives you a great base of institutional knowledge if you're interested in acquisitions and investments. More of an analysis class but you'll need these skills if you want to get into acquisitions", "replies": [], "depth": 10}], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ip6skwl", "text": "Most brokers can barely read, you will be fine. You went to usc?", "replies": [{"id": "ip6u9as", "text": "UCLA for undergrad and a top school in Europe for my master's. I am afraid of not being capable of making such a large switch and succeeding.", "replies": [{"id": "ip7w53u", "text": "The math here is not like algebraic topology, it's pretty simple. You just have to understand terms ( and a lot of them, just made up to sound intelligent) basic high school stuff will do.", "replies": [], "depth": 3}, {"id": "ip9l5ic", "text": "UCLA? Sorry man, not going to cut it I am afraid.", "replies": [], "depth": 3}], "depth": 2}, {"id": "ip94se4", "text": "Idk about that. The brokers my company has engaged have been pretty impressive, especially for D/E placements. Less so for leasing brokers", "replies": [], "depth": 2}], "depth": 1}, {"id": "ip784gz", "text": "I\u2019m facing the same dilemma. Just finished my masters at Yale, I\u2019ve been working in an industry I don\u2019t really enjoy for a few years now but I\u2019m incredibly interested in CRE and development. I have no clue to how to make the switch lol. You at least have an \u201cin\u201d, you should take advantage of it.", "replies": [{"id": "ip7a6of", "text": "What field are you working in now?", "replies": [{"id": "ip7br92", "text": "Data science in insurance, so I\u2019m hoping I\u2019d have a fair bit of transferable finance skill at least.", "replies": [{"id": "ip7jex5", "text": "I think you are more comfortable with numbers than I am. I think your skills would transfer!", "replies": [], "depth": 4}, {"id": "ip7tr8c", "text": "Think about what you like doing and what you're good at and march that skill set with that part of real estate that you enjoy. You can take courses online to learn some of the basics of how properties are underwritten in excel", "replies": [{"id": "ipeirjl", "text": "I appreciate the encouragement! Digging through this sub has been helping a lot, finding tons of helpful resources and constructive conversation regarding breaking in.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ip7a4rb", "text": "If you want to be in the private equity or investment side, math is important. If you want to be on the development side it's not, but you have to understand construction/design. If you want to be in property management it's not really as it's more dealing with tenants, but you will have to provide a p&amp;l every month to the landlord, but that's not rocket science", "replies": [{"id": "ip7j6sd", "text": "what about if I wanted to be a commercial real estate agent? primarily selling properties?", "replies": [{"id": "ip7tkjp", "text": "You still have to know some numbers as you have to come up with property valuations but once you have that down, 95% of it is business development and building relationships. Best way to start is to join a good team.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ip7petn", "text": "Math / Excel is pretty important to calculating returns but your not doing to be doing anything in excess of Algebra.", "replies": [], "depth": 1}, {"id": "ip9uhi0", "text": "Just some general career advice. You don\u2019t become truly passionate about something until you are good at which takes years of doing it. Pick something you kind of like that pays well and the passion will come once you are good at it. \n\nWith that said the most successful people I have met so far in this business their family was involved in it one way or another. Leverage your fathers relationships and you\u2019ll do great. Maybe even sit down with someone he knows to talk about your interest in it.", "replies": [], "depth": 1}, {"id": "ipact2h", "text": "Get your NMLS and finance your fathers deals. Math is important but calculators make life easy. Best of luck", "replies": [], "depth": 1}]