Discussion about different skills / upsides / downsides to a career in real estate development vs real estate private equity
Would love any input about these two different career paths. Does development ever lead to exit options in repe or vice versa?
[{"id": "iba2tkw", "text": "Both careers can yield incredible amounts of personal wealth depending on the company and structure of compensation. I personally think more wealth lies in development, but only if you get to participate in the equity or invest. In the end, if you\u2019re a good developer you\u2019ll become a big private equity firm as well. You create value as a developer and as such can dictate some terms. Everybody has money these days so the private equity game is really saturated. Most developers are interested in building their own wealth, and then using other investors money to get into bigger and better markets and projects.", "replies": [{"id": "ibdgdq8", "text": "Thank you!", "replies": [], "depth": 2}], "depth": 1}, {"id": "iba2tnm", "text": "Exit options in these types of roles are a ridiculous concept. Development and REPE ARE the exit options.\n\nThey\u2019re two different career paths - are you more interested in space making and creating something from nothing, and do you want most of your day to be project management? Go development. Are you a finance guy and want to focus on capital allocation and portfolio management of existing properties? Go REPE.\n\nThat being said, REPE is increasingly doing more development, and vice versa dev shops are buying more existing assets. If you are at a top shop in either there\u2019s no reason you can\u2019t make the switch earlier in your career. Late career would be harder.", "replies": [{"id": "ibdgmiy", "text": "Thank you!", "replies": [], "depth": 2}], "depth": 1}, {"id": "ibab10i", "text": "Development will have way more options. The largest difference at high levels of real estate is that they understand the soup to nuts of it. PE is attractive because you get to play with money but looking at things all day on paper versus hands on understanding the most complex and difficult parts of real estate. Let\u2019s say you put in 3-5 year of development work out of college and now you are 25 - 27 have hopefully worked on 100 million to a billion dollars in deals and understand almost all components of designing, buying, and building real estate. It\u2019s a lot easier for you to now go work for any company in a plethora of roles that fit your fancy because you understand the entire life cycle and engineering of these the asset. Some guy that just has been balancing 0s in Excel is useful but will be 20-40% of your skill level", "replies": [{"id": "ibbi1n3", "text": "Yep. This is exactly it. I\u2019ve done both roles, REPE is just playing with money at an institutional level. You\u2019re more in tune with macroeconomic data and trends but for all intents and purposes, it may as well be ibanking or an equivalent financial role. It doesn\u2019t FEEL like real estate. Development definitely does.", "replies": [{"id": "ibdgckd", "text": "Thank you!!", "replies": [], "depth": 3}], "depth": 2}, {"id": "ibdh5vk", "text": "Thank you!", "replies": [], "depth": 2}], "depth": 1}, {"id": "ibadna5", "text": "Development is great it\u2019s about getting experience and then getting in with a team that values you. Many people work for developers and never get wealthy because the developers never give them any equity. It\u2019s really about getting in with the right team.", "replies": [{"id": "ibdgnxn", "text": "Makes a lot of sense. Thank you!", "replies": [], "depth": 2}], "depth": 1}]