How to Master a Career in Real Estate Investments

The Skinny:

A career in real estate investments is a rewarding and enjoyable one. At a traditional firm (private equity, REITs, funds, or other owner / operators), there are three major levels / hurdles / stages. If you master all three, it is pretty much impossible not to be successful. The three stages are Analysis (becoming a numbers guru), Execution (becoming a deal guru), and Sourcing (becoming a “rainmaker”). Your main drive should be to master each stage while preparing to move on to next one and to constantly seek out ways to improve and develop your own unique investment philosophy.

 

The Levels:

1. ANALYSIS

2. EXECUTION

3. SOURCING

 

The First Stage – Analysis

 

This is the starting line, where you start from pretty much zero. Typically all you will have under your belt are your basic concepts from your college real estate courses, an internship, maybe a book or two, and the technical skills required to get yourself through the interview process and into your inaugural role. Note that getting your foot in the door is no small feat and if you get there, you should be very proud and excited as you have chosen an awesome and very likely profitable profession. Tips on how to get your foot in the door are covered here.

This stage is all about gaining an absolute command of the fundamentals and becoming a supremely capable and reliable numbers person.

Understanding the real estate principles and being sharp with numbers are prerequisites for success. An appropriate analogy is that you are learning a new language and you want to become fluent as quickly as possible. Once you are fluent, you are able to stop worrying about translating words and sentences and can start to really understand and think about them in a more critical and meaningful way.

Most of this stage occurs when you are an “Analyst” or some comparable entry-level title, but it also extends into the first promotion, typically “Senior Analyst” or “Associate”. It is imperative that this stage is taken seriously as it can really set you apart when you make the jump in your firm or your next chapter.

HOW TO MASTER THE ANALYSIS STAGE:

Put in the Hours – this is a point in your life where all you really have to offer is your time and work ethic. It is not the time to give the minimum or try and coast like many did in 2022 with the whole “quiet quitting” trend. While you may be naturally busy if your shop is active and has a small team, it is also a great ROI to simply work longer hours anyways. Arrive early and stay late. Your superiors will notice and should appreciate and respect your commitment and work ethic.

If you have just rolled your eyes and want to argue about the importance of work-life balance, then this path or any rigorous finance path is not for you. You have just become a real adult and do not know what a work-life balance even is. The whole purpose of putting in a lot of hours now is to gain as much experience as you can so that you can set yourself up to never have to work such hours later in life, especially because your time will matter a heck of a lot more by then. Investment bankers like to say that their analyst programs are designed to fit “5 years of experience into 2”. I have always liked that concept and think it should extend to any potentially rewarding path. The initial years of working are where your energy levels are the highest and your knowledge is the lowest, so why not use that energy to a good purpose and build an excellent foundation for yourself? While unfortunately many people in these fields become workaholics and do not stop with such hours, most are able to earn the right to a very healthy work-life balance later in life when it matters most.

A bonus to this is that it may keep you out of trouble, personally and financially. If you are focused on getting sharper and being the best you can be at an early stage, you will be less tempted to hit every happy hour or countless other shenanigans that can diminish your drive and lighten your wallet. I recommend reserving the weekends for fun times with the fellas / ladies.

 

Embrace the Grunt Work – it is not a secret that the Analyst and Associate titles really mean “grunt” and “glorified grunt”, respectively. Grunt work comprises all of the things that your superiors have already mastered and/or do not have the time or interest in working on. This typically consists of preparing financial models and PowerPoint decks, joining calls you will not speak on, or perhaps completing some ad hoc tasks that have been on the backburner for a while. While some of this work is inherently unexciting, it is not something to be sulking over, it should be embraced with a smile.

Why? Because every single task you work on is adding to a currently empty toolbox. Whether you are asked to update a model, build a new one, prepare a lease abstract, or scan a loan draw package, each task becomes something you learn and retain. Your experience and frame of reference is a valuable and bespoke body of work. It is all of the little things that add up to make you are formidable and experienced professional, not just the big glamorous ones.

You should be proactively asking how you can be helpful (within reason and with discretion) to your superiors and colleagues and never come across as passive or lazy. I have heard stories from other firms in which Analysts who were not “staffed” or kept busy were observed watching Netflix and TikTok in their cubicles. While I think this is more of a management issue, this should be anathema to you and it can scuttle careers. Again, you may feel a bit like a brown-noser for actively seeking out work, but no one will view it that way if they are real ones. This is your job and if you can learn while helping your team, there is no better win-win

 

Prepare to be Grilled – one of the best things you can do to differentiate yourself is to be quick on your feet and always ready to be grilled. I constantly see younger team members needing to “double check” or “circle back” when questioned about an analysis or other task, especially when asked by a principal or other senior team member. This often stems from only preparing for the immediate answer at hand and not understanding the bigger picture. I was definitely guilty of this. When I was an Analyst, I was called out by my boss because I would prepare excellent work but I was not really going beyond the numbers to think about why I was doing what I was doing. I was too mechanical and robotic. Do not be like this.

Always be much much more than a calculator. Think critically about each task, no matter how small, and distill the big picture first, see the forest for the trees. Assume you will be grilled not only on the immediate questions but also what is behind and related to it. This will force you to think more deeply, get “outside the model”, and to prepare a mental cheat sheet. There is something very confidence boosting and satisfying when you are peppered with questions and you have the answers ready to go. This is a talent that is easily noticed and becomes important as you rise the ranks and interface with senior team members more and more often.

Get Good at Mental Math – in the world today, with smartphones and calculators at our fingertips, actually being good at math is becoming more of a scarcity. This is a negative secular shift and you should go against the grain. Be a Luddite here and always first try to work out the numbers in your head. While you may think it is an inherent talent reserved for brilliant minds, it simply is not. It is very learnable and with proper practice, will become second nature to you. Have you ever been dazzled by that one person who is able to look at the ceiling and run some (seemingly) complicated equations in their head quickly? I know I have, and I wanted to be like them. Although it is not perfectly correlated, I have always associated mental math acumen with intelligence and others definitely do too. Unfortunately, despite enjoying math and calculations, I sucked at mental math. I always froze up and was afraid of being magnitudes off. But, I read this amazing book by this amazing dude and downloaded some training apps and now I am pretty solid at it. I could be way better but I am comfortable enough. The main reason to learn this, aside from the importance of not relying on calculators, is that it forces you to think not only about the actual answer but the big picture (which is obviously something I emphasize). You will develop a great nose for BS if people (*cough brokers*) give you nonsensical numbers or cap rates because you are able to run quick calculations in your head as you think out loud (and declare shenanigans on them if you so choose). This is another very valuable life skill that will serve you well throughout your life.

 

Perfect Your Attention to Detail – at this stage, you are constantly struggling to balance speed with accuracy in your tasks. Of course you always want to be correct but your superiors may get annoyed if you are taking too long and triple checking everything. Although I think it is fairly obvious, you should master the art of not making mistakes first. Mistakes should be anathema to you because you will be viewed as unreliable or careless if it happens often. Instead, you want to instill trust that your numbers are always, ALWAYS solid. Speed comes naturally but proper attention to detail needs to be trained. Learn useful heuristics and build sanity checks into your spreadsheets, while looking for ways to be more efficient and effective. In just a few years, you will be responsible for checking other subordinates work and you need to get really good at spotting errors, so that nothing falls through the cracks. At a prior firm, an analyst’s underwriting was so wrong that they overbid by a property by a ridiculous amount and that individual was ultimately fired. While that is a tough look for the analyst (it was actually only one formula that caused this!) that mistake is actually on the superior. They should have had much better attention to detail! Do not take all day to run a basic pro forma, but you should seek to eliminate sloppiness from everything you do and focus on precision first. The more you do this, the more it becomes second nature, and the faster you will be at doing it.

 

Sharpen Outside of Work – I understand the vibe this post is giving is basically to be an absolute “try hard”, but at this career stage I think that is really how it should be. Sharpening outside of work means to educate yourself with supplemental resources and to build your own tools and models.

There are a ton of great real estate books out there that can bring more perspective than what you may get at work alone. There are also many podcasts, twitter accounts, and newsletters that are invaluable to sharpening your understanding of the field and its concepts. If time permits, always try and be learning from sources outside of your day job and use it to turbocharge your learning. This is most easily accomplished on a commute, on weekends, or right before bed. I know some really successful real estate investors who learned by being passionate and voracious readers of the subject. If you love real estate and are passionate about self-reliance, this will be far from a chore. A classic quote I think of all the time is that “the man who seeks to learn more of his craft shall be richly rewarded!”

The second part of this is really important and something I learned the hard way. Build your own tools and models at home. Your employment contract and/or handbook ethics guide will prohibit you from taking the tools that you built at your job (that you have likely spent hundreds of hours building and/or working on) onto your next position or for personal use. While this is totally fair as it is considered IP, it is still annoying. Therefore you should be building your own original versions on a solo basis. You likely have some version going already as you may have needed to build one for your technical interview / modeling tests, but it is also a very good idea to have a “running” version going that is updated with your latest and greatest ideas and functionality. Note that there is no problem with doing this in reverse and building something at home and using it at work. Build it on your personal computer outside of working hours and you are in the clear.

Everyone in real estate wants to go solo at some point. It is one of the most entrepreneurial businesses there is. Whether it is buying a rental house for side-income every year when your bonus hits, or taking the plunge and starting your own outfit, it is a no-brainer to keep your own set of tools that do not belong to your employer. Self-reliance is a key part of the game. It is also beneficial to build something for yourself from scratch in order to learn every calculation and to motivate you to keep it precise, fast, and aesthetically pleasing for when you are doing your own deals and your investors ask to see the model! Your tools and models are something you should have immense pride and confidence in so do not build something that stays with your employer when you move on.

 

Do Not Be a Specialist – a lot of this post (and site content) is tuned towards acquisitions / transactions since that is my main area of expertise. However, I want to emphasize that you should not neglect the other aspects of the real estate investment lifecycle. The historical bifurcation of acquisitions vs asset management is a subject I feel especially strongly about. These two are often separate teams, which I think is really stupid because they are two sides of the same coin and completely symbiotic. How are you supposed to underwrite effectively if you do not really know how to run a property? Even if you are on the transaction team, do your best to support the asset management team so that you know how properties operate. If you are on the asset management side, ask to ride shotgun on as much as you can during the acquisitions process, even if it is just being a metaphorical fly on the wall. Properly understanding both responsibilities will help you to manage expectations more effectively and will make you a better overall investor. Passing the buck after closing and blindly handing your investment to another team member should not be acceptable you. In my opinion, a true acquisitions person will want to guide their investment throughout the lifecycle in order to make sure the business plan that they prepared is executed to a T. Besides, if your ultimate goal is indeed to run a firm and/or invest on your own, there is no separation. You will have to be an expert on everything, so you are only hurting yourself by being a specialist early on.

 

Ask Questions, but not too Many – when you are first starting out and learning the ropes, it is ok to ask your superiors or more tenured peers questions. What I would caution against is knocking on someone’s door or cubicle every 30 minutes. This is something I have seen in every shop I have worked at. Youngins understandably want to be cautious and do not know a lot, so they will have lots of questions. It is critical to temper the amount of them. Being a productive worker involves getting into a rhythm, but each question can derail that rhythm and you may get on your managers nerves as a result. There are a ton of resources available in real estate nowadays across a plethora of channels. As mentioned earlier, real estate is very entrepreneurial, so you should always be trying to be as self-reliant as possible. Learn what you can about every question to try and get to a solution before asking others. If you cannot solve it and it is not time sensitive, compile a list of questions that you can talk with more knowledgeable folks in one sitting instead of asking piecemeal.

There is a flip side to this. The only thing worse than asking a ton of questions is to “spin your wheels” on important tasks. This means you are stuck, trying hard, but getting nowhere. If you have other things you need to work on and/or this is a time sensitive task, then absolutely ask for help. Very high probability that someone can answer/fix it quickly.

 

HOW TO PREPARE FOR THE NEXT STAGE:

Familiarize Yourself with More Intimidating Concepts – your initial objective is to learn the fundamental principles and key skillsets of real estate investing. This does not mean you can’t starting thinking further ahead. The next stage is execution, which involves deeper financial analysis, a better understanding of assets, deal negotiations, and plenty of legalese. Start familiarizing yourself with (i) how buildings are actually built (ii) what are the major systems and how do they work and (iii) through what actual (legal) processes are they bought and sold. This is where supplemental education comes into play again. You may not have the bandwidth to fully get up to speed in your day to day, but you will be wise to get smart on these concepts early on as it will put you on a faster lane to more responsibilities and pay.

 

Create a Learning List – there will be countless meetings where you will have no idea what the heck is even going on. You might sit in on an OAC meeting with some commercial tenants or join on a call with lawyers who want to discuss the JV agreement on a preferred equity deal your boss is negotiating. There will be a lot of new and esoteric terms you will see and hear. But do not just hear the terms and phrases and zone out about what you are going to get for lunch. Write every new term down and study it later, because these are undoubtedly matters you will be getting familiar with real soon. This “learning list” is something that everyone should have and is ongoing. I still have one because there is still so much I do not know. Always be curious and never be complacent.

 

Find a Mentor – this is a big one and probably the hardest to do. I hate the word “hack” because of all the guff I see on social media, but this really is a hack to expedite your learning and your career. There is a psychological phenomenon that occurs in middle-age called “generativity”, where the focus becomes to teach and nurture the next generation to make an impact. The most valuable thing older folks have is wisdom and they (usually) love to share it, especially when they admire and believe in a pupil. If you are able to find a mentor early on who you vibe really well with, either at your firm or outside of it, you are very fortunate. You will naturally inherit a ton of their own wisdom through simple osmosis and add it to your repertoire, the most valuable of which is their mistakes and how not to repeat them. I found my mentor fairly late at 28 and it has been a huge positive impact on my life. I only wish I found it at a younger age because I know the compounded benefits could have been even greater.

Success at the end of this stage means you have a command of the fundamentals and are the most capable and reliable numbers person on your team. If an important task needs to get done, your team will think of you and no one else if they need it done quickly, accurately, and thoughtfully. Once you are in a position like that, you are ready to move on up.

 

The Middle Stage – Execution

The great news is you have pretty much guaranteed two things for yourself in life (i) A very solid future earnings capacity and (ii) a range of career options. Real Estate is a well-paid career and good talent is becoming more scarce. By working hard and developing your skillset from the prior stage, you have started to make yourself a scarcity and in turn have made your career path more secure and rewarding. The execution phase is where you graduate from just number crunching (though there will still be plenty of that) to actually “running” the deals and having a vastly more meaningful set of responsibilities.

This stage is where you truly develop into a professional, which I would define as being able to complete all major tasks in your job without needing to use or defer to your superiors as a crutch.

There is a lot that goes into executing a deal and you have to truly comprehend each facet in order to be successful. You are going to be relied upon by your principals (and in turn by the investors) to make sure their investments are properly handled. That is a big responsibility. Financial analysis, negotiations, extensive due diligence, and legal structuring are some of the biggest. It is a challenging but very exciting time because you know the skills are critical and will allow you eventually complete deals on your own.

 

HOW TO MASTER THE EXECUTION STAGE:

Remove the Crutches – in the first stage, you are essentially a learner and a facilitator who does not have much direct ownership over anything. Someone is always checking your work and guiding you to make sure you do not mess up in a big way. The execution stage is when you evolve from a facilitator into a leader. You will still have superiors of course, but they should now be trusting you to take on major tasks such as leading an underwriting or running the due diligence on a deal (from LOI signing to closing). You cannot be effective at this stage unless you feel ready to break free from the shackles of your training and are confident and capable in your ability to deliver. The first step is to be brutally honest with yourself and make a list of where you feel weak or less knowledgeable, where you feel you are always deferring to someone else or would be lost leading the topic on your own. For me, I was intimidated early on by the legal aspects of the job, it was totally foreign to me so I spent a lot of my time sharpening my skills there. For you, it might be understanding the physical building and all of its systems (very important) or the different types of debt options that are out there. Spend your time diligently fixing those foibles until you feel strong and self-reliant enough to run everything by yourself without question or doubt. This is the core objective of this stage.

 

Master Your Craft with Enthusiasm – just like carpenters and blacksmiths, you have a craft that you now need to master. Real estate investing is your vocation and you must have the genuine desire to be the very best at it. You should not only seek to sharpen all of your skills, but also be searching for new ways to continually “level up”. Do not ever be complacent no matter what your rank is. If the day job is not teaching you enough on a topic, this is another great time for supplemental studying, even if you are getting paid plenty of money. If you are like me, gaining a healthy addiction to newsletters is not a bad idea if you want to keep a pulse on everything. If there are people you admire and look up to, ask yourself what skills they have that you want to emulate. There are always more levels.

I fully understand that no one can be a true master early on in their careers. But just like in martial arts, black belts have many degrees. Your goal is to earn your first degree black belt so you are confident and capable as you continue to develop. This in turn will allow you to be self-reliant, which is the main objective of this level and which is an incredibly liberating feeling.

 

Embrace the Protege Effect – I have found one of the most powerful ways to learn more and communicate better is to be a “teacher” in the workplace. Depending on your company, you may now have an analyst or perhaps some summer interns. While many definitely view having underlings as a chore or a distraction, I feel strongly that you should take anyone who is interested under your wing. Train them and be their primary resource as they build their own foundation. Why? The Protege Effect is a proven phenomenon that the teacher will work harder to learn something if they know that they have to teach it to someone else. In other words, the teacher is compelled to learn more and in greater depth and breadth. This benefits both parties, but I think it is especially important for the teacher. It opens up the path to become a walking encyclopedia for your vocation while becoming a great resource to the firm and to new workers. Think of all the benefits that brings. By embracing teaching, you will become an expert more efficiently, you will retain knowledge better, and you will become a more valuable resource than someone passive who prefers to sit in the corner hammering excel all day. It sounds funky but basically after you finish your initial learning from stage 1, you should transition into a teacher so that you can learn even more.

 

Study the Law – I believe having a firm grasp of real estate law is critical to executing well. It is also just a very helpful skill to have in your career and in life. Property law has been around for literally 800 years and many of the terms and concepts are the same. The main purpose of the seemingly endless types of legal documents is to (i) memorialize information and (ii) protect yourself from a litany of potential issues. While the language is often old-timey and verbose, the goals really are that simple. Becoming fluent in these documents will make you adept at identifying risks and making sure you and your investors are protected, especially when reviewing key documents like a purchase agreement or a lease. Protecting yourself is pretty darn important in real estate, or in any aspect of life, so it certainly pays to be sharp here.

Although lawyers exist for a reason and should really be the ones ensuring all of this, they frankly miss things and do not have the same incentives or frame of reference as you. You should always be going beyond just the “business items” in order to understand each document fully. Read each “turn” of the documents and follow all of the redlines and the reasons behind them. This will allow you to be an active participant in negotiations and structuring, rather than being passive and deferential. It will also force you to better understand each major decision and improve your memory of its nuances. Not to mention you become very valuable to your team and your general counsel will be extra appreciative to have a second set of capable eyes. You do not have to be a lawyer to have an expert-level understanding of the aspects of the law that pertain to your responsibilities.

 

Assume Capital is Your Own – betting with house money is different than betting with your own hard-earned cash. It is the same situation when it comes to an investment firm and its capital sources. PERE and other funds often receive hundreds of millions of dollars to go and develop or acquire real estate. They get highly attractive fees and profit interests, but often times due to the investment size or structure, do not have a lot of skin in the game themselves. There is nothing initially nefarious about this of course. Investors are simply giving their money to an expert to invest it on their behalf and that should not be free, but it does create some inherent misalignments (if you remember econ / business class, it is the “principal-agent” and/or “moral hazard” problem).

I once asked an industry peer why his firm clearly overpaid for an asset (that we also bid on) that would in all likelihood be a dud on returns at their strike price, and he told me “IBGYBG”. I asked him what that meant and he said “I’ll Be Gone, You’ll Be Gone”. He was only partially joking as this is indeed a real thing. The fees that come from a new $200mm asset could be ~$100k per month in new guaranteed asset management fees. If your headcount has not changed, where do you think that money goes? On a 5 year hold, those fees could be $6mm. Many owners / principals make their real money on fees, not promotes (aka based on size not skill). I know this is a part of the game, but I think it is very important to eschew this mindset as it is a weak one. Instead, assume that every dollar from every capital call is from your own pocket.

You simply cannot have the same level of focus and determination in execution if you do not view the investment as your own money. You may still be salaried with no profit sharing, but that does not matter. The goal is to think 100% as a principal so that down the line when you have a large ownership stake or are running your own company, you view investments on their merits and not just because they exist. An analogy would be you picking food that someone else has to eat. If you choose junk food, they will get sick and unhealthy but nothing happens to you. You should be eating the same as them because if you did, you would choose healthier things. It may not be the best analogy (I am hungry as of the time of this post) but having that mentality will ensure every decision you make is healthy, thoughtful, and in the best interests of those entrusting you with their money.

HOW TO PREPARE FOR THE NEXT STAGE:

Cultivate Relationships and Friendships – this is the most important part of preparing to be successful in the next and final stage. While “developing your network” may sound trite and cliche, it really is the most important thing you can do to stand out in the highest earning phases of your career. Assuming you are sticking to the same markets (and not hopping around to new ones frequently) you will naturally begin to get close with brokers, other owners, and capital sources. Some of these people may transcend the “work friend” tag and become a true lifelong friend. This is a rewarding and enjoyable part of this career. Sure, many of your peers may be interested in you mainly because of your position, portfolio, or capital, but that is expected. Many deals are sourced or won because of the familiarity of the parties involved. I am not kidding with you that you might get a “first look” at a deal because you had some memorable nights bar hopping with the Seller. Even if you are just an Analyst or Associate, the brokers and competitors you hang out with are going to grow into larger roles just like you are, and may be key decision makers in short order. Always be a “yes man” and go to as many events as possible and develop real genuine friendships. It will pay all sorts of dividends in your life and career.

 

Understand Capital Sources and Structures – when you complete this stage, you will likely be very capable at underwriting, deal execution, and asset management. A large part of the final stage is understanding capital sources, investors, and the multitude of structures that are out there. I would highly recommend becoming fluent in the different types of investors (e.g. pension funds, separate accounts, JV’s, HNW, Co-GPs) and structures (common equity, pref equity, mezz, and the many debt options). This will allow you to be ready when looking to attract investors because you can “speak their language” and respond thoughtfully and creatively on how you will best meet their needs based on your offerings.

 

Develop Your Own Investment Thesis – the final stage means you are in some form of a key leadership role, whether as a CIO or Partner, or you have started your own firm. Either way, you will be “eating what you kill” through some form of incentives or profit participation structure. In order to set yourself apart, I highly recommend developing and memorializing your own investment thesis and strategies. You do not add much if you just parrot what your predecessors said or repackage what your competitors are doing. Think originally as to what you believe offers the best risk/reward at the time, and how you specifically plan to capitalize on that. Back it up with data and make sure it is easily understandable to a layman. I always use the Peter Lynch drill when discussing my strategy or my belief in a particular deal. You need to have utmost conviction that your strategy has a high chance of success and one that you would love to provide a significant co-investment with.

Success at the end of this stage means that if you were handed $100mm to invest, you would be completely ready to go off on your own. You know how to properly underwrite and execute transactions, how to operate assets and manage risk, and have developed your own original investment mindset and theses. While you are constantly looking to grow and improve, you are self-reliant and do not need any hand holding.

The Final Stage – Sourcing

This is the final level, a pinnacle of your real estate career and the most lucrative. Analysis and execution are important prerequisites, but they are merely stepping stones. Sourcing is what allows you to make the big bucks and become truly integral. You are finally eating (fees and promotes) what you kill (capital and dealflow) and will no longer be beholden to base salaries and “discretionary” bonuses.

This stage is where you are able to effectively and consistently identify and secure deals, as well as finding and securing the capital (aka fundraising) to acquire them

Can you think of someone more important to a real estate organization than the person who does all that? Now admittedly I have just started to wade into this part of my career and I have a major rule about not pontificating on things I have not experienced firsthand, so this section will be a bit shorter. While I have sourced deals myself and raised a fund with a business partner, I still have much to learn and develop at this exciting stage.

HOW TO MASTER THE SOURCING STAGE:

Be Well-Known and Well-Liked – this is the final outcome of you “planting the seeds” with your network in the previous stage. Every time I meet someone senior who has great deal flow, capital sources, or is simply by all accounts successful, they are almost always very sharp, warm, and likeable individuals. While there are some jerks out there like anything else, projecting a good “vibe” is a very consistent theme I see. This of course makes sense. If you want to raise money and get first looks at deals, you have to be pervasively viewed as trustworthy and reliable. No one is going to give money or go to bat for you in a bidding process if you are a stranger. Referrals and reputations are critical in the real estate game, especially with brokers. No joking, my old firm did not win a deal for a full year from a particular brokerage firm because our principals insulted their leadership team in a totally different market. A Seller may take the second highest bid if they are familiar and trust that buyer and likewise may even ignore bids from untrustworthy ones. You do not need to be a peacock and go to every single networking event to meet people, but you should seek to develop strong, meaningful relationships with key players. The network will then expand organically.

My own favorite experience with this is that a good friend of mine, who rose the ranks with me since we were just lowly analysts, is now slated to be the CIO of a major (friendly) competitor. We have countless memories, rapport, and trust in one another. Do you think we may give the other a heads up on a potential sale and give an off-market first look as a result? Absolutely. I may only have a few of these types of connections at this point in my life, but the guys who kill it at this stage have many situations like this, often cultivated over decades. This is extremely important for fundraising and dealflow. Have impeccable integrity, develop your network, protect your reputation, and be a good person to everyone you meet.

 

Be Confidence Inspiring – there is an incredibly disappointing amount of mediocre GPs / operators out there. How they raised money in the first place, I have no idea. I would say 2/3 of the owners I have worked for are exceptionally average while the remainder were absolute rockstars. You must be the latter. No matter how glossy or compelling your fundraising deck is, investors are really betting on the person and not the strategy. When you speak with someone, you want them to be dazzled and willing to follow you into the trenches. While this may sound abstract, it really is not. Have you ever spoken with someone who afterwards you go “Damn, he/she is super sharp, if they were a stock I’d buy them!” or maybe you have that brilliant (and occasionally a bit nutty) friend who always has some great idea or scheme that you wish you thought of? These are the types of people you should strive to be. You want to be differentiated and instill confidence in anyone who speaks to you about your ideas, so that they feel comfortable and excited at even the prospect of investing with you.

You accomplish this by being highly knowledgeable and experienced (which you should be after the first 2 stages), genuine (not huckstery), and specific (which is so important it has its own section below). If you do not watch the Walker Webcasts, you definitely should because they are interviews with top leaders in the field and you can just tell how sharp some of these folks are. I particularly like this interview with Chris Lee from KKR because it is so palpable that he is very smart, very warm, and highly capable. This is the exact type of vibe you should give off at this stage.

 

Be Specific – this is based on my experience working with two firms who tried to fundraise last year. One firm used a “shotgun” approach, where they claimed to be capable at executing all sorts of strategies, asset classes, and geographies while repackaging marketed deals and blasting them off to 10 different potential investors every time. They raised $0 despite being a fairly large shop. The other firm used a “sniper” approach and offered a highly granular and thoughtful strategy for a specific market and a specific subset of an asset class. They raised $100mm+ despite being a small shop. Who would you rather invest with? While I do believe you can be effective and successful in different strategies or geographies, I also believe that you must have a specific thesis when speaking with potential investors and brokers. No one wants to invest with someone who seems unfocused or insincere. They will feel you are just scrounging for their money to collect AUM fees and will go to someone else with a much more compelling plan.

Two aphorisms here are very apt (i) If you aim nowhere, that is exactly where you will go and (ii) if everything is special, nothing is. A post-it note on my monitor has been with me since I started my career because it is so important and relevant to many aspects of real estate, and that is to “aim small, miss small“. You must have a clear, differentiated, and well-articulated strategy if you want to be taken seriously and maximize your chances of raising money / winning deals, this is what will keep you on top.

Success at the end of this stage means that you are a well-known and trustworthy principal of an owner/operator. You are a go-to buyer for many deals and brokers and competitors alike love to work with you. You have developed genuine friendships cultivated over many years and are a true “rainmaker” for your firm.

 

Summary:

Being successful in real estate investing is not rocket science. Make sure you have a full and ever-growing understanding of numbers and fundamentals, make sure you are fluent and self-reliant in every aspect of the purchase, sale, and management processes, and always be a genuine, original, and confidence-inspiring leader no matter what your title. If you have a have command of these three major skillsets, you will not only have a fun and financially rewarding career, but you will also open countless doors for yourself and be an elite business person with the confidence to do whatever it is you truly love in life.