What Do Real Estate Private Equity Firms Look For In New Hires?
One of the most frequent questions we get at Leveraged Breakdowns deals with understanding the mindset of the hiring manager at real estate private equity firms. What are they looking for? What questions will they ask? It is very natural to obsess on these questions from your own perspective, but it may be most helpful to look at things from his or her perspective.
Hiring is always a balancing act. On one hand, the hiring manager needs to assess both hard skills (job related) and soft skills (people related), but on the other hand he or she needs to address both the immediate job opening as well as the future needs of the firm. All of this is happening within the context of company’s prime objective: generating positive, out sized private equity real estate returns for investors.
The View From 30,000 Feet
Hiring is always a balancing act. On one hand, the hiring manager needs to assess both hard skills (job related) and soft skills (people related), but on the other hand he or she needs to address both the immediate job opening as well as the future needs of the firm. All of this is happening within the context of company’s prime objective: generating positive, out sized private equity real estate returns for investors.
Skills
Real Estate Private Equity is a high-pressure, high-stakes business. The hours can be grueling. Your interview will likely mirror this. To assess your hard skills, you will be given a case study that requires you to build a real estate LBO model on the spot. You will be peppered with questions that will require you to do mental math (“What is the cap rate on a property with NOI of $1,800,000 and an asking price of $20,000,000?”). You will have terminology used that you may not be familiar with. All of this is aimed at assessing your hard skills. Can you do the math accurately (most important) and quickly?
In addition to the hard skills, the interviewer will also be assessing your soft skills. How do you respond to pressure? How do you react when you don’t know the answer? Are you interesting? Do you ramble on with your answers? Do you give simple “yes” or “no” answers? Do you seem like someone they would enjoy being around 70 hours a week? Do you seem like you will fit in with the existing team? Avoid the temptation to try and figure out the “right” answer to these questions. The best thing you can do is be the best version of yourself, and not someone else.
What we mean is this: know yourself, and present yourself well. If you tend to ramble on when you get nervous, don’t try to be someone who only gives “yes” or “no” answers to compensate. Be yourself, but cut off your answers sooner than feels comfortable. Decide in advance if you’re going to BS your way through questions that you don’t know the answer to, or if you’re going to admit that you don’t know, and how to frame that in a positive way. Remember that the hiring manager is building a team, and you have no idea what that team looks like, or if you will fit. You need to represent yourself honestly so she or he can make the decision if you will fit. If you act as someone else during the interview, the real you probably isn’t going to be happy in the job later on.
What we mean is this: know yourself, and present yourself well. If you tend to ramble on when you get nervous, don’t try to be someone who only gives “yes” or “no” answers to compensate. Be yourself, but cut off your answers sooner than feels comfortable. Decide in advance if you’re going to BS your way through questions that you don’t know the answer to, or if you’re going to admit that you don’t know, and how to frame that in a positive way. Remember that the hiring manager is building a team, and you have no idea what that team looks like, or if you will fit. You need to represent yourself honestly so she or he can make the decision if you will fit. If you act as someone else during the interview, the real you probably isn’t going to be happy in the job later on.
Think About The Future
Hiring managers are always thinking about the immediate need as well as the future needs. Hiring is time consuming, therefore very expensive. Finding the right person who can meet the immediate job needs (analyst) is paramount, but finding someone who can grow with the organization over time is very much a factor as well. Growing talent internally is much more cost effective because it preserves the culture and reduces time spent on interviews and hiring.
What does this mean for you? Stating that you are interested in growing with the company is a pat response. Knowing ahead of time which jobs you may be interested in for the future is a more impressive approach. Just be sure to communicate that you are focused on the job at hand, not daydreaming about becoming Managing Director. Having direction in your career is appealing to a hiring manager, so long as it doesn’t come off like blind ambition.
Remember that the business you are pursuing is all about generating private equity real estate returns to investors. Your job is one of many that contribute to accomplishing that goal. You have a specific job to do, and others rely on your performance in order to do their specific job. You are a piece of a larger puzzle, and hiring managers are trying to assess how you will fit into that larger puzzle. To land your first gig with a real estate private equity firms, be yourself, and be awesome!
Remember that the business you are pursuing is all about generating private equity real estate returns to investors. Your job is one of many that contribute to accomplishing that goal. You have a specific job to do, and others rely on your performance in order to do their specific job. You are a piece of a larger puzzle, and hiring managers are trying to assess how you will fit into that larger puzzle. To land your first gig with a real estate private equity firms, be yourself, and be awesome!
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