Leveraged Breakdowns

Learn with Leveraged Breakdowns Eager to learn how to build real estate private equity models? Are you preparing for an upcoming interview? Are you competing for limited REPE roles as a complete outsider, and are looking for an edge against insider candidates? Look no further than Leveraged Breakdowns! We are megafund insiders offering courses and interview guides to boost your performance in the cutthroat REPE interview process. Introduction One of my students recently asked me the four questions below. These center on the recruiting process into real estate private equity firms as it compares to general private equity. The student asking the questions currently works in Investment Banking at a decent shop. If you’re a college student trying to get straight into REPE, this Q&A may be a bit less relevant. Does the recruiting for REPE funds (ex. Brookfield, Starwood, AEW) or RE investing arms of megafunds / institutional investors (ex. Caryle, PGIM RE) follow the same timeline ...

Introduction The work cycle of a real estate private equity investment team is to screen as many investment opportunities as possible. Most investments aren’t worth the time it takes to analyze them, but occasionally a few of them will catch your eye . For those opportunities, you will need to create a real estate private equity model and investment memo. This post will teach you how a real REPE investor would structure the executive summary of such a first-round investment memo. Structure An investment memo typically has three levels to its structure. First, the executive summary . The executive summary should explain the entire investment . It’s like the table of contents for the whole idea, but with sentences instead of page titles. The executive summary should present the investment’s conclusions, not necessarily the entire rationale. The pages after the executive summary will answer the “why” in greater detail, whereas the executive summary should just quickly explain the “...

This is the second part of a conversation I had acting as a real estate private equity guide to an interested student. I figured you guys might find it helpful in addition to the real estate private equity model I generally teach on my website.   Student: Thank you for the tips. I've glanced at it but haven't looked at your website in depth yet. A couple things I want to touch on. When you say "Recruit" do you mean apply? Secondly, where can I start learning about the industry more? I found resources like ULI helpful, but is that it? Such as a REIT Asset Manager? Is it better to get into a giant megaund? Lastly, is the CFA helpful? Have you ever seen it in the industry? Thank you, again. I'm starting to read through all your posts, wow, there is so much value here. I think you should charge $ on your reddit comments.   Lev: Let me break out my responses: By recruit I mean apply, network, call, anything toward getting a job To learn about REPE, loo...

Introduction This article focuses on how you should personally prepare for real estate private equity interview questions. Most students will just download a guide and memorize responses to questions. But this practice does not develop a strong mental model. In fact, interviews exist to probe your understanding. Your interviewer’s job is to hit you from every angle to expose your weaknesses. If your only defense is a rote understanding of common interview questions, then you will not hold up against a seasoned interviewer. So, what can you do to best develop true understanding ahead of your interview? Always practice for interviews by speaking out loud When preparing for real estate private equity interview questions , it’s all too easy to allow your brain to go on auto-pilot. Thus, I always make my mentees practice their interview questions out loud. Yes, it probably feels uncomfortable to speak out loud when you are alone. But get over it. Preparing for interviews by speaki...

As an REPE analyst, you will build very complex real estate private equity models and be responsible for their accuracy and completeness. Depending on the firm you work for, your model may take into account the tax effects on investment returns. If so, you may want to consider a cost segregation study for property acquisitions. What is a Cost Segregation Study? A cost segregation study is a detailed analysis of a property that breaks down the value of a building into different components in order to apply various GAAP or Tax depreciation schedules. As a quick real estate investment case study, if your firm purchased a stabilized office property for $20,000,000, a cost segregation study might break down that value into several components, as follows: Land Value: $2,500,000 Parking Lot: $500,000 Building Structure: $13,000,000 Heating and Cooling System: $1,500,000 Conveying Systems: $250,000 Tenant Finishes: $2,250,000 Breaking the purchase price down into the different...