Leveraged Breakdowns

Introduction Networking calls serve two purposes: reconnaissance and personal branding. And here’s what they aren’t meant for: asking for a job. You’re free to take the bait if they set it, like mentioning opportunities at the firm or asking if you’re going to apply for an internship or a full-time career in real estate private equity at their firm. But let me repeat this - networking calls are for you to learn about the firm and improve your brand, not directly ask to get hired. The topic of being hired will come up when it’s relevant. So on reconnaissance and personal branding, what exactly does that mean? Learn with Leveraged Breakdowns Interested in a career in real estate private equity? Have an upcoming real estate private equity interview case study? Check out all the great resources that Leveraged Breakdowns has to offer . We have a 41-page technical interview guide, ~9 hours of megafund-investor-instructed video courses, and plenty of free resources to get you started. A...

Real estate equity investments are made by anybody with the money to do so. You could be a single individual investing out of a personal LLC, a family office, a multinational corporation, a specifically structured real estate investment trust, or a real estate private equity fund. At leveraged breakdowns, we focus pretty specifically on the real estate private equity funds space. But when you’re bidding on an asset, you’re competing against anybody with the capital to buy whatever you’re interested in. Thus, demand from other investors is a key driver of private equity real estate returns . Macro Influences Real estate equity investment are just as influenced by macroeconomic trends as any other sector. The trend we care most about is returns. Let’s say you have a pension fund that absolutely must hit 8.0% growth per year. If low-risk corporate bonds are yielding about that much, then you’re happy parking your capital there. But if bond yields start to drop, you need to find another...

How does a real estate private equity bid process work? When a company decides to sell itself, or a portfolio of its assets, or something else, how does the process take shape? This post will seek to provide a high-level overview of a common feature of investment-focused real estate private equity jobs : the bid process. No two bid processes are exactly the same, but they’re all quite similar. So first, let’s think of who the seller might be. Public Company Seller First option, the seller could be a public company whose board of directors has decided it is time to search for “strategic alternatives.” Whenever a public company says it is going to search for strategic alternatives, it just means it is trying to sell itself. There are a number of reasons why a company might try to sell itself. Perhaps it has backed itself into a corner with too much leverage. Perhaps it believes the public markets are not valuing it highly enough, and a bidder might take the whole thing out for a nice ...

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 “...

Introduction Leveraged Breakdowns offers the best real estate private equity course . We are megafund insiders who know a thing or two about the investments process. With over $10B of closed acquisitions, we have experience with everything ranging from asset-level purchases to public company take-privates. If you’re looking to understand the real estate private equity game, there is no better place to start than with Leveraged Breakdowns. This post in particular will focus on some core Excel tips to boost your own real estate private equity skills. These are some basic things but are helpful for any beginner to master, especially since you’ll be spending hundreds of hours each month in Excel. Don’t Touch that Mouse! You should learn to model in Excel with every shortcut available. If you have to touch the mouse to do anything, you’re probably doing it wrong. You should be able to navigate excel entirely with your keyboard. Below are some helpful navigational tips, but the list go...

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...

Below is a conversation I recently had with a student, which others might find helpful.   Student: I saw one of your posts on Reddit regarding breaking into REPE and you said you'd be happy to help anyone with questions. So, I decided to take you up on that offer considering a similarity you have with me which is that I come from a non-target (Class of 2018), like you, and have been very interested in REPE. Given you've had great success, I'd like to pick your brain. To start off, I am interested in REPE, development, and deals. I thought that traditional finance was the end-all-be-all as I’m currently in a non-investment role with a Bond AM but have really turned my head onto real estate: the power of leverage, cash-flow, value-add, etc. With that said, I am a CFA lvl 2 candidate trying to produce shine on my resume because that is all that I have to show coming from a small liberal arts school. Do you think this is an absolute waste of time to continue going for...