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Leveraged Breakdowns

Become The Most Trusted Real Estate Private Equity Analyst In Your Firm

Much of what you read on this site is focused on hard skills, with the intent of helping you launch your career in REPE. This post will focus on what might be considered a soft skill, but a better term is a character trait. This trait will make you into the most trusted analyst in your real estate private equity firm. This character trait will also establish the trajectory of your RER career. What is this trait? Integrity.

Do I trust the model?

One of the greatest and most subtle temptations you will face as an analyst is to adjust a model to obtain the outcome you really want (or the outcome your boss really wants). The more inputs in a model, the more opportunities you have to manipulate a model. Trim one of the expense line items a little more than is probably realistic. Assume lease-up occurs quicker than what the leasing team projects. Cut CapEx beyond what is prudent. The list is endless, and the pressure is unrelenting.

Resist the temptation. Let the model speak for itself. Be disciplined in understanding the model, and be thorough in gathering data that is input into the model. If you feel pressure to lean a little too hard on an assumption, politely and respectfully push back. It’s your model, and it’s your integrity. Consider the future: if a deal goes bad and someone comes back to the original model, will she or he find assumptions that are clearly unreasonable? How will that reflect on you?

Do I trust the person?

Wall Street has a reputation for being cutthroat. Movies and shows depict real estate developers and investors as money hungry, lying, win-at-all-costs heathens. Is that who you want to be? And do you have to be that bad to ruin your reputation? Or is your reputation more fragile than you realize?

The constant pressure to perform is overwhelming. The temptation to lie is never ending, especially when promotions and bonuses are on the line. Rationalizing bad decisions is a subtle deception to which we can all fall prey. Again, think about the future. Would you be proud if people declined to be a reference for you because they’ve seen you take credit for someone else’s work or stab people in the back? Do you want people to whisper behind your back that you can’t be trusted?

What Kind of Person Do You Want to Be?

It’s natural to become goal oriented and focus on connections, skills, and opportunities to start your career in REPE. But remember: money comes and goes (just watch the stock market!). Jobs come and go. But you will have to get up in the morning and look at yourself in the mirror every day. Integrity will allow you to be proud of the person you are. It will set the tone for your REPE career. And it will create prosperity and stability throughout the entire financial system.

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