One of the most common questions we get at Leveraged Breakdowns deals with getting inside the head of the hiring manager during a real estate private equity interview. What are they looking for? What questions will they ask? It is very natural to dwell on the “what” part of the real estate private equity interview process, but it may be most helpful to consider the “why,” and try to understand things from the hiring manager’s perspective.
The 30,000-Foot View
Hiring is a juggling act. On one hand, the hiring manager needs to address both the immediate job opening as well as the future needs of the firm. But on the other hand, he or she needs to assess both hard skills (job related) and soft skills (people related). All of this is happening within the framework of the company’s primary objective: generating positive, outsized returns for investors.
Real Estate Private Equity is a high-stakes, high-pressure business. The hours are often grueling. Your interview will mirror this. To assess your hard skills, you will be given a case study that requires you to build an LBO model on the spot. You will be barraged with questions that will require you to do mental math (“What is the cap rate on a property with NOI of $1,500,000 and an asking price of $15,000,000?”). You will hear terminology used that may be unfamiliar. All of this is aimed at assessing your hard skills: can you do the math correctly (most important) and quickly?
Simultaneously, the interviewer will be assessing your soft skills. How do you react when you don’t know the answer? How do you respond to pressure? Do you give simple “yes” or “no” answers, or do you ramble on? Are you interesting? Do you seem like someone they would enjoy being around 70 hours a week? Do you strike them as someone who will fit in with the existing team? The best thing you can do is be the best version of yourself, and not someone else. Avoid the temptation to try and figure out the “right” answer to these questions.
What we mean is this: know yourself, and present yourself well. 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. 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. 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. And the rest of the team may not be happy, either.
Think About The Future
Hiring managers think about the immediate need as well as the future needs. Hiring is time consuming and expensive. While finding the right person who can meet the immediate job needs (analyst) is paramount, 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 reduces the time spent on real estate private equity interviews and hiring, and preserves the culture.
Why do you care? Expressing 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. Be sure to communicate that you are focused on the job at hand, not just daydreaming about becoming Managing Director. Having direction in your career is appealing to a hiring manager, so long as it doesn’t come across like blind ambition.
Remember that the business you are pursuing is all about generating real estate returns for 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 use the real estate private equity interview process to assess how you will fit into that puzzle. To land your first gig with a real estate private equity firm, try out the free interview simulator quizzes from Leveraged Breakdowns, be yourself, and be awesome!