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Leveraged Breakdowns

Developing Market Knowledge, Part One: Passion

Introduction to this Series on Developing Market Knowledge

Leveraged Breakdowns helps you prepare for a real estate private equity career path in every way possible. On the technical side, we teach you how to build an extremely detailed asset-level model via Breaking Down REPE. We show you how to tear through a case study in our REPE Starter Kit. What this series will focus on is another critical element when covering real estate private equity for beginners: how to develop market knowledge. If you want to amaze your interviewers, then you must come prepared with deep market knowledge.

First, a Note on Passion

Passion sets you apart from your competition. Ultimately, interviewers want to know how passionate you are about the job. This makes sense when you consider that the bulk of an REPE career is hypothesizing and thinking about real estate. Our models address countless what-if scenarios, trying to suss out the most likely path forward for any particular opportunity. If you aren’t passionate, the work will feel exhausting and tedious. If you are passionate, then your curiosity and drive will propel you to succeed as an investor.

Naturally, we only want to hire people who are going to enjoy the job. You’re likely very passionate since you’re spending your limited free time reading an REPE guide. But how can you convey that passion during an interview setting? Let’s answer that question by taking a look at the telltale signs that investors look for when sniffing out true passion in a candidate.

Knowledge Demonstrates Passion

When judging whether you are passionate about REPE, investors will test your mastery of two broad categories of knowledge. First, they will judge your technical abilities. Technical abilities include building models, understanding accounting, grasping finance essentials, and mastering real estate definitions like NOI, NAV, etc. Leveraged Breakdowns offers many venues to develop this set of knowledge, from free case study challenges to deep-dive courses teaching you to model from complete scratch. Second, investors will test your market knowledge. But what is market knowledge?

What is Market Knowledge?

Market knowledge encompasses what is happening right now in real estate, what has happened before, and what might be a good idea to do next. As an interview candidate, this means you can’t only master the hard technical body of modeling knowledge and expect to succeed. You must also think about real estate as if you have billions of dollars to invest this year. How would you put that money to work?

Comparing Technical and Market Knowledge

When you interview, testing well in your technicals is like knowing basic arithmetic. Nobody is going to hire you for saying 2+2=4, but they certainly will cut you out if you get the answer wrong. Technical knowledge is a baseline requirement, it will never set you apart as an exceptional candidate. What will set you apart as an exceptional candidate is a passionate display of market knowledge.

If you can speak to markets in a nuanced fashion, you will blow your interviewers away. But even if you’re passionate, you may not know where to begin studying markets. Where do you even learn about past investments, current trends, and future speculations? Our next article in this series will give practical advice and direct sources you can reference to develop true market knowledge.

Leveraged Breakdowns Is Here to Guide You

Leveraged Breakdowns teaches real estate private equity for beginners eager to break into this exclusive yet highly rewarding industry. We broke in from non-target schools and have since paved our own way on a successful real estate private equity career path. We remember how frustrating it was to study the industry as complete outsiders – which is why we made resources from our quick-launch REPE Starter Kit to our in-depth modeling course Breaking Down REPE. We give you the tools to succeed, you just have to bring the effort!

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