Real Estate Developer Interview Preparation Guide

Real estate agents, both seasoned and new, need consistent training and continuing education to stay up to date with the current laws and best practices in the industry.

Mentorship programs coupled with an extensive new agent training series is the best way to provide a well-rounded education.

Mentors can teach new agents real-world scenarios including the do’s and don’ts of the industry. The legal minefield is ever-changing, and agents need to understand the best practices, including training, to keep mistakes minimal and litigation at bay.

Independent contractor agreements are crucial. Make sure it’s in writing, and read the entire agreement before signing it. If necessary, seek legal counsel to ensure your bargaining power is nearly equal in strength and your interests are protected.

There’s a lot to consider when looking for a brokerage. These questions will help you find the brokerage that best fits your needs.

If you invest in real estate, you are actually purchasing a tangible, physical land or property. Investing in stocks is entirely different; if you purchase shares of a business, you are buying a claim to a piece of the company itself.

The risks associated with each investment type differ. When you own real estate, you incur maintenance costs, capital costs, taxes and maybe development costs each month. That said, the values of physical assets are less likely to become worthless than stocks.

This goes to the very core of what it means to work for a private equity firm. You should be able to walk into an interview with four to five solid examples of how your actions directly saved your previous employers money. This could be from developing operational efficiencies to ferreting out information that helped save money on a M&A deal. Maybe your research helped a company develop a new product line, or your ideas spurred cost savings on benefits. Whatever it is, be prepared to talk frankly and in detail about how you are an agent of value creation.

Another question having to do with your knowledge of current events. There was a point when the industry seemed to be poised for that $100 billion LBO deal. That may no longer be the case, at least over the next few years. Do your homework, read up on everything you can, and talk to contacts in the industry. Get a feel for the trends within private equity, and be able to talk intelligently about them.

Another hypothetical, with “company Y” likely a company in the news lately for various and sundry problems. If it’s a company with too much debt and not enough upside, feel free to say you wouldn’t take it. If it’s a company with a decent balance sheet and some operational problems, then talk about what you’d do. Ultimately, you’d have to be up on the news to consider whether there’s an opportunity to create value within the framework of an acquisition.

Building a new business is difficult. Understanding what costs are involved when working under a broker is essential to the viability of your business.

One of the most important elements of the cost structure is the errors and omissions insurance; you want to purchase the proper insurance to protect your assets while maximizing your capital output.

Understand the coverage provided by the brokerage and what further steps are needed to keep your business protected and safe.

This is your business, and you need to know how much cash you will make on a sale. After all, you only eat what you kill in this business; there are no paychecks and no free rides.

Commission splits need to be reasonable and within an industry standard. Know what commission splits other brokers offer as well.

The scope of the deal is the biggest differentiator between residential and commercial real estate. A $1 million transaction is considered a whale for a residential agent. Commercial real estate agents, by contrast, regularly broker transactions in the tens of millions. Presiding over deals this large requires almost a preternatural level of confidence and calm under pressure. Anyone can claim to possess these traits, but a proven track record of closing big deals provides proof you have what it takes to get it done.

Experienced agents should have no problem with this question. If you are newly trying to break into the business, you can still create a positive impression with your answer. Rather than evading the question, acknowledge that you are new to the field and have yet to close a big real estate deal. Next, highlight a big transaction you closed at a previous sales job or a major project you oversaw to completion that required a cool head under pressure.

This is another opportunity to talk about things you’ve done to help create value. It can be an investment you identified or a trend you spotted, or any of the things mentioned above. But make it a good one, and make it relevant to the private equity firm’s goals.