Real estate investment analysts interview may consist of several components depending on the profile of the organization you have applied for. Even the job description of a real estate analyst differs from organization to organization. Real estate developer hires analysts to do mostly development analysis i.e. feasibility study, structuring joint ventures, monitoring development projects for financial performance and preparing teasers for raising debt or private placement.
Real estate analyst role in a private equity firm or in an investment bank will be very different. You may be analyzing REITs or portfolio of income generating real estate assets. You may get involved in underwriting or ABS structuring or real estate fund management.
Nevertheless, the position of a real estate analyst in various type of organization requires almost similar skills set. You need to be good at math and excel; your financial concepts should be clear. Many firm use generic software like Argus but still excel skill is highly regarded in the industry.
In this post we will be covering technical aspect of the interview only and will not touch general HR question like "tell me about yourself".
Components of real estate analyst interview:
Most likely there will be a telephonic interview for screen purposes, and then you will called for a technical interview. HR interview may happen on the same day or you will be called for the HR interview only if you have cleared the technical interview.
Technical interview for real estate analyst may consist of three components - solving a case study, presentation on the case study and the real interview with your future line manager.
You may be asked to solve more than one case study. Case studies can be on any topic depending on the organization's business it can be on feasibility analysis, product pricing, valuation, product mix optimization for a mixed-use development, REIT valuation or calculating NAV of a real estate fund. Generally they provide laptop with Excel / PowerPoint installed. You must try to solve the case and prepare the presentation within the given time frame. It is very critical for the final selection. Try to keep it simple and don't over do it. If the case doesn't require you to do a sensitivity analysis, please don't do. If you can't finish the case and the presentation with the given time, you will not make it to the finals. So use your time efficiently.
During the presentation they may ask same question again and again. Stay calm and don't get irritated, it is just a stress test.
While solving the case be careful in making assumptions. Create a separate sheet in the excel workbook model for data you are assuming. There will tough questions on the assumptions. But believe me, this will be fun. And even if you are not selected you will learn a lot.
10 most asked interview question for real estate analyst
- If a project has zero NPV and the discount rate is 10%; what will be the IRR?
- What is the difference between rental yield and cap rate?
- What are the prevalent area measurement methodologies? Why should you use RICS and not BOMA?
- In mixed-use development how do you allocate the infra cost / land cost / service charge?
- In calculating project IRR should we consider financing cash flow?
- What is the impact of depreciation on the project IRR?
- What are the best / worst performing asset classes in the current market situation? Why one should invest in these assets or why not?
- Walk me through how you analyzed last project you worked on. This question may lead to many others. But it also gives you an opportunity to tell your story.
- How do you calculate the cost of equity?
- If you have to decide a project's merit on the basis of only one performance indicator, what indicator will you choose?
Hope you enjoyed this post on the real estate analyst interview. What do you think, use the comment section below.
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