by Brian DeChesare Comments (34)

How to Overcome a Rescinded Job Offer and Break Into Real Estate Private Equity Anyway

Real Estate Private EquityYou’ve been recruiting for months and months…

And nothing has worked out so far.

But then 1 month before graduation, an investment banking job opens up…

You go through several rounds of interviews…

And you win the offer right as you’re graduating.

Then, 4 days before you start working, you fail your background check, the offer gets rescinded, and you’re back to square one.

Our reader today overcame that “background check failure” and not only won another offer, but eventually made his way into private equity.

And he has (more than) a few words of wisdom on background checks, rescinded offers, and how to break into the real estate industry – from real estate investment banking to commercial real estate to real estate private equity:

The Last-Minute Save – or Disaster?

Q: Let’s start with how you won this last-minute investment banking offer in the first place.

A: Sure. I grew up in a family of doctors, so there was always pressure to go into medicine.

But it never interested me, so I leaned in the business direction instead.

I went to a well-known, but not exactly “target,” university – some banks recruited there, but mostly for regional offices.

My major was unrelated to finance, so most of my knowledge came from joining IB and other finance / investment groups on campus.

I recruited for everything from prop trading to real estate to corporate finance, but I won 0 job offers until an off-cycle IB job opened up in April.

It was a capital markets role in a real estate investment banking group, and I got the interview because a friend referred me to them.

I went through multiple rounds of interviews and won the offer right as I was graduating – the interviews consisted of many “fit” questions, along with questions testing my knowledge of real estate lingo (cap rates, NOI, etc.).

Q: Yeah, networking can produce good results even when it’s 1-2 months before graduation.

What happened next?

A: Four days before my start date, my offer was rescinded.

It happened because of a misdemeanor I had been charged with 4 years ago; it was minor and it had been expunged from my record, but that didn’t matter.

Q: Wow. And you didn’t know about this at all before accepting the offer?

A: I was caught off-guard because I assumed that an expunged misdemeanor would not matter.

But at large banks, they are very stringent and they can reject you or rescind an offer for almost anything.

It doesn’t matter whether the charge has been expunged from your records or dismissed from the courts – even something like writing a bounced check could be a red flag in their eyes.

My advice is to seek legal counsel and avoid asking anonymous people online what to do. No one except a qualified legal professional can advise you on the specifics.

After you win an offer from a group, you should let them know about any “red flags” in your background and any previous charges, even if they’ve been expunged or dismissed.

You don’t want to tell them late in the on-boarding process after you’ve already filled out all the forms, but you also don’t want to tell them when you first start interviewing because it could kill your chances.

Bulge bracket banks tend to be very strict about background checks due to compliance and HR policies, but smaller firms and non-banks will not care as much about these issues.

Q: Is there anything else you can do to win offers in the face of strict background checks?

A: In the US, you can get a section 19 waiver from the FDIC. I didn’t know about this option at the time, but I wish I had.

This is a “can’t say no” waiver that you can present to large banks if you have expunged items on your record that still show up in a background check.

If you contact the person in your regional office and then send proof of expungement and the other information they request, they may be able to issue this waiver to you.

There are a few caveats:

  • The waiver can be issued very quickly… or it can turn into a long, drawn-out 6-month process.
  • There are requirements on the number of years that must have passed since the offense, and what your original penalty was.
  • It does not help with all offenses – for example, the waiver covers breach of trust, misdemeanor, and theft, but it does NOT cover perjury.
  • I’m not sure if this is valid for the series licenses (Series 7, 79, etc.) or for FINRA requirements.

Bottom-Line: The Section 19 waiver won’t always “work,” but it is worth looking into. Banks can rescind your offer for any reason, but this waiver may help you in some cases.

NOTE: To be clear, this site does NOT give “legal advice.”

Please consult an attorney or other legal professional before you apply for this waiver, and ask them about specific requirements and the waiver’s applicability to your own situation.

Into Commercial Real Estate

Q: So what was your next move after this rescinded offer?

A: I tried to get some people in the group to fight for me, but they had no power to override global HR/compliance policies.

I was still interested in real estate, so I decided to go for commercial real estate / brokerage roles.

It was a “hot” area in the city I lived in at the time, and I figured that I could network my way in since it’s a local industry and everyone knows each other.

I worked a few part-time jobs to pay the bills, and on the side I did a lot of real estate-related self-education: I took classes to get my broker’s license, I learned ARGUS and received a certification for that, and I joined groups like the Young Real Estate Professionals.

I focused on firms that did land assemblage (securing land and getting it under contract) and tenant representation because I thought it would be easier to win offers there.

Through the industry groups I joined, I met someone who had been in CRE for over 20 years and had started his own boutique firm a few years ago.

So I reached out to him and he introduced me to other people at his firm, which led to interviews there.

Q: I’m assuming they cared less about expunged charges on your record.

A: Yes! The interview process was almost 100% “fit,” and they assessed whether or not I could get up to speed quickly on tools like GIS for finding tax and parcel information.

Much of the role was “business development,” so they also assessed how well I could generate and prioritize leads, follow-up with them, and so on.

This firm still did a background check, but my legal issue did not come up this time.

Larger brokerage firms might care about those issues, so your mileage may vary.

Q: Right. So what was this new role like?

A: In some ways, it was similar to an IB analyst role: the senior broker at the firm drove most of the business, and I stayed in the office creating the equivalent of pitch books, writing proposals and memos, working with clients, and responding to inquiries on listings.

At a tiny firm like this, the job was even more of a “jack of all trades” role.

Small teams in CRE typically focus on one property type (multi-family, office, industrial, etc.), and this team also focused on one specific sector.

Q: But you ended up leaving.

Was that because you still wanted to do IB/PE?

Or because of the compensation?

Or the industry itself?

A: A bit of all of those. I’ll talk about compensation first:

As a first-year CRE analyst at a small firm like this, your base salary might be 50% of what you make in a 1st year investment banking analyst role.

If you’re a broker, you’ll often get a “draw” (sometimes $30-40K) and you’ll have to earn at least that much in commissions before you can earn above that amount.

Once you earn your draw in commissions, the firm may split additional commissions with you 50/50 up to a certain amount (sometimes in the low hundreds of thousands USD), and you may get increased percentages after that.

So it’s highly variable and comes down to your performance.

If you’re really good you could make more than a 1st year IB analyst, though most people do not do that well initially; seasoned brokers can definitely earn in the mid-to-high six-figures range (or even higher), though.

Although CRE brokerage is known for the commissioned roles, the trend is actually toward salaried positions. At my firm, only the senior broker’s pay was commission-based.

At larger firms (CBRE, Jones Lang LaSalle, Colliers International, etc.), there is more hierarchy and you’ll see Senior Brokers (similar to SVPs), Junior Brokers (similar to VPs), and then Analysts and administrative staff – so there may be more structure to the compensation as well.

Bottom-line: in most cases you will earn less in CRE brokerage until you’re established, you’re in a broker position, and you have a lot of new business coming in.

Q: So the pay was lower, but what about the industry itself?

Do you think it will still exist in the future, or will the Internet displace it?

A: I think there will definitely be consolidation.

Brokers used to hold all the information on properties and potential buyers/sellers, but start-ups like 42Floors are now making this information publicly available.

And then beyond tech start-ups, there’s also more competition from other brokerage firms.

I don’t think CRE brokerage will disappear completely because some deals always require more of a human touch, but it won’t be a growth industry going forward.

Into Real Estate Private Equity

Q: So you wanted to move into IB/PE roles, you wanted better compensation, and you weren’t confident of the long-term prospects for the brokerage industry.

What did you do next?

A: Back when I was networking for my first CRE role, I met A LOT of different people in all the industry groups and events I joined.

I ran into a recruiter at one of those events, we touched base every so often, and he passed my name onto a contact at a firm that did real estate loan underwriting and real estate private equity.

They liked my resume, and they figured I could pick up the RE PE investing process quickly since I already had real estate experience.

It appealed to me because of the “cradle to grave” mentality: you own the property for years, and you do everything possible to improve it and get a better selling price in the future.

In brokerage, you do the transaction once and then you’re done – so it was harder for me to get enthusiastic about deals there.

Q: So what was the interview process like?

A: The first round was mostly “fit” questions – walking through my resume, why real estate, and the strengths/weaknesses, teamwork, and leadership questions in your interview guide.

Your Real Estate Financial Modeling course also helped a lot with learning the ropes.

I spoke with the Director of Acquisitions, three other Directors, the CEO, and their Legal Counsel…

…And then they caught my completely off-guard with an ARGUS case study.

If you’re not familiar with it, ARGUS is a program commonly used in real estate that lets you value properties with a DCF-like analysis.

I had taken a class on it and passed the exam back when I was doing my real estate self-study; I later found out that this firm interviewed me partially because I listed ARGUS on my resume.

But I hadn’t use the program in over a year, so I had to give myself a refresher crash course on it when they told me about the case study.

Q: So what was this case study like?

A: A few days after the first round of interviews, they invited me back in and set up a laptop and a stack of papers for me in a conference room.

They gave me 3 years of operating statements for an office complex, along with a “rent roll” (which shows all the tenants, their lease types, renewal dates, and so on), and asked me to create financial projections for the property and make them look as similar as possible to the historical statements.

The goal was to estimate the Cap Rate for Class A office properties in a certain region, based on the operating statements and data on recent sales in the area.

I only had 90 minutes for the exercise, so knowing the ARGUS keyboard shortcuts was essential.

Q: So you finished on-time, and then won the offer?

A: No!

I finished on-time, but I didn’t know how to enter quite a few line items into ARGUS.

The standard ARGUS classes don’t teach you how to model everything that you see in real life for properties.

So when I finished I told them, “I wasn’t sure about items A, B, and C – if it’s possible, I would like to take this case study home over the weekend and figure out the correct treatment, and then show you the final version once I have it.”

I did that, took it home, and started working on it over the weekend…

And then they called me on Saturday and gave me the offer instead!

They were confident that I knew enough to figure out the rest, and they liked how I had taken the initiative to get all the answers.

Oh, and being reachable on the weekend helped.

Q: Sounds like it!

Just to be clear on ARGUS: do all real estate investment firms actually use it?

I’ve heard mixed reports.

A: It is more common for office developments; you don’t use it as frequently for multi-family properties.

Different people also use it differently.

For example, many firms use it to generate cash flow figures, but then use their own Excel models for other tasks such as modeling IRR, debt repayments, and distributions to different investor classes.

So the usefulness of ARGUS varies by the firm you’re interviewing at.

If you’re determined to be in real estate, it’s good to learn but it won’t always be a “make-or-break” factor.

Q: Great.

And what has the job been like so far? I realize you started relatively recently.

A: I haven’t been there very long yet, but a few early impressions:

I go in around 9 AM and the average day is about 12 hours; we own a lot of assets in the western part of the US but are based in the east, so we aim to be there early in the day Pacific Time.

We only have 5-6 people total, but we might hire someone else in the next few months. The workplace is fairly laid-back, but fire drills definitely happen when a deal heats up.

The work itself is varied: I might do everything from updating ARGUS model assumptions to crunching the numbers on new tenants and tenant renewals to helping the firm sell its older properties (“the legacy portfolio”). Cross-checking broker “opinions of value” also takes up time.

The compensation structure is interesting because eventually I’ll be able to invest my own equity in deals.

So it’s like traditional “carry” at PE and VC firms, but even junior-level employees at the firm can participate (after they’ve worked here long enough).

I’m pleased so far, and I plan to stay here for at least another 3-4 years.

As long as the role keeps evolving, I’ll stay interested in it – they’ve already mentioned that I may do more deal sourcing or more equity/debt financing work as the firm grows.

Q: Awesome. Thanks for your time!

A: My pleasure.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. Hi Brian, I read so many articles on this website about networking to get into PE (in my case REPE). While in reality, the results are not so promising for me. I am based in Hong Kong and have ~4 years experience in developer+real estate consultancy (only 1 yr about real estate acquisition),and I didn’t study finance related in uni so I basically learn by myself and sign up for online courses for financial modeling. I did send several cold emails and also I was told HK is a small market and easy to network. But the respond rate is not very high and even for ppl who do reply, they gave me some insights but would tell me there was no opening suitable for you (pretty much what they meant). Is there something I did wrong? How can I improve it? Thanks a lot.

    1. I think you have to be more aggressive with cold emailing people and maybe look at a bigger market for REPE… most markets outside the U.S. are relatively small because different entities tend to be more active in real estate there.

  2. Hi Brian, thanks for putting together such an informative piece. I’ll be attending a top MBA program in the fall coming in from a real estate investment banking background. I hope to move into real estate private equity. I have only spoken thus far to people in traditional private equity backgrounds and everything I’ve heard is that it is extremely difficult / near impossible to break into post MBA private equity without pre-MBA PE experience. I was wondering what your thoughts were on this, whether this applies to Real Estate private equity as well, and what some steps are that someone in my position could take to make this move? Thanks in advance

    1. Thanks! Yes, it’s generally very difficult to get into PE post-MBA without pre-MBA PE experience.

      It may not apply quite as readily to real estate private equity, though, because it’s a more specialized industry.

      Your best bet, by far, is to get a pre-MBA internship at some type of small investing firm (whether it’s in real estate or anything else). There are some tips here:

  3. Brian, great piece as always. Had a question for you about my situation. I am a third year analyst in the M&A group of a bulge bracket bank who has recently been promoted to Associate (effective mid-year). Much of my experience thus far has been in Real Estate and I lateraled in from the Real Estate group of a smaller bank earlier.

    I am interested in Real Estate Private Equity and was wondering how the recruiting process would differ for an experienced analyst vs. a junior analyst (especially one who has moved around different shops) and how would I begin my recruitment process (although we have had guys in the group move to PE, none have moved to Real Estate PE in the past. Is the sourcing process different?)

    Thanks for the help

    1. Thanks! I don’t think the process would be too much different – you still start by reaching out and networking with anyone you can find in a REPE group and seeing if you can get intro’s to headhunters who recruit for those groups and go from there. It’s still similar to the normal PE recruiting process. The main difference is the case studies and technical tests will be different (see our coverage of RE PE on the site), but you should be able to handle them if you’ve worked in real estate for many years.

  4. Do you have any commentary on moving from a non-real estate IB group to real estate PE?

    1. It is tough and you’ll need to learn a lot about real estate on your own. Do-able and slightly easier than something like FIG to non-FIG, but it will still involve a lot of learning on your own outside of work. You should also realize that you are pigeonholing yourself if you do it, so only make that move if you *really* want to do real estate for the long term.

      1. Thanks Brian, tough decision indeed. Any other moves you would advise to slowly make it over to commercial development?

        1. Just start networking, join real estate industry groups, learn the real estate finance side on your own, take a class on ARGUS or learn it on your own, and maybe try to do some real estate investing or side projects on your own.

  5. I got an IB SA offer at a BB. the GPA requirement is a 3.2, but I have a 3.16. I said I had a 3.2 on my resume, which was correct until last semester. My major GPA is >3.2.

    I am worried that my offer will get rescinded. Am I freaking out or should I be worried?

    1. You’re freaking out. It should be fine.

  6. Hi,

    Hope you are all well. Does anyone know what are the top business schools for anyone looking to break into Real Estate private equity? Which business schools do most real estate private equity firms recruit? Thank you all for your help.

    1. Avatar
      M&I - Nicole

      I am not 100% sure but I’d imagine UPenn, Stern and Columbia would be a few

    2. West Coast – USC, UC-Berkeley

      Midwest – UW-Madison, Northwestern

      East Coast – Penn, NYE

      South – Georgia, Florida

      1. Any thoughts on MBA vs. Masters in Real Estate for breaking into Real Estate Private Equity?

        1. Avatar
          M&I - Nicole

          I’d say a Masters in RE is probably best if RE is what you’re set on.

  7. Hi, great article. Question please, how valuable is a top MBA specializing in Real Estate for breaking into RE private equity? Would a CFA coupled with heavy networking be just as valuable? My background is more on the Operations/Trading side at a bulge bracket.

    1. Avatar
      M&I - Nicole

      I don’t think CFA is as valuable as a top MBA for PE.

  8. Thank you for this post. I just want to know, if possible, what kind of misdemeanor
    was the interviewee charged for?

    My problem is that I have an expunged misdemeanor in underage drinking back in freshman year. In another forum that I read, people said that financial firms and FINRA care more about misdemeanor(even expunged) that has to do with money and dishonesty.

    Would an expunged underage drinking be a red flag?

    1. I actually don’t know that because he didn’t mention it to me when we spoke. I’m not qualified to give legal advice, but yes, it may be the case that certain misdemeanors matter more or less than others – I would strongly recommend asking a lawyer to be sure, though, as you can’t rely on online advice from random people (including me).

  9. Hi,

    I’m currently a rising junior and have been interning at a commercial real estate investment firm- doing private equity, underwriting for deals, etc. I have on-campus recruiting coming up in a couple of months, and I really want to make the switch from commercial real estate to investment banking m&a. I don’t have previous internship experience in m&a, but I always read about related deals and would love to explore that field. I would greatly appreciate it if you can share any advice on how to professionally spin my resume so that the switch from commercial real estate to m&a is well-played and doesn’t seem random. Thanks!

    1. Avatar
      M&I - Nicole

      I’d focus on deals you’ve done and valuation work that you’ve worked on. Not likely to be too relevant unless you’re going to a real estate group.

  10. Hey Brian, been a man on a mission with banks here in Nigeria. Cold calling doesn’t work that well and coming up with bankers’ contacts is quite challenging. I’m undeterred though, I have a few possibles that are looking good. Fingers crossed! I’ve recently come across the email address of a most senior official at a Bulge Bracket firm’s IB division. I’m not quite sure how to proceed, especially since he’s based abroad. I wanna make a good first impression (via my email) in the hopes of landing an offer in the not too distant future. PLS HELP!!!

    1. Avatar
      M&I - Nicole

      I think it can be difficult to make a good impression via email. If you check out our networking toolkit you’ll see a template on cold calling in there.

      1. Thanks Nicole. Seeing as I intend to reach him personalIy and don’t have a number to call, I’m afraid cold calling won’t be an option. How do I go about emailing him?

        1. Avatar
          M&I - Nicole

          I’d introduce yourself and tell him your interest in joining his firm. As I’ve said, for the exact template you can see it in our course here:

  11. Brian, I am on a very similar career path as your interviewee above. It would be great to hear more about how he leveraged the brokerage position into a PE position. I have struggled to make the correlation to prospective employers. If there is a way to reach out to him, I’d really appreciate it. Thanks.

    1. Thanks – I’ve contacted the interviewee to ask about this.

      1. Great, thanks Brian. Could be a stretch but it sounds like he could have been at the same brokerage firm that I’m at now. Would be great to speak with him.

  12. Would it be possible to contact you privately? I am in a very similar position as you and have a few additional questions that I was hoping you could help me with in terms of guidance

    1. I’ll reach out to the interviewee and ask.

  13. Wow this story is crazy, I’m not to familiar with the legal terms in the US. However does dismissal mean that you have been accused for e.g. a felony, but the prosecutor decided to dismiss the case e.g. due to a lack of evidence? So by no means you have ever been convicted or found guilty, but you won’t pass an IB background check? Can you tell if this is a global procedure, that also applies to the recruiting process in Europe (considering dismissals in the States?)

    1. I actually have no idea how it works in Europe (maybe someone else in the know can help out with this one?).

      Background checks are done at most large banks regardless of the region, but the specifics of what they look for differs in different places… so it may be less of an issue (or more?) in Europe.

      Yes, dismissal means that it could still show up on your record but nothing ever happened officially. Large banks are paranoid about compliance, so even something small like that could cause issues in background checks.

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