Real Estate Developer

☛ 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?

Real estate agents get listing agreements in a variety of different ways depending on their markets. A real estate agent in an expensive area of a city such as Manhattan, trying to win the listings of New York's elite, must entertain potential clients with dinners and outings. Other agents might make a name for themselves by adopting online strategies for obtaining listings, building up an invaluable personal network of warm leads, and becoming an expert in a particular area or region.

In order to get listings in the top markets such as Los Angeles, San Francisco, Miami and New York, a real estate agent utilizes a strong network, reputation, the promise of massive marketing to the right people and opulent perks. Real estate agents working on amassing listings in smaller areas that are more affected by economic downturn decrease commissions and utilize the Internet to help attract cash-strapped sellers. Agents also use personal contacts and business networks to create new clients and attract listings.

Real estate is as much about who you know as what you know. Unlike corporate law and public accounting, the technical learning curve for real estate is pretty mild. Particularly on the residential side, stay-at-home parents with limited higher education and work experience have been known to build lucrative real estate careers. The ones able to turn a side career into a strong income tend to share a common trait: They know a lot of people. While commercial real estate tends to require more of a full-time focus, networking matters just as much or more as having specific industry knowledge.

Career changers coming from other fields should use this question as an opportunity to highlight the connections they have made and detail a plan to leverage these connections for real estate leads. If you are a recent graduate, a young professional with limited work experience or you have yet to amass a long list of professional contacts, tell your interviewer how you plan to make connections once you are hired, such as joining networking groups or the chamber of commerce.

If you’re young and going after the equivalent of an analyst or associate position, feel free to talk about other opportunities. Perhaps you want to get an MBA if you don’t have one already, or even a doctorate. Perhaps you want to build on your experience and join a portfolio company. It’s good to have other ideas, but make sure that your position in private equity takes priority. It’s perfectly fine to say, “I don’t know, but I’m eager to find out what kind of opportunities would present themselves if I get the chance to work here.” If you’re older and applying for an experienced associate, VP, or managing director position, the firm isn’t going to want to hear anything other than a commitment to staying and growing with the firm. They’re potentially going to throw a lot of money at you, so reassure them that their return on investment will last a good long while.

Although most real estate agents operate as sole proprietors, it is not the best approach for lawsuit protection and tax reduction. The best business formation is an LLC to operate your business as an agent; your LLC will contract with the broker.

As a sole proprietor, the income is paid to you individually, and you will receive a 1099 — the worst way to take income. Many options minimize taxes with payments made to an LLC rather than payments made to you as a sole proprietor.

An LLC also protects your personal assets from lawsuits. G. Kent Mangelson, a certified financial planner at the American Society of Asset Protection, said an agent’s total asset protection plan must consider three methods of protection: lawsuit protection, strategies for tax reduction and strategies for estate planning.

Social media is a leading way real estate agents in which market themselves and their properties to potential buyers and sellers. Technology has created new ways for consumers to buy properties and for real estate agents to market those properties and themselves. Finding a real estate agent who is able to help you maneuver through financial and legal paperwork is important in order to decrease the stress and mistakes that may come along with trying to buy or sell property. People turn to their computers and the Internet to research every aspect of a sale, from their potential agent to property values and past sales of homes. While traditional avenues of marketing such as direct mailings, newspaper ads and magazine layouts are still utilized, online marketing avenues are necessary to compete in the real estate market.