CFA worth it for a role in Real Estate Investment?

May 12, 2012 4:42 AM

CFA worth it for a role in Real Estate Investment? I was wondering if the CFA will be useful to me if I want to work in Real Estate Investment – starting probably with a Commercial Brokerage firm in their asset management department, which would involve buying and holding investment properties for their income as well as possible capital appreciation. Ultimately perhaps work for some kind of REIT.

My background is that I have worked for commercial brokers in their valuation departments as well as in their research & development. This mostly involves writing feasibility reports for developers.

In terms of my education I have a Master of Science in Business Management which covers all the topics of an MBA but in a single year. Also a Masters in construction management and real estate development. The latter involved taking an MBA real estate finance class.

My problem at the moment is that when I apply for jobs, companies very rightfully want to put me in the same kind of research writing roles that I’ve done in the past. It would seem to me that I need to show something extra if I want to start on the more financial orientated roles.

For the valuation I don’t think we are talking hugely complex financial anaylsis. Mostly office or residential buildings laid out on excel where you can see the year-to-year income stream and then it’s a matter of getting the formulas correct and entering the appropriate assumption values.

I’m hoping that, if I can first pass level 1 and start applying for jobs, I will have more luck in getting started in the real estate finance side. Is this a feasible strategy or am I wasting my time? (Assuming I pass level 1, I’m not I’d pursue level 2/3 – I’d have to see how the job situation is going and how relevant the other levels are specifically for real estate).

Ultimately, I’d also like to sharpen my finance analysis skills because I want to be able to evaluate potential business ventures as continue to manage a modest collection of investment properties.

(This is a rather long question, but I thought it would be better to include as much info as possible so I can get some more enlightened responses – thanks for reading and hopefully answering!)

posted by web74 to education (6 answers total)

Go for it! I personally think a CFA is most valuable for people like you, who have a skill and experience set highly relevant to an investing discipline but need to demonstrate commitment and (to some extent) aptitude for some of the mechanics of analysis. (It is next-most valuable for those who are already in investing roles buy want to advance, and least useful for those who are just hoping it to qualify them for the entry level with no particular assets in hand.)

I do think that you need to expect to have to get to pass Part II before you would see the benefit; Part I is too common and easy to make an impact. (Also, there are ethical constraints against advertising yourself as a CFA candidate if you stop before you've passed Part IIII.)
posted by MattD at 8:25 AM on May 12, 2012

The CFA curriculum considers real estate. Aluation to be an "alternative" investment and so devotes little time to it. I'm not sure the CFA would be relevant for you. Maybe look at the job descriptions for jobs you're interested in and see what educational criteria they want.
posted by dfriedman at 10:20 AM on May 12, 2012

Sorry for the typo. Should read "real estate valuation".
posted by dfriedman at 10:26 AM on May 12, 2012

I spent a decade working in investment management (equities), and my firm made us all take the CFA. I passed all three levels, and have the absurdly large certificate to prove it. I never worked in real estate, and I'm guessing you're in the US, whereas I worked in the UK, so ymmv, but here are my thoughts.

I think its probably not worth your time. Firstly I think the CFA is a weak curriculum. The intellectual content is low, and I didn't find it useful in my day to day work. Secondly, it barely deals with real estate. The vast majority of the curriculum won't be that useful. Thirdly, you'll have covered nearly all of it in your prior education, and a great deal more.
posted by Touchstone at 6:31 PM on May 12, 2012

Okay, thanks for the answers - more food for thought!

Just as an FYI, I'm from the UK but I got my real estate graduate degree in the US and worked there for a few years.

For the past 4 years I have and am in China.
posted by web74 at 4:27 AM on May 18, 2012

Okay, thanks for the answers - more food for thought!

Just as an FYI, I'm from the UK but I got my real estate graduate degree in the US and worked there for a few years.

For the past 4 years I have been in and still am in China.
posted by web74 at 4:28 AM on May 18, 2012