Real estate analyst Interview Questions

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Morgan Stanley
Real Estate Investment Summer Analyst was asked...8 February 2014

Would IRR be higher for a property generating high cash flow, or one generating nothing at all?

4 Answers

I hope you didn't tell them that. In fact, the IRR is the rate which allows all incoming and outgoing cash flows to be equal. The question is a bit ambiguous considering the IRR is also heavily dependent on the money invested (outgoing). With respect to the question, if you are receiving high returns relative to the amount invested, that would lead to a higher IRR. In fact, an investment that generates nothing at all would have an IRR of -100%. Hope this helps anyone who actually receives a poorly worded question like this. Extra bit of help: IRR > Risk free rate of return -> Project should be considered IRR You just lost your company a lot of money Less

I see this question as really asking: "Do you know the definition of an IRR?" since the original question is so ambiguous. It merits a discussion of IRR rather than a yes/no answer. Less

You can also think of it this way: IRR is the discount rate at which NPV = 0 (breakeven). This means you can assume a simplified model of NPV = –Cost + CF/r 0 = -C + CF/IRR C*IRR = CF Assuming that the investment (cash inflow into the projects) is the same for both projects, we see that as cash flow(s) increase, so does the IRR. tl;dr: IRR is HIGHER for property generating HIGHER cash flows. Less

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Capital One

What are your strengths/weaknesses?

4 Answers

I tried rooftop slushie mentioned above and it was pretty helpful. I recommend it. Less

This is an interesting read: bit.ly/faang100

Customer service / tend to work too much.

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eXp Realty

What are your expectations

3 Answers

To see how the combination of the eXp cloud real estate concept and my experience in the TN real estate market can mutually benefit the customer/clients in this market. :) Less

My expectation is to work for a reliable company. Consistently giving as much loyalty, taking responsibility, and showing as much integrity as it askes of its employees. Furthermore putting in as much effort as anyone to make all parties live better, more fulfilling lives. Less

I told them I expected to receive support and learn as much as I can while upholding ethics and legal perameters. Less

Kroll

Give your assessment of the present condition of the commercial real estate market (regional or national - you pick) or capital markets in general as well as where you see them going over the near-term.

3 Answers

^this kid is an idiot. no one knows where it is going, but it is useful to understand market conditions and interest rates. they will want to know that you are following the markets and have interest/have something to talk about Less

What kid is an idiot you are you that kid that’s an idiot that’s the only kid I see that’s an idiot good luck with those job interviews buddy they may just be thinking the same thing about you idiot moron why can’t people keep their mouth shut if you don’t got nothing nice to say don’t fuking say it Less

There was really no wrong answer per se; I gave a reasonable assessment of the market and a modest prediction of where it was going. Anyone who pays attention to financial news will be able to give an intelligent answer to this question. Less

HFF

What is the amortizing loan constant for a 6% 30-year mortgage on a $50 million dollar loan?

2 Answers

Question does not specify, but I would assume monthly loan payments. If that is the case, monthly debt service is $299,775.26, and annual debt service is $3,597,303.15. The loan constant is equal to the annual debt service divided by the original principal balance of the loan ($50,000,000). The correct answer is 0.07195 or 7.195%. If we assume annual payments, the payment amount in the other answer is correct. To get the loan constant under this scenario, divide by $50,000,000. You should get 0.07265, or 7.265%. Less

PMT = [r(PV) / 1-(1+r)^-n] PMT = payment r = interest rate PV = present value n = number of payments PMT = -$3,632,445.57 This is the constant rate for the amortized loan over 30 years. Less

Coborn's

Differentiate your skills from that of the positions line manager.

3 Answers

My resume clearly reflects a depth and diversity of real estate, construction, facilities and maintenance experience that exceeds the reporting manager and would be a great addition to Coborn's, strengthening the team. Less

I’m a fast learner and I give 100% every day

I’m a very hard worker

Dollar Tree

Why are you interested in this position?

3 Answers

I’m interested and strive to get my communications skills better. also i’m extremely social so it’s seems like a great fit for me! is it a full time job? what are the hours like? Less

I'm a team player that works hard and I love communicating and helping anyone have a good day , it's seems like the perfect job for me Less

I’m interested in this position because I love to restock I love to face things on a shelf and pull things forward and get to know customers and I love when I get to learn the store and a customer says hey where something at and I can go help that customer because I know where it’s at Less

Capital One

nothing to difficult just the usual - when did you lead the team. how to deal with bad team members etc

3 Answers

I coached each employee on each call they made until they were comfortable enough to do it on their own. Plus if they got stuck, they could ring there bell for help and I came running to help. My team always hit their numbers. We helped and encouraged each other. Less

Interviewed 6 FAANG employees and got this: bit.ly/faang100

talked about myself and explained entire resume

TD

If you could graduate no, what would you do?

3 Answers

This question doesn’t make sense. Try reposting the question with the word “now”. Less

Business

Freek out, cause I'm 52, and I should have graduated over 30 years ago...lol.

Wells Fargo

What are the lines in a hotel operating profit and loss statement.

3 Answers

very helpful. thanks, idiot

+Department Revenues -Department Expenses =Department Income -Undistributed Expenses =Gross Profit -Fixed Expenses =Net Operating Income Less

Very easy, just memorize it from the book before you go in. From past and current interviewees, they will ALWAYS ask this question. Less

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