To MBA, or not to MBA?

105 Replies

@Christopher Christian My personal opinion is that an MBA is overrated when it comes to career advancement and performance will heavily outweigh it. And the time devotion for it if spent towards what your ultimate goal is would pay off much more. I have a masters in engineering and I wouldnt do it again and my employer paid for it. I think spending that time hustling at your employer or in real estate would pay off far more. . Not even factoring in the debt Having said this it does depend on your goals and your particular field. If its strictly career advancement it may be worth it but if it's to make more to get into real estate I dont think it is at all.
@Christopher Christian The number one thing you pay for with an MBA is the network. So if this is something you are considering you need to drill into the network of alumni to see if there are connections to the field you want to enter post. I'd also look into the employees of firms that interest you and see how they got their via LinkedIn. If an MBA is the only way, it miiiight be worth it if that's a job you're truly interested in for a career. But since you're more interested in full time real estate i'd say you have to jump into real estate. Start working on your network with local investors (hint: this is practically free). Invest! There are plenty of people here or profiled on the BP podcast who started where you are and got to FI. To give up 70k+ x 2 years + 60k in debt + $livingexpenses x 2 years for a path that's not the one you want other than for a slightly higher salary makes little sense. I'd focus on moving up in your field for that salary bump, saving as much as possible, and investing/networking now now. Test the waters to see if you really want to do REI. An MBA changed my life but that's because I love the field I moved into. Yes, it pays more than my preMBA salary now but that took 3 years to realize. Most MBAs aren't career changers so it gives them abig bump in their field. Career changers often take a salary hit while they gain experience. I wouldn't do it unless you were 100% about the career path on the otherside. I would not do it because ten years on you want to change jobs again to a FT REI.

@Christopher Christian

I'm an MBA fan and have one.  I went to Duke's Fuqua School of Business.  I'd advise that if you can go into the top 15 or so schools and you believe in the value of the MBA, go, regardless of the cost.  The debt although intimidating, has little impact on your access to financing.  Part of the reason there is that the deferred payment plans don't have a ton of monthly payment, which means (I'm guessing here) at your $60,000 debt load you threw out, you might have a $350 monthly payment.  That's a guess, but in a nutshell that doesn't have a huge impact on the bottom line of your debt to income ratio - which is the one factor that might affect your access to capital. 

When you start moving 'down' the list into the 2nd/3rd tier of business schools, you are no longer going for the network / prestige factor, and I'd encourage you to think more about cost with regards to picking a school.

It sounds like you do have some good experience in a field.  

I'd encourage you to keep an open mind with regards to post MBA career options.  Real estate is basically entrepreneurship - and per WSJ the most predictive factor to success for an entrepreneur is variety of job experiences.  So, seek those out.  You may go on a round-about journey.

Other things I'd encourage you to think about:

  1. Consider programs where they cater to working professionals, especially at top notch schools, if your employer/schedule allows it.  Good brand name schools are getting creative with this stuff.
  2. Consider schools out of your area, and consider a market out of your area with regards to purchase of RE.  Pick a market with a good school, and see if you can set the goals to buy a house and 'house hack' through school.  High cost of living places are usually the WORST places for people to enter a market like real estate, starting from scratch, both from a buying a home to live in, and buying investment properties.

If you can drastically reduce your costs with scholarships I would do it. But, I would do some further research on the company before making any decisions

-Do they actually hire from that University? Look on LinkedIn

- Are they actually looking for an MBA and an MBA from that school?

- What other experience is that company looking for in that 100k position? Do you have it? Or can you obtain it without extra costs

- What is the competition like for that position and how do you measure up? If they are a top company then they recruit nationally. How does that school measure up nationwide?

- If they are a top company with hundreds of candidates. Why you and not someone else? 

- What are the ratios of possible candidates and actual open positions for this job?

I'm not looking for your answer to these questions but they are good questions to consider. 

@Christopher Christian In a way MBA resetting your carrier, but it move usefull for corporate path. If you are planning to work in small business of for yourself it is of somewhat limited value. The value of good MBA is 70% in the network of people you are going to school with. The value of the network is lower outside of big corporations. Sometimes the education itself is usefull, but you probably can get it for less money. I got MBA from NYU and think the it is worth it even though i am doing a real estate startup. But i am a special case since i was an immigrant and wanted to fit in.

I would highly suggest you begin to look for a different job / employer. 

With your knowledge, experience and drive you should absolutely be looking for new opportunities. This is definitely an employee's market. 

Whatever you decide, good luck to you. 

I am an MBA. Here are my 2 cents. 

If you want to go into management consulting, investment banking, getting an MBA is a good deal IF you can get into a top 7 school. 

From a pure ROI perspective, otherwise, an MBA is not worth it, especially if you do it full-time. And especially if you want to be an entrepreneur.If you cannot get into a top 7 school I would only do it if your employer will pay for it. 

Do not believe the salary statistics the schools promote. I repeat, DO. NOT. BELIEVE. THEM. They are manipulated and it is not the degree which caused those people to get their salary (it is largely years of experience, the area and field they work in, and ability). An MBA is just a tiny plus (unless from a very top school). If you do decide to do it and you cannot get into a top school, I recommend doing it part-time while you keep your full time job, at a cheap school. Make sure the school is AACSB accredited, and also try to find one in your general region. 

I am going back to school to be a high school business teacher but I did not need my MBA to do this. 

I agree with @Ross Midwest. Some schools have a way of embellishing these types of statistics. 

Also, I don't mean to be a jerk or anything, but if you are 38 and earning less than 70k in NY, then I honestly don't think getting an MBA will increase your chances much of vaulting your career into something that makes over 100k. 

You really need to take a hard and honest look at why you are still only making that much and what you should do to increase your earnings going forward. What kind of hours are you putting in at the office? How have your performance reviews been? Are you networking with people within your industry? And probably most important... have you been looking at other positions? 

The economy has been so good for the coastal states for so long now... I work in finance also and probably get at least two or three emails or calls from recruiters every week asking if I'd be interested in switching jobs. Why not look for other positions that pay more? A degree can open some doors, but not having a degree is by NO Means a glass ceiling toward a six figure salary. 

Having an MBA has nothing to do with most real estate investing.

However, if you want to run a Hedge Fund or a REIT then an MBA in real estate *might* be useful. I'd decide what I want to do, then interview people doing that and ask them how they wound up in the field. Don't buy into the belief that an MBA paves they way. There are sooooo mannny MBA's these days that you have to zero into your target profession and ask people how they got there.

@Christopher Christian If your goal is to increase your income you’ve been at your current job too long! Getting 2%-3% raises every year doesn’t do it, unfortunately to take a big jump in salary you have to change companies. I’m at my 3rd company in 10 yrs and my income has tripled in that time. For what it’s worth, I got my MBA during that time period and I don’t really think it made any difference. If I were you I’d use my time to network, work on killing the interviews, and land a new job. The job market is on fire so now is the time to go for it!

@Christopher Christian you are getting good advice here. 

I have had 20 years in corporate, most of it in middle and upper management roles. In my experience it is always the personality and track record first that will make you a candidate for a job, your formal education second. Here is what I often heard when a recruiting manager say when presenting his choice: "He is a great guy and has the experience we need for this position. He has a degree too".

Go for an MBA if you have the desire to learn what they offer, but don't look at it as "forced appreciation".

Maybe it's time to relocate and interview for a bigger and better job.

You also mentioned to get your real estate license. Take it from me: 95% of my agent colleagues don't understand investing, not at all. So there is not much you can learn from them. The drop out rate after year one is insane, like 85%. Same after year two. Most agents never come into production and sell less than 7 deals a year. Doing it part time is the best way to fail.

@Christopher Christian I learned a ton in my MBA program. It gave me the confidence to start a growing business that is now really taking off. Investing in your mind is very important. I did have an employer that paid 85% for an A, 80% for a B and like 75% for a C; I used excess student loan money to fund rehabs. If you can have your cake and eat it too, do it. If you have to choose between the two, invest in your mind. You'll figure out how to make money as you go through the program or after it. A true MBA graduate who is educated correctly will not fall on their face. I think back to my program all the time. At one point in the program a light bulb went off that let me know I was nerd now. I have so much confidence in business because of the program. As I grow I'm not afraid to scale. You can always fall back on your education. MBA all the way.

Hey @Christopher Christian , thanks for a great post! I'm in a similar boat considering my MBA in real estate finance as well, so I'll def be following this thread. And after graduating from RBS for undergrad, I've definitely considered their MBA program as well. A few caveats from my response that you may want to take with a grain of salt though:

  1. I'm a career-switcher going from the creative advertising industry into real estate finance
  2. I'm younger than you and therefore have some more flexibility to the program I can go to around the country. 
  3. I also make a lot less than 60-70k and live in NYC :(

One thing to consider is that Real Estate is largely network-based industry, probably more than any other industry. Like Michael Becker says, it's an "unfair business". So in order to do well, you'll need a solid network. Schools like NYU and Columbia have robust programs that have been around since forever and therefore attract the "big guys" to their on-campus recruiting sessions. Companies like Tishman, Blackstone, Tramell Crow, Marcus & Mill, and a lot more. The Rutgers MBA is brand spankin' new, like literally a year or 2 years old. The dean is an ex-Graaskamp Center guy (great program from U. Wisconsin) and is trying to build up the program at Rutgers. This is two-fold: on one hand he has to compete with the NYUs and Columbias who companies KNOW are solid programs so they won't even entertain coming to Rutgers to recruit, BUT ON THE OTHER HAND, the Rutgers real estate program will work their tails off to get you into some of these top firms, because they want to say "an RBS Real Estate grad now works at [insert top name prestigious firm here]" on their Admissions flyers. Does that make sense? Not to mention that being a small program will allow you to get specialized guidance from your professors and the dean. This also leads to the type of the networking events and speakers that the school can bring--Real Estate gods like Sam Zell would probably go to Columbia to speak vs. Rutgers, but again, but then again they may not. So you should definitely weigh those factors in.

If your goal is Brokerage, you don't really need an MBA. You basically just need to have a solid understanding of deal analysis and deal flow, hustle, and a network you can tap into bring in deals. If you could work as a realtor I'm sure you could hustle your way into Brokerage (but I've never done this so I may be incorrect). Getting the MBA may be more helpful if you want to get into development, REITs, and Private Equity. Brokerage is more "eat what you kill" but CorpFi, REITs, and PE are more "eat part of what the firm makes", if you want to think of it that way.

Also, like someone mentioned in their response, BP doesn't generally show love to MBAs and college degrees in general. A lot of the responses are valid--you don't NEED a college degree to succeed in REI (Look at the Poor Dad in "Rich Dad Poor Dad" for example), just need a lot of hustle and need to continue building your skills. That said, many MBA programs teach students the skills they'd need to work in commercial real estate such as: Argus training (at a very discounted rate for students), Salesforce, building models and underwriting deals, getting LEED Certified, etc. and they often have student discounts for doing so. For example, Georgetown has a Real Estate clinic that makes you underwrite live deals for Invesco, a large investment company. So you'd imagine how great it looks to tell an employer "yeah I don't have too much experience in real estate, but I underwrote and analyzed 50 deals as part of the real estate club at school". Schools also offer things like Real Estate funds and certification courses. You may want to consider dipping your toes into a Diploma or Certificate program at one of these schools to get a feel of what an MBA course could look like. I just started the Cert. program at NYU and it's going well so far.

If you're interested in a real debate about Real Estate MBAs (no offense BP ;)), check out Wall Street Oasis and specifically some of these threads:

My final point is that like you, I want to use an MBA to help build out my own portfolio. I want to work in commercial real estate and take what I learn from an institutional perspective and apply it to my personal investing. I want to be involved in MFH Syndications, so I look at the MBA as a seal of credibility to prospective investors. All other things equal, would you rather invest your money with an MBA from a top-25 school who's also worked for a CRE firm for a few years OR someone with just a Bachelors who's underwritten a few deals off LoopNet? THAT'S the question I'd like to pitch to my potential investors.

Ahhh, sorry I think I rambled a bit but like I said, I'm in a similar boat and looking to do my MBA in the next couple of years. Hope this is helpful and feel free to PM me if you have any questions. Hope to stay in touch down the line. Maybe we can even do a deal together with all the (potential) fancy MBA knowledge we have haha. Good luck!

@Christopher Christian Being a scientist, I had pretty much no background in business and I think that it has been worth my while completing an MBA. While I haven’t learned much about real estate, the things I’ve learned about accounting, finance, and analytics have been very valuable. I’d say if you’re like I was (not much knowledge about general business concepts), then you should definitely get an MBA and try to find a program you can do part time. In your case, I’m guessing you already have considerable knowledge in these areas, so it might not be worth your while. What I would do is take a step back and consider the financial aspects of it. Get an estimate of what your student loan payments will be, and then consider the potential salary increases as well. If the numbers say you’re going to be a lot better off, then the MBA may be worth considering. Bear in mind, though, that an MBA is not going to really equip you with knowledge of real estate investing, and you’ll have to learn this. In summary, I’d look at a program you can do part time and do it only if it is really going to provide a significant salary increase. If that increase, and putting off your real estate investing goals by a few years are worth it, then consider going for it. Good luck with your decision, Andy

My situation is very different.

Currently only have a BBA. Salary = $xxxk

Employer is paying for my MBA (MBA in Business Data Analytics)... with only 3 classes to go.

So my MBA is free... . if I had to pay for it.. I don't know if I would have pursued it or not.

@Christopher Christian The ONLY reason to get an MBA is ROI of < 5 years. If you'll see an immediate bump in your salary to justify the time and the money, go for it. I would never finance your education. Pay cash or don't do it.

If you're trying to get into RE full time, an MBA is pretty useless. That's my opinion. 

@Christopher Christian  I wouldn't do it. Has anyone at MM told you that an MBA is a requirement for getting a role there? If I was you, I would work on building a relationship with MM's local branches, stay engaged, go to their events, and let them know that's where you want to work. You would be surprised what happens when people know how hungry you are to work there and learn the trade of real estate.

You're mixing correlation with causation. The people who join these MBA programs are already smart and have solid skills so despite the MBA they will still be able to earn high six figure salaries. I went through this exercise after taking a mini MBA program at Stanford before I landed a role at Google. The MBA is not prevailing cause of the earnings potential of MBA grads. For instance, at Google, a few employees are already working six figure jobs and decide to get a night MBA while working at Google. After they graduate the MBA program, they will still be in the same Google roles, BUT the MBA Programs will count their Google job as part of their post MBA salary.

In this day and age, masters degrees outside of STEM and maybe psych, are becoming less and less important and are facing downward pressure from online institutions. Being you have so much work experience, the MBA isn not as important as it would be for a Jr employee with 3-4 years of experience that's trying to make a complete career shift. If you told me you majored in physics and want to career switch to project management or get into tech, I guess you could make an MBA argument.

If you want to work at MM they are looking for people who are fresh out of school that they can train or people who already have real estate experience. You could join MM with your experience profile, but it would require either a slight paycut (assuming they ignore your excellent experience on corp finance). BUT that initial paycut will be lower than the costs involved of getting your MBA. You're looking at 100k to pay for it, but then foregone investing opportunities, housing, and earnings, can be much higher.

Most MBA are general programs with standard operations, marketing, finance, and sales classes, with a few real estate classes. You would probably be better off just going for a certificate course specifically on real estate than going for the full MBA. As you age, the value of an MBA for a person in your situation greatly diminishes. 

I would think harder and not use the MBA as shortcut for hard work. The MBA admin team will try to convince you this will solve your issues, but there are no guarantees, compared to you doing the hard work necessary for MM considering taking you on. 

If you can pay for it without loans, then maybe. If you're going to have to borrow; then absolutely not. I would argue that taking one year of law school to get the 1L crash course education and then dropping out would be more useful from a "skills" standpoint than an MBA. MBAs are often about payming tuition in exchange for making connections and networking; if you already have good connections and network, save your money. 

@Christopher Christian Getting an MBA is not a sure way to higher income. I got my graduate degree, working for a major oil and gas company in Houston, and they couldve cared less. I did not get a raise as a result, but I did acquire a nice student loan payment! Also, I work in HR and we dont pay new hires more for higher degrees. It looks good on your resume, and shows dedication, but we really want to see what your experiences have been. I always tell peoplenot to do it. I have confidence you can find another way....

@Christopher Christian I don't think anyone on here can tell you the right answer. Only you will truly be able to come to the right answer. If your ultimate goal is to invest in real estate, then will putting $60k into an MBA help you do that? I have a Masters as well, this was before my real estate dreams began, but the program was $30k. It was a one year program in Florida which is much more cost effective than New York. It did help me with my career and to get where I am today. 

You should consider investing out of state. I live in Brooklyn now so I know how expensive it is here and you're right, $70k salary here does not go very far unfortunately. But investing out of state is a real option. That's what my husband and I do. 

As for the MBA question, make a pros and cons list and then come to a final conclusion. Best of luck!