To MBA, or not to MBA?

To MBA, or not to MBA?

Christopher Christian

Accountant · Dallas, TX · Member since 2017 · 27 posts · 7 votes

Hello!

I have been driving myself crazy trying to determine whether or not I should go the MBA route, so I'm hoping to tap into the wisdom of the BP community to help with this huge decision. I'm considering Rutgers Business School in NJ, which is the #3 rated MBA program in the NYC metro behind NYU and Columbia. Average starting salary for graduates is right at $100K, and upwards of 90% of graduates obtain employment within 3 months of graduation. The cost of the program is $60K.

A little about me:

-38 years old (would finish the program at 41)

-I currently work in corporate finance at a large media company with 2 years of experience in the department. I have been with the company for 10 years but worked in operations then account management for the first 8. Basically, I have 2 years of corporate finance experience in media.

-Current salary: $60K-$70K range (I live in the NYC metro, so this doesn't go very far.)

-My ultimate goal is to build a real estate portfolio to help me reach financial independence, but I currently own zero properties. Again, living is expensive out here!

Why I'm Considering an MBA:

-To increase my income to have more money to invest in real estate (I have already cut spending about as much as I can).

-To (hopefully) land a job in acquisitions at a large real estate firm (ex. Marcus & Millichap) to develop a deeper understanding of commercial real estate and to expand my network in the industry. I also hope to work in an industry I am passionate about.

-I love learning new skills

Concerns:

-That the $60K in student loans I would take out will be detrimental to obtaining financing for my own real estate acquisitions.

-That I may be able to make the career change without an MBA by teaching myself the necessary skills and by networking. I don't know how realistic this is, however

Ok. That's it in a nutshell. What do you think?

Thanks!

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Most Popular Reply

Rental Property Investor · Bettendorf, IA · Member since 2017 · 187 posts · 256 votes

@Christopher Christian You’re not going to find a lot of support for an MBA on BiggerPockets. In fact, many will discourage even a bachelor degree, in favor of just diving directly into real estate. I happen to have both degrees, and definitely see pros and cons. As has been stated, the two largest cons are the money and time it would take to obtain the MBA and then pay off the debt. I happen to be very supportive of continuing education, but there’s no guarantee for the returns that the average statistics portray. And for me, the debt load would be the biggest challenge, tying up precious capital and borrowing capacity for a long time. I wonder if you could either get a job, or otherwise just get involved somehow, in the real estate industry in a capacity that would give you the kind of continuing education you’re seeking, that would set you up to venture out on your own. Just some thoughts to consider. - Chris

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Bobby Stead
Rental Property Investor · Evansville, IN · Member since 2018 · 23 posts · 15 votes
8y
Christopher - My .02 cents...
When going for my MBA I had to look at what I would get from it. Are you sure that an MBA would get you the new job? In my role in a fortune 400 company the answer was...maybe, however; I also looked at my peer group in my field and the other departments in the company I could work in. The MBA was really the minimum if I wanted to advance and being in my specialty for 15 years had classified me as a channel expert. So, I got my MBA - so far after 1 year no change mostly due to it having to make sense for me but it was recognized by the Executive team and let to some internal executive training that required international travel.
With all that said, do some homework in your peer group. Talk to some higher level managers that lead teams in your desired area, and see if the company has an education benefit that you can use. In my case they did so just my time and effort to get there.
I also think that like other's here that you have to jump in. Hope some of that was helpful and enjoy the comments from others.
0 Reply
Bryan Clement
Rental Property Investor · Union, ME · Member since 2018 · 161 posts · 104 votes
8y
@Christopher Christian I am currently facing the same issue with my bachlor's degree, so less money but still a similar problem. Thanks for posting this question, the discussion has been really helpful. What I eventually settled on was going to the cheapest college I could find, debt free. Masters is obviously more expensive, but if you could get it from a less renowned place (USNH has an online accounting master's degree, for example) you may see a large amount of the benefits for a fraction of the cost, opening up the rest of your budget for real estate investing. Let us know what you decide and how it works out for you!
0 Reply
Jim Pellerin
Real Estate Consultant · USA · Member since 2014 · 1k+ posts · 751 votes
8y
@Derrick Lumsden check out Cardone University.
0 Reply
Devin Fakner
Financial Advisor · Dallas, TX · Member since 2018 · 1 post · 1 vote
8y
Christian,
I was in a similar situation a few years back before I decided to start my MBA. My advice is 100% go for it. However, I'd tweak your plan slightly. There is enormous value in obtaining an MBA but I don't think the value added from RU (at $60k) is significantly more than other options that can cost well under $35k. Additionally, I think the name on the degree is much less important given that your 38 and likely have connections within the industry you desire to work in.
That is just my opinion! I received my MBA from Oklahoma State University and wouldn't trade the knowledge gained for anything. Good luck!
Best,
Devin Fakner
1 Reply
Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
8y
Not sure what everyone else said but if you want to be an RE investor, I don't think having an MBA or a GED means much of anything. I've bought and sold $100+ million in RE and never had anyone ask me to show them my deploma
Which is good since I'm a dropout.
1 Reply
Christopher Christian
OP
Accountant · Dallas, TX · Member since 2017 · 27 posts · 7 votes
8y
@Account Closed Solid advice. I do not yet have a concrete REI plan, but generally speaking, buy and hold multi-family is the space I'm most interested in. My plan is to find a three or four family and live in one of the units to get started, then figure out how to move into larger multi-families moving forward. I don't see myself being able to generate 40K in additional gross income in those two years, honestly. This is a tough call.
Thanks so much for your response and good wishes, and best of luck with the Master's!
0 Reply
Christopher Christian
OP
Accountant · Dallas, TX · Member since 2017 · 27 posts · 7 votes
8y
@Alexander Wardell It sounds like you are on the right track! One of my reasons for considering the MBA was also to have as many options available as possible. My plan was always to get started by house hacking. I want to find a three or four family property and live in one of the units. The issue is that properties are so expensive out here! A friend of mine in the area recently sold his two family for $700K. There was also a three family on my street that sold for around $550K. Even if I do an FHA, it is difficult to save enough for a down payment, closing costs and a starting reserve for unexpected costs. I'm with you, though. Plenty of people have done it, so there has to be a way.
Best of luck with the Master's and landing that first deal!
1 Reply
Christopher Christian
OP
Accountant · Dallas, TX · Member since 2017 · 27 posts · 7 votes
8y
@David Galy That is great advice. My company also offers $5,000 in tuition reimbursement. Climbing the ladder at my current job to get a higher income is definitely something I've considered. I'm just really itching to switch industries and get a W-2 job in the real estate field.
Thanks for the reply!
1 Reply
Christopher Christian
OP
Accountant · Dallas, TX · Member since 2017 · 27 posts · 7 votes
8y
@Cam L. Thanks for the reply! I have not applied to the jobs I'm trying to get into yet, mainly because they seem to require some prior experience. For example, a real estate acquisitions analyst role I was looking at required a Bachelor’s degree and a minimum of 2-5 years of prior experience in investment banking or real estate. Being a corporate finance guy in the music industry, I have experience in neither. Sometimes I see roles that will require a couple of years of experience OR an MBA, so I was hoping the MBA would help with the lack of specific experience. But who knows? Maybe it is possible to make the jump via self-education and networking. I guess my best bet would be to try and meet people who are currently in these roles and get their take.
Thanks for the advice, and best of luck with the B-school applications!
0 Reply
Christopher Christian
OP
Accountant · Dallas, TX · Member since 2017 · 27 posts · 7 votes
8y
@Matt K. That would be an absolutely ideal scenario if I could get a new job in the field I want without going back to school. Maybe I'll just start applying to those higher-paying jobs and see what happens.
Thanks for the response!
0 Reply
Mark Danforth
Member since 2018 · 10 posts · 3 votes
8y
I'm not on the level as most of the people replying but I can't see how getting a MBA would be beneficial. A common question seems to be "do you wan't to have a high paying salary or to be wealthy?". Once I knew the answer to this question for myself I began to discover what I actually wanted.
0 Reply
Christopher Christian
OP
Accountant · Dallas, TX · Member since 2017 · 27 posts · 7 votes
8y
@David H. Thanks for sharing that. One of the reasons I'm considering the MBA is so I can transition out of the industry I'm currently in (music business). My idea was to get a job at a large real estate firm to learn the industry, network, and to earn a higher income in order to benefit my personal real estate investing. The thought was that I would create synergies between a W-2 job in the real estate industry and my personal real estate investing. There is something to be said about just grinding it out where I am and moving forward with real estate investing now, though. It makes a lot of sense and something I am very heavily considering.
Thanks for the response!
0 Reply
David H.
Madisonville, LA · Member since 2018 · 125 posts · 71 votes
8y
@Christopher Christian Apologies I should have read your post better, I didnt realize you were pursuing the MBA to switch careers, I thought you were just looking to move up quicker in your own discipline. In that case it may be worth it. If you are in a field that isnt providing the funds you need than I can seeing going the mba route can be worth it. It actually sounds like a good idea.
0 Reply
Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
8y
Originally posted by @Mark Danforth:

I'm not on the level as most of the people replying but I can't see how getting a MBA would be beneficial. A common question seems to be "do you wan't to have a high paying salary or to be wealthy?". Once I knew the answer to this question for myself I began to discover what I actually wanted.
Amazing quote. I totally agree. I left a job that I had mix 6 figures, and a few years at low 7 figures. It was commission and not salary but it was still a job. When I decided to go multifamily, I knew I could never have a 'real' job again
Want to know what my RE "MBA" was? Buying an 8 unit when I had no clue what a lease looked like. Amazing how much how fast you learn when you jump into the deep water.
1 Reply
Matt Millard
Lewisville, TX · Member since 2015 · 344 posts · 264 votes
8y
Also factor in tax rates of w2 versus capital gains & other real estate tax deductions!
0 Reply
Ross NA
Member since 2018 · 5 posts · 2 votes
8y
One more thing I should add. If you could get into a top 7 MBA program, and wanted to do investment banking or management consulting, your chances of getting hired in those fields at your age is slim to none. They hire younger people for those roles who they think will work over 80 hours a week. One exception may be academia. If you want to get a PhD in Business than getting an MBA from a top 15 or so school could help springboard you in a PhD program, but you still have to have top GMAT scores for that.
0 Reply
Andrew Flora
Rental Property Investor · North Vernon, IN · Member since 2018 · 136 posts · 192 votes
8y
If you're serious about FI do this: Forget about the MBA, opportunity costs are too high. Leave NY. You can easily make that salary in a different city and cut your living expenses in half. When you move, start your portfolio with a house hack. With a strict budget and strategic investing you will be halfway to FI by the time you would be graduating with your MBA. In 10-15 years quit your job and invest full time from a beach somewhere.
1 Reply
Sharon M.
Rental Property Investor · Atlanta, GA · Member since 2017 · 65 posts · 34 votes
8y
@Christopher Christian I obtained my MBA in my mid 30s but the company I work for offers tuition reimbursement. Perhaps you’ve check this out with your employer, but I would only pursue it if there was something like this being offered. Otherwise, the sooner you can get started in real estate the better. There’s a wealth of information (Forums, podcasts, etc) on this site alone. Best of luck to you!
0 Reply
Luis C.
Rental Property Investor · Walnut Creek, CA · Member since 2016 · 12 posts · 7 votes
8y
@Christopher Christian Since you mentioned you work for a large media company, have you looked at whether or not they subsidize the cost of your MBA?
That said, there was a recent article that interest in the MBA is on the decline in the WSJ.
https://www.wsj.com/articles/m-b-a-applications-ke...
0 Reply
Carl Pickens
Griffin, GA · Member since 2017 · 63 posts · 82 votes
8y
literally sitting in an MBA class right now distracting myself with BP. Have not learned anything useful and will graduate next semester. If you cant get started with 60-70k salary you should move.
0 Reply
Jonathan Soto
Lender · Newark, NJ · Member since 2016 · 695 posts · 252 votes
8y
If your goal is to build a real estate portfolio I wouldn't go for the MBA. You can buy a multifamily with your current income just wont be in your first choice of living. You need to start networking and go to all these meetups in your area. You can partner up with someone by putting up the cash and loan or other ways depending on how you structure it. If you don't have the cash for a down payment, you need to start saving up move to a smaller apartment, make sacrifices some where to save up the cash. You can do this in the time you were thinking of going for the MBA.
Best of luck.
0 Reply
Lesley Resnick
Real Estate Agent · Jacksonville, FL · Member since 2015 · 1k+ posts · 1k+ votes
8y
I have considered it on a numbr of occasions while I was a w2 employee. Ultimately, I did a spreadsheet and considered what the pay back period would be. It would take most of my career to cover the cost, not to mention the time lost during the program. If your employer is going to fund it and allow work time, then it may be worth it.
If you are interested in private RE investing for yourself, there is no reason.
1 Reply
Bart H.
Dallas, TX · Member since 2016 · 1k+ posts · 745 votes
8y
Originally posted by @Christopher Christian:

Hello!
I have been driving myself crazy trying to determine whether or not I should go the MBA route, so I'm hoping to tap into the wisdom of the BP community to help with this huge decision. I'm considering Rutgers Business School in NJ, which is the #3 rated MBA program in the NYC metro behind NYU and Columbia. Average starting salary for graduates is right at $100K, and upwards of 90% of graduates obtain employment within 3 months of graduation. The cost of the program is $60K.
A little about me:
-38 years old (would finish the program at 41)
-I currently work in corporate finance at a large media company with 2 years of experience in the department. I have been with the company for 10 years but worked in operations then account management for the first 8. Basically, I have 2 years of corporate finance experience in media.
-Current salary: $60K-$70K range (I live in the NYC metro, so this doesn't go very far.)
-My ultimate goal is to build a real estate portfolio to help me reach financial independence, but I currently own zero properties. Again, living is expensive out here!
Why I'm Considering an MBA:
-To increase my income to have more money to invest in real estate (I have already cut spending about as much as I can).
-To (hopefully) land a job in acquisitions at a large real estate firm (ex. Marcus & Millichap) to develop a deeper understanding of commercial real estate and to expand my network in the industry. I also hope to work in an industry I am passionate about.
-I love learning new skills
Concerns:
-That the $60K in student loans I would take out will be detrimental to obtaining financing for my own real estate acquisitions.
-That I may be able to make the career change without an MBA by teaching myself the necessary skills and by networking. I don't know how realistic this is, however
Ok. That's it in a nutshell. What do you think?
Thanks!
I have an MBA, and I think its great. It helped me to get my current job etc.
The knowledge you get from an MBA is fine, its helpful.  HOWEVER, if you want to go into real estate I think there is marginal value in helping you get a job. Those in real estate dont care about your college background, and the only benefit is understanding the concepts like discounted cash flow, compounding interest, cap rates etc..
More to the point, I would NOT go back full time, lose 3 years and run up 60K in debt. IF you factor in say 40K/year in opportunity cost, you are giving up 120-140K in income. ($140K=60+40 from not working yr1+40K from not working year2.)
That money would be better served as your initial investments into real estate.
Plus honestly at your age, a premium MBA doesnt really help. Its not like you are trying to get a job on Wall-Street or with some top level consulting company.
IF anything, keep working full time, and take some night classes to get your MBA. Have your company pay for the tuition, and get investing as soon as possible.
Its more important to buy a couple of properties than it is taking classes to prepare to become a real estate investor.
2 Reply
Uwe G.
Vancouver, WA · Member since 2014 · 127 posts · 60 votes
8y
@Christopher Christian, I would isolate the decision down to getting the MBA vs anything to do with Real Estate Investing. Will you stay in the area your entire life or the bulk of the next 15 years? If you move out of the area the MBA will dramatically lose value in other markets. If you aren't going to a top 20 MBA (better if top 10) I feel they don't hold their value longterm. Can you apply for the same job without the MBA? If you plan to stay in corporate America for a 15+ more years, stay in your regional area, and the MBA will land you a job that pays more but you maintain your same level of happiness on the job then I think the MBA is a great option to consider.
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Bala A.
Rental Property Investor · Memphis · Member since 2018 · 128 posts · 97 votes
8y
Do the MBA my friend, it is the BEST thing I have done to my career personally. I can break down to Pre-MBA and Post-MBA and I can tell you, atleast for me it has been chalk and cheese.
Btw you do NOT need the HARVARD, Stanford, type Ivy League.
It does not matter as long as the MBA & the University is ranked in the Top 200.
After 2-3 years post MBA, wages equalises and all MBAs are equal.

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