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Home Insider Blogs Ross Blaising's Blog To MBA, or not to MBA; The Apartment Developer's Dilemma
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Aug 26
2011

To MBA, or not to MBA; The Apartment Developer's Dilemma

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Posted by: Ross Blaising on Aug 26, 2011 14:42

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So I have been inundated over the past couple months with real estate friends and mentees who have asked the same question ‘Should I go back and get my MBA?’ I’m not sure if it’s the economy (I will admit that, as a developer, the world can be quite boring when there are no cranes in the air), or perhaps it is just that they feel that it will open doors in the future.

With the last few folks who asked these questions I had one of three answers; Definitely, Maybe and Probably Not. The reason for this is that an MBAs actual value to you is wholly dependent upon the career path that you intend to take. The thing to understand about a University is that it is a business. And as a business, it is in the business of creating a product- the MBA. For it to efficiently create that product for 20 – 100 students, year after year, the parameters of what are taught must be standardized to the point that they can be consistently replicated (i.e. dumbed down). What our MBA factories programs are really well equipped to do is turn middling managers into upper-middle managers- and of course allow us to use the phrase ‘B-School.’ They will NEVER teach you to be a leader…which is a key component to being a good developer.

So back to how I answer my friends when the question is asked:

  1. Ehhhhh- Maybe? For developers who intend to stay developers, you see the quandary; because most development teams have fewer than a dozen folks on them- there is very little middle, let alone an upper-middle to become more qualified for.
  2. Definitely. If on the other hand, their hopes are to move away from real estate development and into corporate management or pure finance, then it is a great move (as would be a law degree).
  3. Nope, not gonna do it. For the developer who plans on working for the family business (unless your last name is Pritzker, Trump, Perez, Cousins, Crow or Tishman) there is so little offered in an MBA program that will ever be of consequence that I’d save the $60K.

Now before I proceed further, I should probably warn you that I have an MBA and lecture to masters level Real Estate and Business School students- so I’m not a hater. The key is to really understand what you want out of the degree and ask a number of folks who have them if the MBA will realistically deliver it. If the answer is ‘yes’, then go and enroll. If the answer is anything else, then go find a really good mentor and soak up everything you can about our wonderful profession- not just how to run a proforma. Learn the connections and the nuance. Figure out the ‘whys’, not just the ‘hows.’ Learn to think like every member of your OAC team.

I guess that there is only one thing that is certain in this whole process; If you do choose to go back and get your MBA, whatever you do,  do NOT put the title MBA on your business card or email signature. All of the smart people in the room will laugh at you behind your back and it will negate any sort of cache that you are supposed to have achieved in those two years of B-School.


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written by Dennis Fassett, August 27, 2011
Actually the only decision criteria that matters is the only one that matters in business, and that's ROI.

The cost of full time MBA program varies, but a decent school will be $25000 per year or more. Since most people don't have that kind of money lying around, that means something in the area of $50000 worth of student loan debt for two years.

So you need to look at the incremental money you can make with an MBA, and figure out the ROI. If you don't like ROI, then how about payback period, which is how many years it will take to pay off that shiny MBA with your incremental salary.

The fact it getting an MBA in this economy doesn't make any sense at all financially.

How do I know this? I earned my MBA 20 years ago next year from a top 20 university, and at that time it was $50k per year including living expenses. The payback period was well over 10 years, and now, in this economy, having it doesn't matter in the least. All that matters now is experience.

In fact, when I'm looking to add to staff I'll hire someone that spent the two years working in a relevant job over the person that spent the two years in the classroom getting an MBA. I don't even use it as a screening device anymore.

And since I know that a lot of people will ignore this, do yourselves a favor and DON'T get your MBA from one of those online programs. I taught at two of them for a very short time, and I can say first hand they're a waste of your time, and resumes listing them are the first ones into the trash can.

Ross I agree whole heartedly with your last sentence. DON'T put "MBA" (or any other TLA) on your cards, email signature, or anywhere else. Everyone really does laugh at you behind your back.

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