Buying real estate is not the hard part. Buying the right real estate at the right price with the right business plan - and then executing on it - is what separates operators who build lasting portfolios from those who overpay and underperform. At Requity Group, we have acquired 32 properties totaling over $150 million in assets under management. Every acquisition has taught us something. This article distills those lessons into the framework we use today.
How We Source Deals
The best deals rarely hit the open market. By the time a property is listed on LoopNet or marketed through a national brokerage, every buyer in the country has seen it. Pricing reflects that competition. Our acquisition pipeline is built on three channels that generate deal flow before or outside of the competitive marketing process.
Broker Relationships
We maintain active relationships with regional brokers across the Southeast who specialize in our target asset classes: manufactured home communities, RV parks, and small commercial properties. These brokers know our buy criteria, our ability to close, and our track record of performing on contracts. When they get a listing, we often see it before it goes to market - or we are the first call for off-market pocket listings.
The key to productive broker relationships is follow-through. We respond to every deal submission, even the ones that do not fit. We provide clear, specific feedback on why a deal does not work for us. Over time, this trains our broker network to send us better-qualified opportunities because they understand exactly what we buy.
Direct Outreach
We identify target properties through public records, tax assessor databases, and proprietary data sources. We then contact owners directly - by mail, phone, or in-person visits. This is unglamorous work. The response rate on direct mail campaigns in commercial real estate is typically 1-3%. But the deals that come from direct outreach are the most profitable in our portfolio because there is no broker fee, no marketing competition, and the seller's motivation is often high.
Repeat Sellers and Referrals
After 32 acquisitions, we have a growing network of sellers who have sold to us before or who were referred by someone who has. Repeat transactions are efficient: the seller knows how we operate, trusts our ability to close, and is often willing to negotiate favorable terms - including seller financing - because the relationship reduces their perceived risk.
The Screening Framework
We evaluate approximately 200 opportunities for every 30 we seriously underwrite and the subset we ultimately fund. The initial screen is designed to reject quickly so we can focus our analytical capacity on the deals that have real potential.
Pass/Fail Criteria
Before we open a spreadsheet, every deal must pass five binary tests:
Market fundamentals. Is the property in a market with positive population growth, employment diversity, and demand drivers for the asset type? We do not buy in declining markets regardless of price.
Asset quality floor. Does the property meet a minimum physical standard, or can it be brought to standard within our renovation budget? Some properties are too far gone. Deferred maintenance that exceeds 20% of purchase price is typically a pass.
Seller motivation. Is there a reason this deal can be acquired at a discount to replacement cost or stabilized value? Motivated sellers - estates, retirements, partnership disputes, management fatigue - create the pricing dislocations we target. If a seller is testing the market at an aspirational price, we move on.
Clear path to value creation. Can we identify at least two independent value drivers? A deal that relies on a single thesis (rent growth alone, or occupancy improvement alone) has no margin for error. We want deals where we can push rents and improve occupancy and reduce expenses.
Exit viability. Can we underwrite a realistic exit - either a sale at a market cap rate or a refinance into permanent debt - within our target hold period? If the exit depends on cap rate compression or market appreciation rather than operational improvement, the risk profile does not fit.
What We See in Practice
Roughly 60% of submissions fail the initial screen within the first hour. The most common reason is market quality - we see many deals in rural or declining markets priced attractively on a cap rate basis but with no demand fundamentals to support long-term value. The second most common reason is unrealistic seller pricing. A seller asking for a 5% cap rate on a property that should trade at 8% based on its condition and location is not a negotiation opportunity - it is a waste of diligence resources.
Underwriting That Protects Capital
Once a deal passes the screen, it enters formal underwriting. Our underwriting process is designed to answer one question: what is the risk-adjusted return, and is it sufficient to compensate our investors for the illiquidity and execution risk?
Revenue Underwriting
We underwrite revenue to in-place leases, not to proforma projections. If a property has 50% occupancy, we model 50% revenue on day one and build the lease-up timeline based on comparable absorption rates in the submarket. We never assume full occupancy in year one.
For manufactured home communities, we underwrite lot rents to market comparables - not to the highest rent in the market, but to the median. If current rents are below market, we model annual increases of $25-50 per lot rather than a single jump to market rate. This is more conservative than what many operators assume, but it reflects how rent increases actually work in practice. Large, sudden rent increases cause turnover. Gradual increases retain tenants and grow NOI sustainably.
Expense Validation
We verify every operating expense against comparable properties and against actual invoices when available. The most commonly understated expenses in seller-provided financials are property taxes (especially post-acquisition reassessment), insurance, and capital reserves. We add a line item for capital reserves on every deal - typically $250-500 per unit per year - even when the seller's financials show zero.
Sensitivity Analysis
Every deal is stress-tested across three scenarios: base case, downside, and break-even. The downside case applies a 10-15% reduction to revenue and a 5-10% increase to expenses. The break-even analysis identifies the occupancy and rent levels at which the deal generates zero cash flow. If the break-even occupancy is above 75%, the deal has too little margin of safety.
Negotiation and Structuring
Price is only one variable in a real estate acquisition. Terms often matter more than headline price, especially in a market where sellers have unrealistic value expectations.
Seller Financing
Seller financing has been a significant tool in our acquisition strategy. When a seller holds a note at a below-market interest rate, it reduces our cost of capital and improves cash-on-cash returns for our investors. Sellers benefit from installment sale treatment, which can defer capital gains taxes, and from monthly income that replaces the cash flow they were receiving from the property.
We have closed multiple acquisitions with seller financing comprising 50-70% of the capital stack. In these structures, the seller carries the first mortgage and we bring equity from our investors for the balance. The blended cost of capital is significantly lower than an all-equity or bridge-financed deal.
Earnest Money and Inspection Periods
We structure our purchase agreements with inspection periods long enough to complete thorough due diligence - typically 30-45 days for manufactured home communities and RV parks, where physical inspection of utilities, homes, and infrastructure takes longer than standard commercial assets. We tie earnest money deposits to diligence milestones rather than going hard on day one. This protects our investors' capital while demonstrating to the seller that we are a serious buyer who will perform once diligence is satisfied.
Due Diligence That Catches What Underwriting Misses
Underwriting tells you what the deal should look like on paper. Due diligence tells you what it actually looks like on the ground. The gap between those two things is where risk lives.
Physical Inspection
We walk every unit, every lot, every road, and every utility connection. For manufactured home communities, this means inspecting individual home conditions, utility metering, septic systems or sewer connections, and road surfaces. We have walked away from deals after physical inspection revealed utility infrastructure issues that would cost $500,000+ to remediate - costs that were not reflected in any financial document.
Tenant and Lease Audit
We verify every lease, every rent payment history, and every tenant relationship. In manufactured home communities, this includes confirming which homes are tenant-owned versus park-owned, which lots have written leases versus month-to-month occupancy, and which tenants are current on rent. Discrepancies between the rent roll and actual collections are common and can materially affect the acquisition price.
Environmental and Title
Phase I environmental assessments are standard on every acquisition. For properties with underground storage tanks, historical industrial use, or proximity to contamination sites, we commission Phase II assessments with soil and groundwater testing. Title searches must be clean, with all liens, encumbrances, and easements identified and resolved before closing.
Post-Close: The First 48 Hours
The acquisition does not end at closing. The first 48 hours set the tone for the entire investment. Our operations team, led by Grethel, executes a standardized onboarding protocol on every deal:
Day 1: Secure the property (re-key locks, change gate codes), photograph every unit and common area for baseline condition documentation, and notify all tenants of the ownership transition with a written welcome letter that introduces the new management team and provides updated contact information.
Day 2: Audit every vendor contract (landscaping, trash, utilities, insurance) and initiate renegotiation or replacement where pricing exceeds market rates. Transfer all utilities and insurance to Requity Group accounts.
Days 3-30: The full 90-day onboarding checklist begins, covering deferred maintenance prioritization, rent adjustment planning, and value-add business plan execution.
This operational discipline is a direct result of being a vertically integrated company. We do not hand off to a third-party manager and hope for the best. We control the execution from acquisition through disposition.
Frequently Asked Questions
How do you find off-market real estate deals?
Three primary channels: cultivating relationships with regional brokers who send us pre-market and pocket listings, direct outreach to property owners through mail and phone campaigns, and referrals from sellers and partners we have transacted with previously. Approximately 60% of our acquisitions have come through broker relationships, 25% through direct outreach, and 15% through referrals.
How many deals do you evaluate before buying one?
We review approximately 200 submissions for every 30 that receive formal underwriting, and we close on a fraction of those. The initial screen rejects roughly 60% of opportunities within the first hour based on market quality, seller pricing, and asset condition. This selectivity is intentional - our underwriting process exists to protect investor capital, not to deploy it quickly.
What makes a good real estate acquisition?
The best acquisitions share four characteristics: a purchase price below replacement cost, at least two independent value creation levers (occupancy, rents, expense reduction), a motivated seller, and a clear exit to permanent financing or sale within the target hold period. Deals that depend on a single thesis or on market appreciation rather than operational improvement carry too much risk for our portfolio.
How long does a commercial real estate acquisition take from LOI to close?
Typical timeline is 45-90 days from signed letter of intent to closing. The major variables are inspection period length (30-45 days for complex assets), financing timeline (bridge loans close in 10-14 days; seller financing is negotiated concurrently with diligence), and title/environmental clearance. Manufactured home communities and RV parks often take longer than standard commercial assets due to the number of individual units and utility systems to inspect.
Does Requity Group invest its own capital in acquisitions?
Yes. Our principals invest significant personal capital alongside our investors in every transaction. This alignment of interest means we only acquire properties we are willing to put our own money into, and we are directly incentivized to maximize returns rather than just collect fees.