Selectivity Is Not a Slogan

At Requity Group, we review roughly 200 deals for every 30 we fund. That 15% acceptance rate is not arbitrary. It is the product of a disciplined underwriting process designed to protect the capital our investors have entrusted to us.

We have raised over $70 million in investor capital. Every dollar represents someone's trust in our judgment. This article pulls back the curtain on how we evaluate deals, what disqualifies a borrower or property, and how our underwriting protects downside risk while capturing upside.

The First Filter: Does the Deal Make Sense?

Before we run numbers, we ask basic qualification questions:

  • Is the property type in our wheelhouse? We focus on commercial and residential bridge loans and manufactured housing community acquisitions. We do not chase asset classes where we lack expertise.
  • Does the borrower have relevant experience? A first-time investor trying to reposition a 200-unit apartment complex is a different risk profile than a sponsor with 10 completed projects. Experience matters.
  • Is the exit strategy realistic? Every loan needs a clear path to repayment. If the borrower cannot articulate how they will refinance or sell, the deal does not advance.

Roughly 40% of deals are screened out at this stage. They are not bad deals necessarily. They just do not fit our risk parameters.

The Deep Dive: Property-Level Analysis

Deals that pass the initial screen move into full underwriting. Our team, led by our acquisitions and asset management professionals, evaluates:

Current cash flow. We underwrite to trailing actuals, not projections. If a property is generating $100,000 in NOI today, that is our starting point. Pro forma assumptions get stress-tested against market data, not accepted at face value.

Comparable analysis. We pull rent comparables, sale comparables, and operating expense benchmarks for the specific submarket. A property claiming $1,200 rents in a $900 market gets flagged immediately.

Physical condition. We require property inspections and, for larger deals, independent engineering reports. Deferred maintenance is not a dealbreaker, but it must be quantified and factored into the loan structure.

Market fundamentals. Population growth, employment diversity, supply pipeline, and absorption rates all factor into our assessment. A good property in a declining market is still a risky loan.

Borrower Evaluation

We lend to people, not just properties. Our borrower evaluation includes:

  • Net worth and liquidity. Borrowers must demonstrate sufficient net worth to stand behind the project and enough liquidity to cover operating shortfalls without relying on the loan.
  • Track record verification. We call references, review prior project outcomes, and verify that completed projects actually delivered the returns claimed.
  • Credit and legal review. Background checks, litigation searches, and credit pulls are standard. We look for patterns, not isolated events.

Stress Testing the Downside

Every deal we fund goes through a downside scenario analysis:

What if occupancy drops 10%? Does the property still cover debt service? If the answer is no at current leverage, we either reduce the loan amount or pass on the deal.

What if the exit takes six months longer than planned? We structure loans with extension options and interest reserves to accommodate delays, but the economics must still work in a delayed scenario.

What if rates move against the borrower? For variable-rate bridge loans, we model rate increases and ensure the borrower can absorb higher debt service costs during the term.

This stress testing is not theoretical. In our experience, roughly one in five projects experiences some form of execution delay. Underwriting for the realistic case, not the best case, is what protects investor capital when things do not go as planned.

Portfolio-Level Risk Management

Individual deal quality matters, but so does portfolio construction. We manage risk at the portfolio level by:

  • Geographic diversification. No single market represents an outsized concentration of our loan book.
  • Property type mix. We balance our exposure across residential, commercial, and manufactured housing to avoid sector-specific concentration risk.
  • Maturity laddering. Our loans mature on staggered schedules, ensuring we are not exposed to a single refinancing environment for the entire portfolio.

What This Means for Our Investors

Our investors are investing in the judgment behind these decisions. The 15% acceptance rate means we are saying no to deals that other lenders might fund. That selectivity is intentional. It is the reason our investors have received consistent distributions and experienced capital preservation through one of the most volatile rate environments in recent memory.

If you are an accredited investor interested in deploying capital into real estate with a team that prioritizes risk management alongside returns, explore our current investment offerings. We welcome the opportunity to walk you through our process in detail.