Everyone is asking where you found the deal. I am asking who you bought it from.
Sophisticated investors spend enormous energy on sourcing channels. Was the deal openly marketed? Was it pocket listed? Was it truly off market? Did we cold call and secure the deal ourselves without a broker?
A seller's motivation determines whether there is a gap you can fill. And whether you can fill it better than anyone else in the room.
Here is what we look at before we look at anything else:
1. Why is this person selling now?
Estate planning, a partnership dispute, a fund approaching its return window, a regional operator exiting a market they never fully understood. Each one creates a different kind of opportunity. The best deals we have done came from sellers who could not execute the business plan we saw in the asset.
2. What could they not do that we can?
Sometimes it is capital. Sometimes it is market knowledge. Sometimes it is tenant relationships. Sometimes it is just willingness to hold through the complexity. If the answer is nothing, if we are just another buyer writing the same check, we should ask why we expect to win, let alone outperform.
3. Are we the best buyer for this specific seller?
Not the highest bidder. The best buyer. Those are different things. A family selling a generational asset cares about who they are selling to. A fund manager with a reporting deadline cares about certainty of close. An estate sale cares about process. The best buyers understand the seller's world, not just the asset.
Off-market is an advantage when it means you found it first. A better advantage is being the buyer a seller wants to find.
We pass on plenty of deals where we cannot answer question two. If we cannot articulate how we add value where the seller could not, we are not the right buyer. We are just bidding.
What is the seller situation that has created the best deal you have ever done?
Stop Asking Where the Deal Came From. Ask Who You Bought It From
