Real Estate Acquisitions 101

Identify and source commercial real estate deals by defining geographic market, product type, and deal criteria, then work with brokers to find fully marketed or off market opportunities.

Identify markets with growing demand and strong growth potential, considering population and job growth, travel time, and favorable regulatory and tax climates to maximize value from commercial real estate acquisitions.

Identify your product type by aligning expertise, interest, and long-term beliefs with office, industrial, retail, or multifamily sectors, then decide how hands-on you want to be.

Choose a business plan by evaluating property age and condition, deferred maintenance, capital improvements, and opportunities for renovations, releasing strategies, and operational efficiency to create investor value.

Fully marketed opportunities from major brokerage firms drive a multi-stage offer process that can lead to a bidding war, while off market acquisitions remain the best source for deals.

explore off-market opportunities in commercial real estate, accessed through broker relationships or direct seller outreach, and learn how to target geographic markets and property types for pricing arbitrage.

Identify investment opportunities, collect data, and underwrite deals using an acquisition model. Project five to ten year cash flows to determine offer prices and investor returns.

Cultivate broker and seller relationships to find deals and prove you can close. Pursue off-market opportunities through area farming and prepare for underwriting with data collection.

Collect data from brokers and sellers for real estate acquisitions, review the offering memorandum, rent roll, and historical financials, and assess commercial leases to underwrite and value the deal.

Create a dynamic acquisition model, input historical and future data, and value deals by projecting cash flows to target returns like IRR, equity multiple, and cash-on-cash.

Tour and analyze a property to refine underwriting and valuation, update capital costs and market rents, compare assets, and prepare a competitive offer and contract plan.

Tie up a real estate deal by submitting a non-binding letter of intent, navigating offer rounds and buyer interviews, and advancing to a binding purchase and sale agreement.

Outline the non-binding letter of intent to purchase, detailing purchase price, refundable initial deposit, secondary non-refundable deposit after the contingency period, due diligence deliverables, and closing timeline.

Navigate the offer process for real estate acquisitions, from initial offers through rounds and best and final bids on marketed deals, with buyer interviews assessing experience and financing.

Explore the binding purchase and sale agreement for commercial real estate, detailing firm price, deposits, contingencies, closing, and allocations, with umbrella and single purpose entity assignments guided by an attorney.

Explore the contingency period and due diligence process in commercial real estate, where refundable deposits, third-party testing costs, and reputational risk shape the decision to close.

Explore due diligence in commercial real estate, from property condition assessments and phase one and phase two environmental reports to lease audits, appraisals, market analysis, and underwriting validation.

the property condition assessment report, or PCR, is a document detailing building systems, structure, site improvements, accessibility, with immediate repairs, cost estimates, long-term capital needs for underwriting, and environmental contaminants.

Assess environmental risks with phase one desktop research to identify past site use and hazards. Determine if phase two on-site testing is needed and estimate remediation costs for lender economics.

Identify a property's physical characteristics and restrictions via a survey and zoning report, detailing meets and bounds, square footage, improvements, utilities, easements, and current and future uses.

Identify ancillary reports such as earthquake and flood reports to quantify potential losses and satisfy lender and insurer requirements, shaping the physical due diligence in commercial real estate acquisitions.

Perform lease audits to extract economics from existing leases, including term remaining, renewal options, base rent, operating expense reimbursements, and caps, while aligning tenant understanding and revealing side agreements.

Review estoppels to verify base rent, escalations, end dates, and renewal options, ensuring tenant understanding matches the contract. Assess tie packages, free rent, and expense reimbursements to identify liabilities.

Assess property value using the cost, sales comparable, and income approaches, and interpret market cap rates and discounted cash flow analysis for lender approval.

Update market analysis by reviewing current rental rates, cap rates, and historical trends; incorporate new sales comps and pipeline supply to refine underwriting and finalize valuation.

Finalize underwriting by updating rent roll and market assumptions, revise vacancies, lease expirations, capital budget, closing costs, and exit cap rate, to confirm cash flow accuracy and deal viability.

waiving contingencies ends due diligence by converting deposits to non-refundable and enabling last negotiations to ensure the deal pencils out before entering the 30–60 day closing, securing debt and equity.

Learn how to source the loan to maximize debt in the capital stack using loan packages and mortgage brokers, while assessing asset performance and borrower risk.

Identify and meet lender requirements to protect collateral, including insuring the property, appraisals, zoning and environmental reports, and strict underwriting standards such as DSR, debt yield, LTV and LTC ratio.

Explore how third-party reports, including property appraisals, zoning, and environmental assessments, shape loan size, collateral value, and risk, with focus on construction budgets, historical designations, and probable maximum loss.

Protect tenants and lenders in foreclosure by preserving lease terms and rent payments. Lenders require subordination, non-disturbance, and attornment agreements to safeguard collateral and guide underwriting of operating income, proceeds.

Assess how lenders use debt service coverage ratio, debt yield, loan to value, and loan to cost to determine loan proceeds and equity needs for the acquisition.

Learn how real estate investors raise equity with an investment memo, explore sources from institutions, networks, brokers, and crowdfunding, and understand key returns and risk protections.

Explain the gp-lp relationship in real estate deals, where the general partner raises capital and manages the asset, while limited partners supply equity and the investment memo guides finding them.

Discover how the investment memo helps raise limited partner capital by outlining five-to-ten-year financial forecasts, risk mitigation, deal rationale, market context, fee structures, and minimum investment details.

Differentiate accredited and non-accredited investors under SEC rules 506b and 506c to guide capital raises for commercial real estate. Highlight advertising and verification requirements and their impact on investor eligibility.

Discover how a joint venture operating agreement governs roles, decision making, capital contributions, fees, and waterfall structures to clarify distributions and protect both general and limited partners.

Explore common real estate fees—acquisition, asset management, construction management, and disposition—and learn how equity waterfalls, preferred returns, and promoted interest drive GP and LP profits.

Explore the real estate equity waterfall in the included excel file, and see how blue-input assumptions drive levered cash flow, fees, and the 8% preferred return and promoted interest.

Explore how a property management agreement sets fee structure, leasing fees, termination terms, and reporting requirements to ensure a smooth transition and aligned property operations with your business plan.

Learn how real estate private equity firms form an SPV to hold a property, isolate liability, and structure partnerships with LLCs or LPs and an EIN.

Navigate the funding process to secure equity for closing with signed operating agreements and lender commitments. Close by wiring funds into escrow, form the partnership, and prepare post-closing investor communications.

After closing, update investors with a closing memo, finalize the operating agreement, and set up direct-deposit distributions plus tax information access through an online investor portal (e.g., Juniper Square).

Trace the acquisitions path from analyst to chief investment officer, including deal sourcing. Learn how roles evolve from analyst to associate, then manager, director, vp across markets and product types.

Discover how real estate acquisitions offer high base salaries, big bonuses, and lucrative fees, with deal sourcing, relationship building, and capital-raising as core skills.

Wrap up this course by guiding you to study real estate financial modeling and analysis to underwrite deals, set valuations, and begin deal analysis using LoopNet and Cressy.