Beginners look for deals on LoopNet. They find listings, run the numbers, and discover that the deals don't pencil. They conclude "there are no good deals out there" and give up, or they buy the bad ones and lose money.

The truth is simpler: the good deals exist, but they're not on LoopNet. On-market listings are the worst part of the deal universe — and that's by design. This lesson is about why, and where the actual deals live.

The "iceberg" of CRE deal flow

Picture an iceberg. The 10% above the water is what you can see — public listings on LoopNet, Crexi, broker websites. The 90% below the water is what you can't — pocket listings, off-market deals, owner-direct opportunities, distressed situations.

The above-water deals are the most picked-over. By the time a deal hits LoopNet, it has typically:

Been shown to the seller's existing buyer relationships first
Been pitched to the broker's preferred clients in private
Been offered to local institutional buyers
Failed to sell to any of them

Only THEN does it get publicly listed. The broker is now hoping to find a less-informed buyer who will pay more than the smart money was willing to pay.

This isn't a conspiracy — it's just how the market works. Sellers want to sell quietly when they can (avoids tenant disruption, market noise, reputation issues with a price cut). Brokers want to maintain relationships with their best clients by giving them first look. And buyers who provide reliable execution get rewarded with first call.

The result: by the time a deal is on the public market, the experienced buyers have all said no. You're competing with other beginners for the leftovers.

What makes a deal "good"

Before we map sourcing channels, define the target. A "good deal" usually has at least one of these characteristics:

Mispricing — the seller doesn't fully understand what they have, or has a reason to accept below market
Information asymmetry — you know something about the property, market, or tenant that other buyers don't
Execution complexity — the deal has hair on it (legal, environmental, structural, lease) that scares off most buyers, leaving the field thin
Relationship pricing — you have a relationship with the seller or broker that gives you a price advantage
Forced sale dynamics — the seller has to sell quickly (1031 deadline, divorce, partnership dispute, distress)

You'll notice none of these describe a typical LoopNet listing. LoopNet listings are public, well-marketed, and competitively priced. They're priced for a market with full information — which is the worst environment for a buyer trying to find an edge.

The goal of sourcing is to find deals where one of the five characteristics above applies. That requires going off the public market.

The four sourcing channels

Every serious CRE investor builds deal flow from four channels. The mix depends on the investor's stage and resources, but the channels themselves are universal.

Channel 1: Broker relationships

Commercial brokers control most of the deals — both on-market and off-market. The on-market deals you see on LoopNet are 100% brokered. The pocket listings and "I'm about to bring this to market" deals are also brokered, just not publicly.

Building broker relationships gets you the second category. When a broker is about to list a 24-unit multifamily and they call their five "go-to" buyers first, you want to be on that list of five.

We'll spend the next three lessons on broker relationships specifically because this is the highest-value sourcing channel for most investors.

Channel 2: Direct-to-owner outreach

Going around brokers entirely. You identify a property you want to own, find the owner, and make contact directly.

This works because many CRE owners are NOT actively trying to sell — but they're not actively trying NOT to sell either. They're indifferent. A well-timed, well-priced direct offer can convince them to sell when they otherwise would have held.

This is the dominant sourcing channel for residential investors and is increasingly used by commercial investors. We'll cover the cold-call mechanics and direct-mail playbook in Lesson 5.

Channel 3: Distress and special situations

Bankruptcies, foreclosures, divorce, estate sales, partnership disputes, capital calls gone wrong, loan maturity defaults. Forced sellers usually accept significant discounts to clear the situation quickly.

Sourcing distress requires watching public records (court filings, lis pendens, tax delinquency lists, bankruptcy court), building relationships with workout officers at lenders, and being known as a buyer who can close fast on complicated situations.

Lesson 6 covers distress sourcing.

Channel 4: Public listings (used right)

LoopNet, Crexi, CoStar — the public platforms aren't useless. They're just usually used wrong.

Used right, they're a market intelligence tool: see what's listed, what it's priced at, how long it's been on the market, and how prices change. Use them to understand the market and to spot the rare price reduction or quality listing that slips through.

Used wrong (which is how most beginners use them), they're a way to underwrite a hundred over-priced deals and make zero offers. Lesson 7 covers how to use the public platforms productively.

The sourcing math — why you need multiple channels

Here's the honest math of CRE sourcing:

| Channel | Deals you see per year | % that pencil at all | % you'd actually buy | |---|---|---|---| | LoopNet/Crexi alone | 200-500 | 5-10% | <1% | | Broker pocket listings | 30-80 | 20-30% | 5-10% | | Direct-to-owner outreach | 5-20 (responses) | 30-50% | 15-25% | | Distress / special sit | 5-15 | 30-40% | 10-20% |

If you only use LoopNet, you might look at 400 deals to find 1 worth buying. If you have broker relationships AND direct outreach AND distress channels active, you might look at 60-100 deals to find 3-5 worth buying.

The multi-channel approach isn't just about volume — it's about quality. Each channel produces different KINDS of deals. Distress finds you discounts. Broker pockets find you institutional-quality assets. Direct outreach finds you off-market gems. Public listings find you market intelligence.

The realistic time investment

Sourcing is not a weekend hobby. For a part-time investor doing 1-2 deals a year, expect to spend 4-8 hours a week on sourcing activities. For a full-time investor or broker, sourcing is 50%+ of the work.

Activities that compound:

Calling 5-10 brokers a week to stay top of mind
Walking 2-3 properties a week to maintain market knowledge
Mailing 50-100 owner letters a month
Reviewing all new listings in your target submarkets weekly
Attending 1-2 industry events per month

None of these activities feel like "doing deals." They feel like overhead. But they're the foundation. Without consistent sourcing activity, the deals don't show up.

The investors who make it long-term are the ones who treat sourcing as the actual job and treat closing deals as the byproduct. Beginners reverse this and wonder why deals don't come.

A common mistake: chasing every deal that pops up

When you finally find a deal that pencils, it's tempting to drop everything and chase it. Hours of sourcing, hours of underwriting, hours of negotiation. Then it doesn't close (most don't) and you have to start over.

The discipline is keeping sourcing active even while you're chasing one specific deal. Don't pause your broker calls because you're under contract. Don't stop your direct mail because you're focused on DD. The pipeline has to keep flowing or you'll have months of dead time after the current deal closes (or dies).

Successful investors maintain pipelines of 5-15 deals at varying stages — some in early sourcing, some in underwriting, some in negotiation, some in DD. The portfolio approach keeps the rhythm steady.

Geography matters more than you think

Sourcing is far easier in markets where you have presence and relationships. A part-time investor in Orlando trying to source deals in Atlanta will struggle — the brokers don't know them, the owners don't take their calls, the inspectors aren't in their network.

For most people, the right move is to start sourcing in the market where you live (or one you can drive to in 60 minutes). You build relationships that last, you can walk properties on short notice, and you have local context about which submarkets are growing vs. dying.

In Central Florida, that means starting with Orlando, Tampa, Lakeland, Brevard, Volusia, or Polk County. Pick one or two submarkets and own them. Don't try to source the whole I-4 corridor at once.

The "be findable" principle

Here's a counter-intuitive sourcing rule: the deals find YOU when you're findable.

What makes you findable:

A simple website that says what you buy and how to reach you
A LinkedIn profile that's clearly identified as a CRE investor in your market
Business cards and an email signature you actually hand out
A consistent presence at industry events
Showing up to broker open houses, even on deals you're not buying

Brokers and owners will route deals to you when they remember who you are and what you buy. They won't route deals to people they can't find.

Most beginners hide. They have a generic Gmail address, no website, no LinkedIn presence, and they don't show their face anywhere. Then they wonder why deals don't come to them. Visibility is the multiplier.

What this course will cover

The next 6 lessons drill into each sourcing channel:

Broker relationships (how to actually build them)
The broker call and the broker meeting (what to say)
LoopNet, Crexi, and CoStar (using public platforms productively)
Direct-to-owner outreach (cold calls, letters, scripts)
Distressed and special situations (where the discount lives)
Building your sourcing system (the weekly routine that compounds)

By the end, you should have a concrete plan for generating deal flow in your specific market — not just abstract principles, but a list of names to call, a list of mailings to send, and a weekly cadence that compounds over time.

What to take away

On-market listings are usually the worst deals; the good ones are off-market
Four sourcing channels: brokers, direct-to-owner, distress, and public listings (used right)
A good deal has mispricing, information asymmetry, complexity, relationship pricing, OR forced-sale dynamics
Multi-channel sourcing produces better deals than any single channel alone
Sourcing is the actual job; closing deals is the byproduct
Maintain your pipeline even while chasing a specific deal
Be findable — the deals find you when brokers and owners can locate you
Pick a small geographic footprint and own it

Next lesson: building broker relationships — the highest-value sourcing channel for almost every CRE investor.

Where Deals Actually Come From