Building a pipeline

Sourcing is a numbers game

Most searchers underestimate the funnel. Screening dozens of listings for every one that clears even a basic price, sector, and geography filter is normal, and making an LOI on only a handful of those is too. Buyers who close a deal in a reasonable timeframe treat sourcing as a volume exercise from day one. Buyers who search for years without traction are usually waiting to stumble onto "the right one" instead.

The volume isn't the point on its own. Running enough listings through the same screen teaches you what "underpriced for the sector" actually looks like, what a red flag buried in a teaser sounds like, and which brokers' listings are worth a second look, faster than waiting for the market to teach you the slow way.

A searcher who's screened 200 listings over six months has a feel for pricing in their sector that a searcher on their tenth listing doesn't have yet, no matter how sharp they are. That pattern recognition is the actual product of running a pipeline, not a side effect of it.

Set hard screening criteria before you start

Before you open a single listing, write down your non-negotiables: price and down-payment range, target SDE, sectors you'll consider (and ones you've ruled out), geography or willingness to relocate, and whether you're financing via SBA, which has its own eligibility constraints (see the SBA 7(a) basics guide).

The point of doing this upfront is speed. Clear criteria let you screen most listings out from the teaser alone in under a minute, instead of reading a full CIM before realizing it was never in your range. Buyers without written criteria tend to drift toward whatever's newest or most polished, not what actually fits their capital and goals.

Revisit the criteria periodically, but don't loosen them mid-search just because the pipeline feels thin. A thin pipeline usually means you're not covering enough sourcing channels, not that your bar is too high. Widen where you're looking, brokers, marketplaces, direct outreach, before you widen what you'll accept.

Track systematically: a pipeline beats a stack of bookmarked tabs

Every listing you seriously look at should go somewhere trackable: status (screening, contacted, CIM requested, passed), the reason you passed if you did, and any notes from a broker call. A spreadsheet works early on; a dedicated pipeline tool works better once volume picks up, since it keeps older listings from silently falling off your radar.

The habit that matters most is recording why you passed on a listing, not just that you did. If several deals get rejected for the same red flag, that pattern is real signal about what your criteria should actually be, and it stops you from re-evaluating the same category of deal over and over without learning anything.

How this feeds into evaluating a deal

A well-run pipeline exists to produce a short list of listings worth the real work of evaluation: reading seller financials critically, sanity-checking financing, and eventually making an offer (see the seller financials guide). The tighter your screening criteria and the more systematic your tracking, the less time you waste evaluating deals that were never going to work, and the more attention goes to the few that might.

A pipeline of 40 tracked listings that's been screened hard usually produces two or three worth real diligence time. A pipeline of 40 loosely tracked tabs usually produces none, because nothing ever gets crossed off the list for a real reason.