Two months in. The Bay Area is kicking my ass a little. Here's what I've learned.

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by a searcher from University of Pennsylvania - The Wharton School
in Sunnyvale, CA, USA

2h ago

Two months in. The Bay Area is kicking my ass a little. Here's what I've learned.

I debated posting this but figured if I'm going to be part of this community I should actually contribute something real and not just lurk and collect wisdom. So here goes. ? I've been searching for just over two months. Preschools, Spas, home services. Mostly the Bay Area. I came in thinking I had a decent process. And maybe I do. But the market has been faster and more expensive than I expected. *The market is brutal for quality deals* Almost every deal I've gotten excited about has ended up in multiple offers. Every single one. If a business has clean financials and doesn't require the owner to be there 80 hours a week holding it together — there are buyers on it. Nothing good sits around waiting for you. *The deal that I lost yesterday* Asking ~$1.3M. I went through the financials, convinced myself the SDE was lower than represented (which i am pretty sure it is), adjusted my offer down, and lost by $100K with no counter. The broker had a clean process, and wasn't doing multiple rounds. That was it. Honestly — I would have paid the extra $100K. I liked the business. I was so in my head about not overpaying that I lost sight of the competition. The smarter play was probably to offer closer to ask and protect myself through diligence contingencies rather than cutting the number upfront. I know that now. *The stuff that caught me completely off guard* --- Some brokers aren't taking LOIs anymore — they want a full purchase agreement from day one --- Some are expecting 3-5% wired within 3 days of signing. Three days. My stomach dropped the first time I saw that --- Those listings sitting active for the last couple months? Brokers are sometimes intentionally keeping them open to build a buyer pool before setting a deadline and running a structured offer process. Looks passive. Very much not. So my actual question to this community: --- Is off-market the only real answer here? Is that just where everyone eventually lands? --- And has anyone used SMB Deal Hunters for sourcing? Worth it or noise? Would love to hear from people who've cracked this — or even just someone else who's in the weeds and wants to commiserate. 👇

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reply by a searcher 2h ago
from The University of Chicago in San Francisco, CA, USA

Fellow Bay Area person here. Agree with your take as well. Following this because I am also considering off market options but would be interested to see what’s the best path forward here on that

reply by a professional-advisory 1h ago
from University of Pennsylvania in Dallas, TX, USA

I think off market deals is the only way to go. That is why at redacted we only partner with seasoned executives who know an industry and have the contact to get in front of perspective buyers. My two primary acquisitions were both off market deals. I knew the industry I was in very well.