Acquisitions Anonymous - #1 for business buying, selling and operating - Why This $2.5M SaaS Deal Could Be a Hidden Gem (or a Trap)

Episode Date: January 30, 2026

In this episode, the hosts dive into a Florida-based SaaS company in the real estate sector that's priced to sell—but bleeding revenue.Business Listing – https://app.acquire.com/startup/26wwAQaY24S5C4txn71j2HdqiKu2/x8eRIpHn7PfpSoYsGPTD?utm_medium=email&_hsenc=p2ANqtz-8LEzB2ryhB4m0MQmOHRKit018nnoNJu6uuI2GFxXea-Y3y7JV2S-lwR5fiogyjJ_EmM-ewVsI_rTWlzqw_GqYUfRwwPw&_hsmi=396428624&utm_content=396428624&utm_source=hs_emailWelcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.💰 Sponsored by:Acquisition Lab – Your fast-track to business ownership. Get hands-on support, world-class resources, and join a top-tier community of acquisition entrepreneurs. Schedule your free consultation at https://www.acquisitionlab.com and mention Acquisitions Anonymous!Capital Pad – A platform connecting accredited investors with vetted small business acquisition deals. Discover exclusive opportunities at https://capitalpad.comThis week, Michael Girdley and Bill D’Alessandro break down a SaaS deal out of Florida that’s serving real estate brokerages with back-office automation and e-sign tools. The business is generating $1.4M in revenue and $617K in profit—but it’s shrinking fast, with a -17% annual growth rate.Key Highlights:- Asking price: $2.5M for $617K in profit (4.1x)- Serving real estate brokerages with e-sign and transaction management tools- -17% YoY revenue decline raises red flags- Customer churn sits at 1–3% monthly- Massive TAM but no clear go-to-market engine in placeSubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Welcome to Acquisitions Anonymous, the internet's number one podcast about buying and selling small businesses. Today, we broke down a deal that is a SaaS business out of Florida in the real estate space. It is value priced, and there's a reason for that that you will find out in the episode. So hope you enjoy it. Bill and I had a great time. Here it is. Well, so at Acquisition Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100% beers anymore. And thumbs downing on just the plus inventory line.

Are you ready to take a leap into business ownership but you don't know where to start? Well, look no further than Acquisition Lab, the premier resource for entrepreneurs seeking to buy their dream business. Founded by Harvard MBA and acquisition expert Walker Dibble, the Lab is your fast-tracked success in the search diligence and acquisition process. With hands-on support, world-class resources, and a community of like-minded entrepreneurs, Acquisition Lab gives you the tools and confidence to navigate every step of the journey. And we're proud to call Walker and Chelsea, the lab's director, longtime friends of the podcast. They're passionate about helping entrepreneurs like you take the next big step. So don't wait to make your business ownership dream or reality. Visit AcquisitionLab.com today to learn more and schedule your free consultation.

And when you do, be sure to tell them the Acquisitions Anonymous podcast sent you. Acquisition Anonymous, it's me, Michael, and my two-year-old son, Andrew. Andrew, what do you think about this deal, buddy? Andrew, do you want to buy the deal or would you pay four times EBITDA or five times EBITDA? What do you think? All right. On that note, he's so many words usually and now he's shy.

On that note, I brought a deal on maybe Andrew was talk about it. All right, Michael's got a deal for the grownups to review. So thanks to Andrew for coming here. Here we go. Yeah.

It reminds me of the, it reminds me of the peak period when people are doing podcasts and getting themselves canceled. And Saturday Night Live, Did that Fisher Price podcast set, Skid? Did you ever see that? No, I hadn't seen the Fisher Price one.

It was so funny. Well, it was like, okay, so, you know, people were going on podcasts. And it was typically like, you know, some guy my age, white guy saying stuff on a podcast, he probably shouldn't, peak cancel time. And so the commercial was that they did a Fisher Price podcast, fake podcast set up so you could like have your own podcast,

but not get yourself in trouble. Like just like a play set for adults? podcast play set. Nice. Yeah. So you should get that for your son. He totally needs it. So I just, you will remember when we started this podcast, you said, Bill, your microphone is terrible and you bought me a new microphone. I'm now like three microphones later as you and I fell down the podcast audio rabbit hole together. But I found the, we moved recently and I found the original microphone. So that is now a kid's toy. So my original Blue Yeti condenser microphone is now a kid's toy. I'm just never going to use again, realistically. The Blue Yeti is shockingly a terrible,

a terrible microphone for its reputation. It's so popular and like everybody has them and it's so bad. Yeah. So anyway, the, you know, I was thinking, you know, baby comes in while we're recording the podcast. Do you remember that viral thing where the guy's on the news and like the kids come in, comes in behind him in his home office? And like the white comes in and is like dragging the kids out and everything.

And we all thought that was like hilarious in, I don't know, 2015 or whenever that happened. If that happened today, nobody would think it was funny. That's just like normal real life. Like that happens on every Zoom call, everyone's on. Do you think it got normalized when Elon started bringing his kids to the White House? That's where it felt like it pivoted. Like before that, I felt like people expected to be more, more professional. I think he was before then.

It was COVID. I mean, it was like when everybody was suddenly worked from home and nobody had ever worked from home before and nobody had a dedicated space or like a, you know, professional setup and like people are in their sweatpants and they're trying to, you know, kids were coming in all the time. That was an insane time. I think that's when it got normalized for me. Yeah. There's some elements of COVID I really miss. A lot of it sucked. But it was it, it was kind of beautiful because you simplified so much out of your life, you know. You weren't expected to do as many things in normal life, and you spend more time with your family and reading books and kind of, you know, it was kind of, that element of it was kind of nice, I think. It's really funny, you know, of course, all the terrible parts of COVID, but this is a proof of the way the human mind, like, time heals all wounds. Like, the human mind just kind of like deletes all of the misery and you can look back on it and go, in some ways it was kind of nice, even though it was objectively horrible in a lot of other ways. It is what it is. Well, let me put you on this deal. It is from our current, maybe former sponsor, Acquire.com. We love those guys, Andrew and his team.

So I ran across this because I think it's pretty interesting. It is a SaaS business located in Florida and is actually a lot bigger than some of the other ones we see. You know, your typical SaaS business on Acquire seems to be like $40,000. You know, and this one's actually pretty big. I love this. I love when you bring a SaaS deal, Michael. It's my favorite ones you bring. Thank you.

Thank you. I'm sassy. Yeah, I love it. So this business in Florida, it is a residential real estate transaction management with ESign compliance commissions and reporting. They are asking $2.5 million, $4.1 times profit, and 1.8 times revenue. The annual growth rate is negative 17%. Uh-oh.

Yeah. I was excited for a minute. Hang on. Wait, what? You had me at what? Trailing 12 months' revenue is 1.4 million, and they profited $617,000. Last month, they did $118,000 and profited $50,000. Okay.

So it is a cloud-based platform that gives residential real estate broker, which is a unified workspace to manage every deal from contract to close. It combines transaction management, e-signature compliance automation, commission accuracy, and clear reporting in one system. Operating for more than a decade with proven profitability replaces piecemeal solutions such as DocuSign, spreadsheets, and manual compliance checklist with a single connected workflow. It powers back office workflows for recognized brands across the U.S., reducing administrative risk in delivering real-time insight into brokerage performance.

Built to support boutique teams and large firms alike, including national and multi-offices brokerages with high transaction volumes. It helps many organizations stay focused and organize, save hours each week and operate with greater consistency of control. Healthy margins and protectable revenue are supported by long-term customer relationships. I'm going to skip kind of the capabilities here, compliance, document tracking, reporting, all that kind of stuff. Why they think it's worth what it's worth. So again, they're asking 4.1 times profit or 1.8 times revenue. they like the long-term customer contracts,

predictable recurring revenue, strong margins, and operational stability for more than a decade. And then there's some other stuff here, charts and stuff that we don't have access to. They have 100 to 250 customers. So that should give us an idea kind of how big the typical contract is. Churn is 1 to 3% downwards.

So they're losing 1 to 3% of their customers per month. founded in 2015, team size is 2 to 20 and it's a B2B model with subscription built on semi-modern tech here, Java, AWS, and then they compete with a bunch of other

firms, brokerage engine, app files, dot loop, brokerment, sky slope. Growth opportunities, hire a sales team and increase digital marketing. Is that just pre-filled in the template every time you saw business? The growth opportunities, hire sales team, increase marketing?

I mean, it's interesting the selling reasoning here is starting a new venture. So it may be the case that the owner of this business was salesperson number one and also the only salesperson and has gotten burnout and that's causing the churn. But yeah, but before we get to that, do we understand what this does? So it makes me understand it when it says it competes with dot loop because my realtor used dot loop when we bought our house. So it's like, you know, when you're buying, well, you got to put in an offer, you got to put together a contract, you got to amend the contract. You've got to track whether you've done all your inspections. You've got to, you know, track whether you've been paid your commission, you know, all this stuff. And it seems like this is for the subscriber, the customer here is the real estate office, the brokerage office. They subscribe. I did the math, Michael. It seems like the average customer is about eight grand a year. I kind of took the median of the number of the customer range. they said, 150 customers divided by 1.2 million of sales. So it's like 8 grand a year meeting customer. And it's going to keep track of all of your agents. It's going to help them run their transactions. It's going to help you as a brokerage distribute all of your

commissions, figure out what cut you take, et cetera, et cetera. Do e-sign. So like obviously huge market, right? Tons like real estate is one of the hugest markets by transaction volume. tons of competition here. I like so much about this. The only thing I don't like about it is that it's declining 17% a year, which seems at odds with what they just said, which is long-term customer contracts and stickiness. What do you make of that?

Well, it's interesting, right? Real estate agents and to some extent brokerages are, you know, it's a huge like power law distribution, right? Like there's tens of thousands, hundreds of thousands of real estate agents in the United States, but the vast majority of deals get done by the top 5% of them. It's also something that people seem to get into and leave a lot in terms of a career. Like I've seen that before where I have a friend who, for example, was a real estate agent and a broker for like 15 years. And next thing I knew, they're like a flight attendant for United Airlines.

Like they're just like, oh, this sucks. I'm going to go. I don't care if I take a. pay cut, I'm going to go do this other thing. So I think there's some of that where there's just a bunch of natural churn in this market and you have to, it acts kind of like a consumer business. You have to be growing it all the time just to stay flat with recurring revenue. Yeah, that, you know, that reminds me of a business I had in the past called Tables Ready and we sold software to individual restaurants. And they were the worst customers. I mean,

they just went out of business all the time. So we would churn, like, you know, our software was not make or breaking their business. What was making and breaking their business was like good food, good location, et cetera. And they were going out of business for business reasons that we could not impact and had no control over. And so we just had this baseline level of churn that was brutal in that business. And you're right, you probably have it in realtors as well. Yeah.

And also interesting, I just pulled up Dot Loop. They're owned by Zillow. Yeah, they got acquired by Zillow a couple years ago. Yeah. They're like the Kleenex of this. They're one of the most popular. Yeah, which is bad, right? Because Zillow, in theory, has a bunch of other ways to make money.

And this is a point solution. So you're competing with somebody who's bundled into a bigger product with this kind of niche thing that may or may not be better than dot loop, right? Right, but Zillow can give Dot Loop away to keep realtors in the Zillow ecosystem if they have to. So that's tough. So what's interesting is I did the math. So they said they've got 1.4, if you go down to kind of their TTM, it seemed like, so they got minus 17% on revenue. But if you multiply their last month times 12, it doesn't look like it's down that much. So I wonder if they have stabilized.

Like I wonder if they churned a big customer or, you know, like some sort of one, like they had a great year last year and now they've kind of renormalized. I would really want to dig in and say, hey, maybe this is flatter than it looks, and it's just down year every year because they lost a big customer. Yeah, that may be a good thing. I mean, I think you're right to be totally scared of a software business that's decreasing 17% year every year. It's tough to pay four times profit for something like that that's shrinking that quick. Well, you know, I was going to say before you told me it was shrinking 17% a year, this is a software business with recurring revenue priced at 4x profit. That's pretty reasonable. I mean, we've seen much more insane asking prices on the show than that. But then you tell me it's shrinking 17%. And I understand it.

What do you make of the churn, Michael? I think they said it's like 1 to 3% a month. So, like, that's 1.3% downwards churn rate. That's between, I'm not doing this right. That's between 12 and 36% a year of churn, right? Is that normal for an app like this? Is that bad? Is that good? So that is an incomplete measure of the health of the business, in my opinion.

The churn rate is fine. You know, as a data point, the stuff you really want to know is, like, what is the gross revenue retention? What is the net revenue retention? What is the logo retention? What is the MPS? Like, those are the big numbers we should be trying to understand, to understand a health of a SaaS business.

And, like, this is just, it's just. not enough information to tell you. I mean, we know we know we should be worried about this because they're shrinking in revenue. So that means their net revenue retention has to be negative. But we don't have enough data here to really know, okay, is that bad? Is it horrible? It's not good. I'll tell you that. But we don't know enough because they haven't given us enough data here. Maybe you get that if you're on the paid plan of acquire, which I'm not. So, Hey everyone, it's Bill, and I want to tell you about maybe the most exciting sponsor we've had in a long time on the pod. It's called CapitalPad. And it is the thing that I wish existed when I started my journey of operating and investing in small businesses. So CapitalPad is a marketplace for acquisition entrepreneurs that is people who want to buy a business and need capital to list their deals and solicit capital from other people who want to invest in acquisitions. acquisition deals. So if you want to back somebody buying a small business, CapitalPad is a place to do it.

And if you want to buy a business and need capital, you can go on CapitalPad to be introduced to investors. So the really great thing, too, from the investor side is that CapitalPad takes care of all of the details that can get hairy with small business acquisitions. They handle standardized terms, standardized governance, standardized distributions all up front in black and white. CapitalPad professionalizes investing in small businesses. And the returns can be really, really good. I'm so stoked that they exist. It's founded by my friend Travis, who is a phenomenal entrepreneur in his own right. So if this sounds like something that is appealing to you, if you want to buy a small business and need capital, or if you want to invest in small

businesses, go check out Capitalpad.com and tell them that Acquisitions Anonymous sent you. Hmm. So at a baseline level, though, that means you need to be growing 3% month over month just to stay flat. Yep. I mean, that seems hard. Yeah. Well, and that's also, I mean, that's also normal, right? That's why, you know, you look at Salesforce, right? And Salesforce competes with HubSpot. And two of their clients, let's say they each have a customer and they merge. Well, they're going to have to pick, do they stay on HubSpot or Salesforce? So there's this natural. churn that happens in software no matter what people got a business all that kind of stuff it's you know as you said for real estate it's probably higher than average the typical real estate agent is going to be churning as a customer but to me this just smells like these guys haven't figured out how to sell their product and get new agents and new brokerages on board um that seems to be that seems to be the fundamental problem and i don't know what the why that is that's the big question is it because the product sucks Is it because the competitors are better?

Like, is it because somebody else is giving it away? Is it because they're just not running any sort of marketing in sales? I just don't know. That would be where my head goes. The product can't be god-awful, right? Because while the churn is 1 to 3% a month, it's not 10% a month. Yeah. Right?

It's not 20%. So the product can't be terrible. So to me, I think you're right on it. They don't have an acquisition engine that is able to outgrow sort of the natural software level of churn. And they're in a huge tam. So what a business like this has to have is a repeatable way

to acquire customers, real estate agents. The nice thing is, it's not like an enterprise sale, I don't think. You probably can get these people to kind of self-close, which means at whatever $8,000 a year,

I mean, it's, well, it's, you know, $500 a month. Maybe they want to talk to somebody, but you should be able to self-close, you know, a software contract, I would think at 500 bucks a month. They need, so that means it's advertising, that means it's SEO, that means it's word of mouth. You know, you're probably not cold calling real estate agents to try to close them.

So they need to come out, figure out a way to do marketing at scale because you're not going to run out of real estate. You know, there's tons of them out there, giant tam. So you need to just always be in the market with your message. So as people kind of walk by your digital metaphorical billboard, they learn about you and convert at a rate that replaces your chart. And they seem to not have that right now. Yeah. I did just Google how big is there, Tam. There are 360,000 real estate brokerage firms operating in the United States.

That's older than this. And that's to your point earlier, Michael, what fraction of those go out of business and start up every year? Right. who know, but a non- insignificant portion, right? So there's always new people coming in this market who are always going to need this software. Yeah. I mean, this just feels like huge TAM

and you've got to just dial in your, there's some sort of marketing channel that can work for a business like this. And my guess is they used it at some point and the founder has gotten tired and is ready to do something else. It says they're not retiring. It says they're going to a new venture.

To me, it's just like, oh, this would be a great business if somebody could just figure out how to like actually build a repeatable, scalable sales engine. Because in theory, people want this thing, right, from the software perspective. So this has always been like one of my pipe dreams about business acquisition because you can do all the diligence in the world on this business. But this deal ultimately hinges on your ability to get the acquisition engine going, right? And there is literally no way to like test that out. I mean, how cool would it be if you could get this business under LOI and go, I'm going to spend $10,000 to drive you leads and see if they convert at a CPA that makes sense? And if you could see that work, then you would have so much more confidence in buying this

business. But nobody ever does that. They come out of pocket for $2.5 million and they go, okay, let's see if it works. Let's see if our core thesis on growing this business works. And I would just love to see some model, you kind of take root where you could test your growth hypothesis during a diligence period. And if it doesn't work to walk and, hey, if it didn't work,

you know, it didn't really hurt the business. Like, oh, I sent you some extra revenue. You know, I'm not really that damaged if I'm a target, you know. So I would just love to see that happen more often, but it doesn't. Do you think you could, go to this seller and let's say you're an ambitious person, understands digital marketing and sales funnels, go to the seller and say,

hey, like, I will set up for you at costs a go-to-market engine, kind of like an agency, you know, an agency would do. And we'll run it for six months and see if I can build you, we can start to grow this thing again faster than your turn is happening.

And if I hit certain metrics, you agree to sell me the business at YPrice a year from, now. Like is that, do you think sellers would buy into that? I just, I mean, in theory, right? Sure. But I just see like, you grow this guy's business 50% and he's like, yeah, I'm not selling it to you. I mean, like, how do you enforce that contract? You know, like, you're going to have to peel a now performing business out of his hands. I don't think you can write a contract strong enough, you know, to actually make that happen. That's what I would worry about, that you'd do all the work. And he'd be like, yeah, I changed my mind.

Right? I mean, thanks for doubling my EV. Yeah, thanks. I'm not selling it to you for half of what it's worth. Yeah. You know, I just,

I think most sellers would probably be like, yeah, no. So I just don't think you can go that hard with it. But I think you could come in and go like, I'm going to run some AdWords campaigns, and I'm going to see if it works, and I'm going to measure the cack,

and I'm going to see if we sign these guys up. And if I can sign these guys up at a hack that makes sense, I can assume the Tam is pretty bottomless here. And now I feel much more confident buying the business because I can keep running these AdWords campaigns or whatever. But if I can't, if I can't, you know, my one, two, and three feces for how to grow this thing, don't work even on the first dollar, which should be your most efficient dollar. That should give you a real pause on buying the business. Yeah. I mean, that's an interesting thing to do during diligence, like go, go run some Edwards campaigns and test out some of these marketing.

things to landing pages. Funnily, I think that you talk about it, you could probably even at your own cost just start running campaigns for this guy and just see what the click-through rate is, see what the leads are. That's what I was thinking.

You don't need him to pay for the ads. I mean, you're about spending $2.5 million on a business. You're going to drop 30 grand of quality of earnings. You can't drop $10,000 on an ad campaign and see if it works. Yeah. Because if it doesn't work, you are screwed.

Like, same way. Like, if the quality of earnings comes back and the numbers are fake, you're screwed. So you're paying 30 grand to, you know, avoid being screwed, buying a business that you don't want to buy. But people aren't willing to spend 10 grand in ad campaigns to figure out, oh, crap, I'm buying a business they don't want to buy. Because I can't grow it. But nobody ever does that. It's interesting, you know, I was looking at, you know, our friend Jesse Poogee, who's been on the podcast a few times. Oh, how about, Jesse.

he insubated. Sorry. He makes me so happy and want to run through walls every time I talk to Jesse. He's so great. Yeah, I mean, one thing, you know, people are doing a lot of quality of earnings and things when they're buying businesses now, which I think is totally good insurance to do. It feels like there's also opportunities for like the equivalent of that kind of diligence for business buyers to happen in sales or marketing and stuff like that.

And I think one of Jesse's companies is a consulting company that, like, works with, private equity firms to go in and do a marketing assessment for businesses they're going to buy. And I think it's just, it feels like that's a trend where quality of earnings for finance is a thing now, but I think we're going to see more of it for other aspects of the business. Technology,

you know, ops, all that kind of stuff as well. Well, I think so much of it, diligence historically, diligence has been about reducing risk of fraud, right? Like, or uncovering huge baskets of risk or liability. Like, oh, crap, they're, IT is a mess or oh crap their insurance is wrong or oh crap their books are a mess or you know

accounting's not right whatever but diligence is not historically focused on proving the thesis you know pre-close uh and so jesse's company is called ox insights um and he's hired like some i think some ex mackenzie people and i've seen some of their reports it is they're thorough like they're good i mean they're also you know huge like expensive they're five six figure reports It's like it's a commitment. But I would love to, I'm just surprised people don't do more, validate the thesis during diligence. It's all around removing risk. But if you remove all the risk of the world and you're just wrong about the thesis, you are still up creek.

Because now you own an illiquid asset that you have to run and that is not growing and is hard to resell because the growth thesis isn't working. Yeah. All right. So back to the deal. This is just tough to swallow losing 20% a month, 20% a year. That's what I think where I am at. Unless you lost one big customer last year.

That's the only thing that would make it okay. If it's 4.1 times profit and you feel pretty confident through price increases and sales, you're going to keep it flat or get it growing, that's a screaming deal. But with this kind of churn, it's bad. And the big question is, how do we fix that? How do we stop the knife from falling here?

Well, I just think something's going on, right? Because their baseline churn per month is they said between 1 and 3%, which is not far off from minus 17% a year. So either they are bringing in no new customers, which yes, is a huge problem, or something super normal happened. I would hope it's the latter, in which case you could maybe get comfortable with this business. It totally is. Totally is. All right. Well, cool.

Good thought by me finding this one. Good job by you finding this one. I like it. Love it. You know, we haven't done SaaS in a while, but if people go to our website, ACQU andon.com, there is a ton of SaaS in the back catalog. I feel like we're really good at doing SaaS the first one or 200 episodes. We haven't done as much recently. So we should do more SaaS.

It's a great business model, and people are very curious about it. Plus, we get really sassy when we talk about them. Yes, Michael, you were very sassy. It's very great. All right. Well, thanks for being with us today on Acquisitions Anonymous. Happy New Year to everybody, and we will see you on the next show.