A Due Diligence Strategy That Closes Deals

One of our readers asked me something this week that deserves a full answer: 

“How much repair credit should I ask for during diligence?”

There isn’t a one-size-fits-all formula, but there is a framework.

Most buyers treat due diligence like a courtroom.

They collect the evidence, build the case, and drop the hammer at the last possible second. 

The old-school move is to collect everything, say nothing, then let your attorney do the talking with a hard legal letter dropped at 4:30 pm on Friday before due diligence expires, like a grenade. 

I always hated this type of game. 

It works maybe 10% of the time when the seller caves in. 

The other 90% of the time, you blow up the deal, kill the relationship, or both.

I had to make a mindset shift that changed everything for me…

The moment you sign a purchase agreement, you haven’t bought anything.

You’ve been awarded an opportunity to buy.

That may sound like a small distinction, but it’s not.

That reframe changes how you show up for the next 45-60 days. Instead of going into war mode (collecting intel, hiding your findings, waiting to ambush) you go into partnership mode.

Because if there’s one thing that we know about CRE, it’s that something always comes up.

Every single deal.

Phase 1 findings, roof inspections, wrong lease language, easement or access issues, HVAC reports, or that second layer of roofing that was never supposed to be there (improperly installed, quietly leaking, and the seller has no idea you found it).

Ryan Holiday calls it The Obstacle Is The Way. 

In CRE due diligence, the obstacles are the deal.

Here’s what I do instead…

I get the seller’s cell number, take him to breakfast, and check in throughout the process. As things come up, I share them. Not as ammunition, but as information.

Odds are, the seller already knows about that second roof layer. He just doesn’t know you know. 

When you bring it up calmly and collaboratively, you’re not attacking him. You’re solving a problem together. 

That shift does two things:

1. Problems get smaller when you look at them together. What feels like a disaster in your head is often a known, solvable issue with a clear cost.
2. The seller starts to feel accountable, not defensive. He understands he’s passing these problems to you, and there’s validity in that.

If you want to hear a masterclass on this, listen to my conversation with Jaime Contreras. 

Jaime is one of the best relationship builders I know in this business, and he actually pre-schedules a dinner with the seller after closing. 

Some of his sellers have since become his lenders. 

Worth every minute.

Will you leave a little on the table sometimes? 

Yes. You’ll get emotionally attached, you’ll like the guy or gal, and you’ll eat a repair cost you wouldn’t have touched if it were negotiated the old way through legal channels. 

But balance that against the deals you close that you would have otherwise killed, the sellers who become your lenders, and the reputation you build as someone people want to sell to.

The best deals aren’t the ones where one side comes out a winner and the other is a loser. 

They’re the ones where both sides walked away thinking they left just a little on the table. 

That’s the deal worth doing 🤝

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