Reducing Broken Deal Costs for Self-Funded Searchers?

February 11, 2024

by a searcher in Delaware, EE. UU.

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In self-funded searches, broken deal costs can quickly add up. For those who have faced this challenge, what strategies have worked best for you to reduce these costs? How do you approach due diligence and negotiations to minimize risks without cutting corners? Practical tips on handling these expenses would be greatly appreciated.

Amazing question. My number 1 advice is not to invest in due diligence before you have signed a bidding loi with a penalty clause for seller if they decide not to close (is basically a deferred payment in 90 days). In the Bidding LOI you should write a clause that allow you not to buy. If new pieces of info are discovered in due diligence and the seller intentionally didn't share them before, the penalty will also apply.

Last year I spend around 20k in due diligence in failing deals (fuck haha) and this year i have a full time team ready to deliver so, if you are a self funded searcher and you want our support for free, just join our private community and lets talk (since we are actively investing):

https://www.skool.com/selffunded-room-5168/about

#selffunded #gettingstarted

Reply by a searcher
from University of Notre Dame in Cambridge, MA, USA

Do your own preliminary QoE. Focus on the big rocks first which will kill the deal. One of the most interesting strategies I keep in my quiver I learned from ^redacted‌ . He had the seller front the cost of the QoE and paid for the QoE if the deal closed since the seller had run a lot of personal expenses through the business. He talks about it on Acquiring Minds.

Reply by an intermediary
from Wesleyan University in Needham, MA, USA

Please feel free to DM me about any broken processes since I can provide referral fees for deals via PEmarketplace.

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