Key Takeaways
- The fabricated rent roll case lost $1.2M—prevented by physical occupancy verification and bank statement reconciliation.
- The hidden foundation case cost $330,000—prevented by engaging a structural engineer for buildings over 30 years old.
- The zoning case eliminated $24,000/year in planned revenue—prevented by obtaining a zoning verification letter.
- Every DD failure can be traced to a specific skipped step or unchecked assumption in the DD process.
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Test Your Knowledge
1.What is the primary lesson from DD failure case studies?
2.In a financial DD failure case, what discovery typically has the largest impact on deal economics?
3.What is the correct response when DD reveals a material issue close to the DD deadline?