A discipline module focused on disqualification, restraint, and early exit.
Listen to this before you open the workbook.
Workbook — Pre-Commitment CheckEvery deal must pass three fundamental truths before it deserves your attention. These are not preferences. They are requirements.
Truth 1: The numbers must work without hope. If you need appreciation, rent increases, or market timing to make the deal pencil, it doesn't pencil. Walk away.
Truth 2: The risk must be containable. If one bad tenant, one delayed permit, or one rate change can break the deal, you're not investing—you're gambling.
Truth 3: You must be able to exit. If there's no clear path to liquidity, you're not buying an asset—you're buying a problem.
Do not proceed if any one truth fails.
Answer every question in writing. Hesitation counts.
Red flags are not warnings to investigate further. They are signals to stop.
The protocol is simple: when you encounter a red flag, you do not proceed until it is resolved. Resolution means one of three things: the issue is eliminated, the issue is priced into the deal, or you walk.
Common red flags include: seller urgency without explanation, missing documentation, inconsistent financials, deferred maintenance beyond cosmetic, zoning ambiguity, and environmental concerns.
If you find yourself explaining away a red flag, you've already lost objectivity. Use the inventory below to track what you've seen—and what you've chosen to ignore.
This section exists for those who think better with numbers. If you find yourself negotiating with the output, stop and return to the Kill Switch.
The Exposure-Weighted Deal Test (EWDT) assigns numeric values to key risk factors: capital at risk, time commitment, market dependency, operational complexity, and exit friction. Each factor is scored 1-5, weighted by your personal risk tolerance, and summed.
A score above your predetermined threshold means no. Not "maybe." Not "let me run it again." No.
Do not begin another deal until you have walked away from at least one.