In this episode of the Ironclad Underwriting Podcast, Jason Williams and Frank Patalano break down the real reasons commercial real estate deals fall apart during due diligence. From inflated NOI numbers and hidden CapEx to fake occupancy reports and underwriting mistakes, they share real world stories about the risks investors face when the numbers do not match reality. The conversation dives into lease audits, inspections, insurance surprises, lender requirements, and why walking away from a bad deal can sometimes save millions.

Topics Covered

• Commercial real estate due diligence mistakes
• How sellers manipulate NOI and occupancy numbers
• The difference between underwriting assumptions and reality
• Why CapEx and deferred maintenance matter
• Lease audits and hidden occupancy issues
• Risk capital and losing money during due diligence
• How insurance and taxes can destroy projections
• Walking properties during the day versus at night
• Physical occupancy versus economic occupancy
• When investors should retrade or walk away from a deal
• The sunk cost fallacy in commercial real estate
• Why accurate underwriting depends on accurate data

Quotes

• “If you put garbage into your underwriting model, you’re going to get garbage out.”
• “You don’t lose money on the deal you walk away from. You lose money on the deal you force to work.”

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🎧 Connect with Frank:

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