Confused about Deal Flow

[Matthew Fiebig]

Hello,

I am a new to the area of real estate and one of the biggest problems stopping me from investing is that I do not understand the general flow "the deal". I'm specifically interested in this from the perspective of acquiring apartment buildings in Washington state.


As I understand it, the flow occurs something like this:

Acquire Lead

Letter of Intent
Acquire Finacials (P&Ls)

Negotiate Offer
Under Contract
Due Dilligence (Rent Rolls, Structure, Title, etc)
Escrow
Management Reorg

The part I'm confused about is Due Diligence is likely where the treasure trove of info is going to be, but by the time I reveal that information, I'm already under contract. If I find something unfavorable to the seller how do I get out of the contract and negotiate a better price?

I feel very uncomfortable making an offer without that due dilligence info, but as I understand it, that comes after the contract is executed.