What They Are Not Telling You...

August 21, 2026

And What You Need To Know

Whether you are buying commercial real estate or buying a business you have to be careful. I’m sure some of you’re are thinking “Ok Captain Obvious, tell me something I don’t know.” Well here it is.

When buying real estate, disclosure from the seller and their agents is mandatory. It’s the law. At least it is in my state. If there’s a problem with the property that the seller or their agent is aware of it must be disclosed to a potential buyer. There is even a legal document that gets attached to the sales contract called the Property Disclosure Statement that includes a checklist of the most common problems that could be associated with a property. The seller checks the appropriate boxes and adds in anything else that is known and then signs it. However, go back and read that previous sentence and notice the phrase “that the seller or their agent is aware of.” I’m sure you can see the importance of that phrase.

To cloud the issue even further, some problems are not physical problems that can be readily seen. For example, when someone is selling a commercial property they will provide certain financial information in the initial presentation of the property. Things like the Net Operating Income (NOI), or the Cap Rate, or Occupancy or Vacancy rates. If the real numbers don’t appear to be something that would attract a buyer they will frequently give out “pro forma” numbers instead, especially for the NOI and the Cap Rate. In my opinion a pro forma number is frequently a fantasy number or wishful thinking. It’s what is “possible” but for some reason they have not been able to achieve it themselves. That reason is what they are not telling you. You cannot rely on those numbers to evaluate a deal and make a reasonable offer. They are imaginary. I have also seen brokers use 6 or 7 year old pictures of a property on their online marketing of the listing. You won’t know that until you show up to see the property and realize it looks totally different.

Buying a business has its own set of issues. Are they telling you that 25% of the employees in the company are the owner’s family members who will likely quit soon after the sale takes place? Are they telling you that they just lost their biggest customer so their revenue for the upcoming year will be way off? I know I’m sounding very negative about this but that is not my intention. My purpose is to remind everyone to do the proper due diligence. And in the case of a real estate purchase have a broker/agent who is experienced in the type of property you are buying, represent you in the transaction. They will not charge you a fee unless the seller refuses to pay a commission or the seller’s agent refuses to split the commission. And neither of those is likely to happen.

If you are buying a business have a CPA and an attorney to consult with. Have them check out the financial documents, tax history, and run credit checks on the business including checking for unpaid bills and liens. Possibly even a criminal check on the sellers. You never know. Don’t go into anything blind.

That’s my 2 cents worth for this week. There's a world of opportunity out there. Now, go out there and make a deal!

Thanks to all our readers and welcome to the new subscribers!

​Click Here to read previous articles

That's it for this time. See you next week!

If this newsletter was forwarded to you and you would like to subscribe to receive your own weekly issue delivered to your inbox, Click Here​

​Click here to listen to the Financial Momentum Podcast

Momentum Lifestyle Network, LLC 200 University Blvd #295 Round Rock, TX 78665​
​Unsubscribe · Preferences​